SAN FRANCISCO (CN) – A federal judge said Tuesday she is unlikely to add $86 million to a $54 million jury award for Wal-Mart truck drivers because the retail giant showed "good faith" in trying to follow labor laws.
In November, a seven-member jury found Wal-Mart intentionally failed to pay hundreds of California drivers for time spent inspecting and washing trucks and for layovers and mandatory rest breaks from October 2005 to October 2015.
The truckers filed a motion last month seeking an extra $86 million – $25.6 million in penalties, $54.6 million in liquidated damages, and $5.8 million in restitution – on top of the $54 million jury award.
During a hearing Tuesday, U.S. District Judge Susan Illston said she was inclined to grant the request for $5.8 million in restitution but not the other $80 million in damages and penalties.
Class attorneys appeared dumbfounded by Illston's reliance on a post-trial declaration by a Wal-Mart human resources director touting the company's efforts to comply with labor laws and to offer competitive pay to drivers.
Finding that Wal-Mart acted in "good faith" is a conclusion directly contradicted by the jury's unanimous verdict that the company intentionally violated minimum wage laws, class attorney Nicholas "Butch" Wagner argued.
Wagner said considering a corporate Wal-Mart manager's post-trial declaration would violate his clients' rights because that evidence was not presented at trial and not subject to cross-examination.
But Wal-Mart attorney Scott Edelman said it was unreasonable to argue Wal-Mart should have presented evidence at trial on the law and his client's understanding of it, given that matters of law are to be resolved by a judge, not a jury.
Illston also pointed out that Wal-Mart did present witnesses at trial who testified about the company's "good faith" efforts to adequately compensate drivers.
"You did have witnesses very supportive of how Wal-Mart was paying their truckers – that it was very generous and toward the top of the industry," Illston said.
The judge also concluded California labor laws do not authorize giving employees penalties paid for wage violations. She rebuked a class attorney for adding an extra word to a California statute cited in his brief.
"The only way I can see you win the argument is if I rewrite the statute as you did," Illston told the attorney.
The law states any employer who pays a person less than minimum wage "shall be subject to a civil penalty, restitution of wages, liquidated damages payable to the employee, and any applicable penalties."
Illston said class attorney Lawrence Artenian added an "and" before "liquidated damages" in his brief, implying that civil penalties, restitution and liquidated damages were all payable to the employee.
Artenian called the mistake inadvertent and said he would never intentionally try to mislead the court. He argued the California Legislature specifically wrote that language to make sure employers who intentionally stiff workers on minimum wage would be liable for such penalties.
But Illston disagreed with Arentian's interpretation of the statute.
"In my view, civil penalties are not modified as payable to the employee," she said.
Illston ended the hearing after an hour of debate, seemingly unmoved by attempts to dissuade her from her tentative ruling against awarding the extra $80 million in damages and penalties.
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