Wal-Mart to settle wage suits
The giant retailer settles 63 class action suits alleging it shortchanged workers on their break time. Total cost: between $352 million and $640 million.
NEW YORK (Fortune) -- Wal-Mart agreed Tuesday to pay hundreds of millions of dollars to settle allegations that the company didn't pay workers for overtime or let them take breaks.
Wal-Mart (WMT, Fortune 500), based in Bentonville, Ark., said it will pay plaintiffs in class actions and their lawyers between $352 million and $640 million. The move will settle 63 suits that were filed against the company in various state and federal courts over the past eight years.
The total amount to be paid will depend on the amount of claims that are submitted by class members, Wal-Mart said. As part of the settlement, Wal-Mart agreed to "use various electronic systems and other measures designed to maintain compliance with its wage and hour policies and applicable law."
The company said the cost of the settlement will reduce fourth-quarter profits by $250 million, or 6 cents a share.
The settlements are subject to court approval, but lawyers for the workers said they believed the agreement was fair.
"After many years of hard fought litigation, the parties have reached an agreement that values the work of Wal-Mart's employees by providing both economic and injunctive relief," said Carolyn Burton of the Mills Law Firm, co-lead counsel in a group of 35 cases consolidated in Nevada and cases covering four other states, in a press release issued by Wal-Mart.
The company said in the press release, which was issued after the market closed Tuesday, that the claims made in the suits "are not representative of the company we are today."
Wal-Mart shares rose 33 cents in late trading to $55.63.
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