Wal-Mart to Pay $640 Million in Back Wages to Settle 63 Lawsuits

After years of being embarrassed by lawsuits over its wage practices, the company agreed to settle 63 cases pending in federal and state courts in 42 states.

The workers and their lawyers will receive at least $352 million, and the payments could reach $640 million, depending on how many claims affected workers submit.

Union critics of Wal-Mart, the world’s largest retailer, saw the settlement as proof of their view that the company achieves its low prices in part by cheating workers. But the company rejected that characterization, saying it had already corrected wage practices that it has long attributed to local managers acting without authority.

“Many of these lawsuits were filed years ago, and the allegations are not representative of the company we are today,” Tom Mars, general counsel and executive vice president at Wal-Mart Stores, said.

A state judge in Minnesota has ruled that Wal-Mart Stores violated state laws on rest breaks and other wage matters more than two million times and as a result could face more than $2 billion in fines. The judge has threatened to impose a $1,000 penalty for each violation.

The judge also ruled on Monday that Wal-Mart owed $6.5 million to 56,000 current and former employees because of contractual violations, including a failure to give workers promised rest breaks at least 1.5 million times. The judge also found that Wal-Mart managers in Minnesota had systematically broken the law by having employees take in-house training while off the clock.

"It's been a long time coming," said William Sieben, a lawyer for the plaintiffs, who filed the lawsuit nearly seven years ago. "It's only through a decision like this that Wal-Mart can be held to its contractual agreements and to complying with Minnesota law."