Judge rejects $80M penalty in Wal-Mart drivers suit

Associated Press

San Francisco — A federal judge on Wednesday refused to force Wal-Mart to pay $80 million in penalties in a lawsuit alleging the retail giant failed to pay hundreds of truck drivers in California the minimum wage for certain tasks.

Wal-Mart acted in good faith when paying the drivers and reasonably believed its payment policy aligned with California law, according to U.S. District Judge Susan Illston in San Francisco.

A jury awarded the workers more than $54 million in back wages in November after finding that Wal-Mart didn’t pay the drivers the state’s base wage for inspecting their vehicles before and after trips and for taking 10-hour layovers and 10-minute rest breaks.

Attorneys for the drivers had asked Illston to award an additional $80 million in penalties and damages. An email to their lawyer was not immediately returned Wednesday.

Arkansas-based Wal-Mart Stores Inc. said its drivers earn among the highest salaries in the field and that the plaintiffs were “overreaching.” The company has said its drivers earn from about $80,000 to more than $100,000 a year.

Illston largely agreed with Wal-Mart, citing testimony that she said showed Wal-Mart’s compensation was among the highest in the trucking industry.

Attorneys for Wal-Mart also had said in a court filing that “reasonable minds could differ” about the legality of its pay and layover policies.

The judge said Wal-Mart’s payment policy developed in an “uncertain” legal landscape, giving the company reasonable grounds to believe it was complying with California minimum wage law.

Wal-Mart drivers are not paid by the hour. Wages are based on mileage and specified activities.

The company argued during trial that it paid drivers for activities that included smaller tasks and could not have a separate payment designation for everything they did, some of which took just minutes.

Wal-Mart pays drivers $42 for 10-hour overnight layovers as an extra benefit, but it does not control their time during that period, Scott Edelman, an attorney for the company, said during trial. Drivers are free to go to the movies, exercise or do other activities, he said.