In a decision sure to create additional litigation troubles for New Jersey employers, the New Jersey Supreme Court has ruled that Wal-Mart must defend itself against a huge class-action lawsuit involving so-called off-the-clock pay violations. Almost 80,000 former and current Wal-Mart employees make up the class.
The decision parallels a similar one in Pennsylvania, which ended in a $78 million jury verdict. The same could be in store for not only Wal-Mart, but any New Jersey employer that faces off-the-clock wage lawsuits.
The case: Michelle Iliadis and other Wal-Mart employees claimed they were not paid for rest and meal breaks and therefore were forced to work off-the-clock. Company policy states employees are entitled to paid rest periods according to the number of hours worked during a scheduled shift, plus an unpaid meal break of 30 minutes for every shift longer than six hours.
Wal-Mart wanted to force the employees to file individual complaints or lawsuits, but the New Jersey Supreme Court said class actions were designed for just these types of cases. The court wrote, “[W]e permit a class of hourly, retail employees to unite and—on an equal footing with their adversary—to seek relief for their ‘small claims.’” (Iliadis, et al., v. Wal-Mart, A-69, Supreme Court of New Jersey, 2007)
Final note: The implications from this case are huge — lawyers will be looking for similar cases throughout the state. Now is a good time to review whether your wage-and-hour practices can withstand close scrutiny.