- The Pennsylvania Supreme Court affirms decision to uphold $187 million judgment in favor of employees who were allegedly forced to work off the clock and skip breaks.
- February 19, 2015
- Law Firm: Marshall Dennehey Warner Coleman Goggin P.C. - Philadelphia Office
The Pennsylvania Supreme Court affirmed a decision upholding a jury verdict and award in favor of a class of Wal-Mart employees who were allegedly forced to work through their break periods in violation of the company's policy. Specifically, the class of plaintiffs alleged, inter alia, that the company violated the Pennsylvania Wage Payment and Collection Law because it failed to compensate them for rest breaks and off-the-clock work as mandated in its policies. Specifically, the policies required it to pay "for non-working time on rest breaks," and that "[i]t is against Wal-Mart policy for any Associate to perform work without being paid." Following a 32-day jury trial, the jury found in favor of the class of employees and judgment was entered in their favor.
On appeal to the Superior Court, the employer argued, among other things, that the "rest periods are not 'wages, wage supplements, or fringe benefits’” within the meaning of the Pennsylvania Wage Payment and Collection Law. In upholding the judgment, the court initially noted that it was undisputed that the policies were disseminated to employees and that employees received handbooks at orientation which contained the promise of certain benefits, including benefits relating to rest breaks. As a result and based upon the plaintiffs' testimony that they relied on the representations contained in the handbook to continue working, the court noted that the provisions concerning getting paid for rest breaks could constitute a "unilateral contract" that the employees accepted by continuing to work there.
After being unsuccessful in the Superior Court, the employer argued to the Pennsylvania Supreme Court that they were subjected to a "trial by formula" (which had previously been rejected by the United States Supreme Court) and that the plaintiffs' evidence was insufficient to warrant class certification altogether - in that there was no evidence that the representative plaintiffs' claims were common to the prospective class members as a whole. The Pennsylvania Supreme Court, however, rejected these argument and found that there was ample evidence that the employer failed to compensate employees in accordance with its own written policies and that the method of computing the damages (assessed through a computation of the average rate of an employee's pay multiplied by the number of hours for which pay should been received but was not) was proper and appropriate.
This opinion makes clear that employers (particularly employers with multiple locations) must immediately review their policies (handbook or otherwise) regarding breaks and modify them in order to avoid the "contractual liability" claims that Wal-Mart faced in Braun. Indeed, the fact that plaintiff's counsel was able to obtain a verdict (affirmed twice on appeal) of close to $200 million through what Justice Saylor characterized as "gross generalizations and assumptions" should serve as ample warning to employers of future claims on these issues if they do not take a hard look at their employment policies and procedures.