Yesterday, a jury in Oakland, California awarded 116,000 current and former Wal-Mart employees a total of $172 million dollars in compensation for not receiving their statutory meal breaks.
The jury found that Wal-Mart knowingly violated a provision of the California Labor Code which requires employers to provide workers who work a 6+ hour shift with a 30 minute unpaid lunch break. Violation of this rule by employers requires the employer to pay the employee one extra hour of pay. If this extra hour pay is not provided upon violation of the statute, further damages are possible.
While I think the jury's decision will undoubtedly send a message to corporations operating in California--that they will have to pay the price if they don't provide adequate breaks--I think the real winners here are the plaintiff classes' attorneys. When you break down the reward, the average class member (worker) will receive about $1500. The article stated that Wal-Mart
might be required to pay the plaintiff's legal fees. If the attorneys in this case charged the typical 1/3 plus costs, this means that Wal-Mart
might be on the hook for an additional $60 million plus expenses (probably about another $5 million at least). So, if Wal-Mart is not required to pay the plaintiff's legal fees, the workers' rewards will be reduced and they will receive less than $1000 each, on average.
But how much will the attorneys receive? The LA Times was unclear about how many attorneys worked on this case, but let's assume their were 10. Each of these guys will make about $6 million from this case, enough to allow them to retire. Even if 20 attorneys worked on this case (extremely unlikely), they'll receive $3 million each. Is it right for attorneys to basically "hit the jackpot" because 116,000 workers were being abused by their employer? And while the lawyers count their fees--and that should take them a LONG time--most of the workers will probably have already committed their whopping $1000 to the necessary costs of living.
Some will argue that the workers would have received NOTHING and that Wal-Mart would continue to abuse its workers and violate the law if it wasn't for the plaintiff's lawyers in this case. Surely, however, a more equitable distribution of the damages in class action lawsuits is possible. Any ideas on how to reform this system?