June 4, 2007: The New Jersey Supreme Court May 31 authorized two former employees of Wal-Mart Stores Inc to proceed with a statewide class action on behalf of approximately 72,000 workers alleging that they were denied required rest and meal breaks and were forced to work "off the clock" (Iliadis v. Wal-Mart Stores Inc., N.J., No. A-69, 5/31/07).
Reversing the trial court's denial of the two plaintiffs' motion to certify a class action, the supreme court held 5-1 that "common questions of law and fact predominate over individualized questions and that the class-action device is superior to other available methods of adjudicating this dispute."
Wal-Mart did not dispute the trial court's findings that the workers met the four basic requirements--numerosity, commonality, typicality, and adequacy of representation--for bringing a class action.
"By allowing this manageable litigation to proceed, we permit a class of hourly, retail employees to unite and--on an equal footing with their adversary--to seek relief for their 'small claims' that arise from [Wal-Mart's] alleged violation of contractual promises, statutory enactments, and regulatory mandates," Chief Justice James R. Zazzali wrote for the supreme court.
Justices Jaynee LaVecchia, Barry T. Albin, John E. Wallace, and Helen E. Hoens joined in the opinion.
Dissenting, Justice Roberto A. Rivera-Soto asserted that his colleagues failed to identify any basis for finding that the trial court abused its discretion in denying class certification. "What the majority does do--and movingly so--is emote why, if it were a court of first instance, a case could be made for class action certification under the facts presented," Rivera-Soto said.
He also pointed out that at least seven courts have denied class certification in similar lawsuits against Wal-Mart based on findings of a lack of predominance of common questions over individual issues.
Wal-Mart Operates 54 Facilities in New Jersey
According to the opinion, the company operates 44 Wal-Mart stores, one Wal-Mart supercenter, and nine Sam's Clubs in New Jersey. There are 85 job classifications for hourly employees working in Wal-Mart facilities and 100 classifications for Sam's Club jobs.
A corporatewide policy states that employees who work a shift that lasts between three and six hours are entitled to one uninterrupted 15-minute paid rest break and that employees who work a shift exceeding six hours are entitled to two rest breaks. The immediate supervisor is responsible for scheduling the rest breaks. Employees who work at least six hours also are entitled to a 30-minute unpaid meal break. If a break is interrupted by work, the worker is entitled to a substitute break in addition to compensation for the time worked. The policy states that both supervisors and hourly employees are subject to discipline for failure to comply.
The associate handbook directs employees to always clock in before beginning work and states that working off the clock is against company policy and against the law. However, the company has a procedure for employees who worked off the clock to submit documentation to correct payroll records. The handbook includes a disclaimer stating that it "is not a contract."
The two plaintiffs allege that Wal-Mart, in order to reduce costs and increase profits, systematically violates and ignores the written policies as well as the New Jersey Wage and Hour Law. The complaint alleges that store managers have an incentive to violate the policies because they receive financial incentives for increasing store profits and that intentional understaffing creates pressure to work off the clock.
The complaint includes claims for breach of an implied-in-fact contract, breach of a unilateral contract, breach of the covenant of good faith and fair dealing, violation of the state wage-and-hour law and state regulations, restitution, and unjust enrichment. The plaintiffs proposed a class consisting of all current and former hourly workers who worked in the state during the period from May 30, 1996, to the date the complaint was filed.
The plaintiffs' expert witnesses found a statistically significant deficiency in the quantity and duration of earned breaks. One expert also found that when an employee failed to punch out at the end of a shift, the employee often was credited with working only a one-minute-long shift. Another expert found evidence that employees were clocked out but logged on to cash registers or training devices, indicating off-the-clock work. Wal-Mart's expert faulted the findings, assumptions, and methodologies used by the plaintiffs' experts and concluded that their findings are "vague and unsubstantiated."
A July 2000 internal, nationwide audit found more than 76,000 examples of noncompliance with company policy and state law regarding rest and meal breaks. Wal-Mart then changed its policy in February 2001 to no longer require workers to clock out for rest breaks.
The Superior Court denied the plaintiffs' motion for class certification, finding that common questions did not predominate over individual issues and that filing individual claims with the Wage Collection Division of the state Labor Department would be a superior method for resolving their claims. The Appellate Division affirmed (904 A.2d 736 (2006) ).
Class Action Rule Should Be Liberally Construed
New Jersey courts have held that their rule (Rule 4:32-1) governing class actions, which was modeled on the federal courts' rule, should be liberally construed, Zazzali said.
Wal-Mart did not challenge the trial court's finding that the two plaintiffs satisfied the requirements of Rule 4:32-1(a) by showing that the class is so numerous that joinder of all the members would be impracticable, that there are questions of law or fact that are common to the class, that the claims of the named plaintiffs are typical of those of the class members, and that the named plaintiffs can fairly and adequately protect the interests of the class members.
Class action applicants must also satisfy one of the three provisions of Rule 4:32-1(b), Zazzali said. The two former Wal-Mart employees argued that they met the requirements of subsection (b)(3), which requires that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Subsection (b)(3) directs courts to consider the interest of class members in individually controlling separate claims, the existence of any other litigation concerning the controversy brought by class members, and "the difficulties likely to be encountered in the management of a class action."
Zazzali found that there are a number of common questions, "most notably the meaning and significance of Wal-Mart's corporate policies concerning breaks and off-the-clock work," as well as "[t]he impact of the Associate Handbook's disclaimer and the uniformity of new employee orientation."
"A trier of fact may appropriately consider whether Wal-Mart promoted uncompensated work and created a work environment where uniformly applicable policies were ignored as part of a corporate-wide effort to reduce labor expenses," Zazzali said. He also found there are common evidentiary questions regarding both sides' expert reports and company documents.
Although resolution of all the common issues still would leave issues regarding individual class members, "the mere existence of remainder issues is insufficient to defeat class certification in New Jersey," Zazzali said. He found that Wal-Mart will still have the opportunity to pursue its individualized defenses in a class action. "We are confident that, on remand, the trial court and parties' counsel can resolve the practical challenges presented by this litigation's individualized questions of law or fact," Zazzali said.
State Agency Would Be an 'Inferior Forum.'
Turning to the question of the superiority of proceeding as a class action versus other available methods, Zazzali found that filing individual claims with the wage collection division would be "an inferior forum for the adjudication of this controversy."
"[T]he nominal value of each class members' claim counsels in favor of class litigation and against adjudication before the agency," Zazzali said.
"Independently, they lack the financial resources of their corporate adversary. The equalizing mechanism of representative litigation allows them to adequately seek redress." He also found that the administrative procedures "favor parties with greater resources and litigation experience" and that a two-year statute of limitations applies to administrative claims, compared to a six-year limitations period for litigating contract claims.
Class litigation would not compromise Wal-Mart's due process rights and would enable the company to "resolve the claims of its current and former employees across the State in an efficient manner that treats similarly-situated claimants consistently," Zazzali said.
According to Wal-Mart, there are no similar claims pending in court or the state agency, Zazzali said. He observed that there may be "a variety of reasons, including a lack of motivation to redress their small claims, legitimate fears concerning employer retaliation, lack of resources, or a sense of powerlessness when confronting their would-be corporate adversary."
"We cannot ignore the reality that if the proposed class is not certified, thousands of aggrieved employees will not seek redress for [Wal-Mart's] alleged wrongdoing," Zazzali said.
"[W]e are satisfied that the likely manageability obstacles of the present litigation can be overcome," Zazzali said. He pointed out that "courts in California and Pennsylvania have conducted trials--both of which resulted in jury verdicts--of similarly-pled, state-wide class actions against Wal-Mart" and observed that "[o]ur trial courts are equally capable of managing such complex litigation."
Judith L. Spanier of Abbey Spanier Rodd & Abrams in New York represented the workers. Michael K. Furey of Riker, Danzig, Scherer, Hyland & Perretti in Morristown, N.J., represented the company.
The decision appears in Section E and may be accessed on the Internet here.
By Susan J. McGolrick
May 9, 2007: Local 89 Teamsters at Kroger’s Kentucky Distribution Center have new agreements that protect Teamster standards after a quickie two-day strike.
Teamsters were fighting for their job security and their Teamster standards after Kroger turned over the warehouse to two third-party contractors, Zenith and Transervice, in February.
Teamsters at the facility walked out on April 18 after negotiations broke down with the two contractors.
Local 89 members put up strong picket lines at the facility. “We heard that no work got done inside,” reported Mark “Gator” Horsley from the picket line. Horsley is a Local 89 member at Zenith.
The new agreements are for six years—two years longer than the regional Kroger agreement.
The new Zenith agreement includes new language on overtime. If forced overtime is not reduced, the company will start having to pay double-time for forced overtime. Before the strike, many warehouse employees were working seven days a week.
May 9, 2007: The United Food and Commercial Workers (UFCW) is negotiating new contracts that cover 65,000 grocery workers at Albertsons, Vons, and Ralphs in southern California.
The grocery chains are gearing up for a possible strike, and Teamsters need to be ready to support the clerks.
Healthcare is the big issue in the negotiations. The UFCW lost a 141-day strike against the grocery chains in 2004, and the union agreed to inferior healthcare coverage for new hires to end the strike. Under the current agreement, only 29 percent of new hires are eligible for coverage—and only seven percent of new hires actually get covered.
“We need to stick together with our UFCW brothers and sisters,” said Frank Halstead, a Ralphs warehouse worker in Teamster Local 572. “If the chains get away with more healthcare cuts, it’s only a matter of time before they come after our Teamster benefits.”
The chains have formed a mutual-defense pact. If the union strikes at one of the chains, the other two chains will lock out UFCW members within 48 hours.
“The companies are united. We should be too,” Halstead said. “We have to stand up and say we won’t cross UFCW picket lines. Our future is on the line.”
May 9, 2007: by Elliot Zwiebach for Supermarket News — LOS ANGELES - Unified Western Grocers here said Monday it has signed a letter of understanding with Associated Grocers, Seattle, to purchase certain assets and assume certain liabilities of the Seattle-based cooperative.
The transaction is subject to completion of due diligence, execution of a definitive purchase agreement and approval by the boards of both companies, AG shareholders and federal and state regulatory agencies, but the companies said they expect to close on the transaction by late summer.
The purchase would make Unified a $4-billion-plus company — $3 billion in volume from Unified, $1.1 billion from AG — with distribution up and down the West Coast as well as in several Western states, Hawaii and other Pacific locales. Al Plamann, president and chief executive officer of Unified, said both organizations would benefit from the efficiencies and synergies that would result from the combination, and John Runyan, AG president and CEO, said the combination would create a very competitive grocery industry force for independents in the Western U.S."
AG announced last year it was deciding whether to sell, form a partnership with another company or simply reinvest in the existing company as part of an effort to find the best way to prepare its members for the future with a stable supply chain. Unified has been supplying AG's nonfood needs since late 2001.
Unified was created in September 1999 when Certified Grocers of Los Angeles and United Grocers, Portland, Ore., merged.
In its first study of how an American company treats its workers, Human Rights Watch asserted yesterday that Wal-Mart’s aggressive efforts to keep out labor unions often violated federal law and infringed on its workers’ rights.
April 20, 2007: Teamsters Local 89 workers are back on the job at a Louisville warehouse and trucking operation that supplies groceries to Kroger stores across Kentucky and Southern Indiana.
It's deja vu in Southern California, with the big chains ganging up on workers and threatening to lock them out of stores—just like they did three years ago, when companies forced 60,000 workers out into the streets in an attempt to eliminate meaningful health care coverage.
Today, workers at grocery chain Supervalu are being faced with the same threats -- and you can help by telling SuperValu's CEO to do the right thing for his workers:
Supervalu's workers had hoped that when Supervalu bought Albertsons, another major California grocery chain, the merger would generate a more positive atmosphere in contract negotiations.
But that hasn't happened. Supervalu appears to be on the same negative path that produced the nearly five month disruption three years ago. The company is refusing to provide workers with affordable health coverage and a living wage—the same workers that are working so hard to make Supervalu and Albertsons successful and profitable once more.
Supervalu needs to know that America is watching them. You can help -- tell Supervalu CEO Jeffrey Noddle that you support grocery workers:
Tell Mr. Noddle to do the right thing and extend the Southern California grocery workers a contract with affordable health care and a living wage.
Remember, Supervalu may not want to hear from you. They might try to block your email, causing it to be sent back to you. If your email gets blocked, please call the company and give them your message in person instead. Just dial (952) 828-4000 and tell the receptionist that you have a message for Mr. Noddle.
We're more powerful when we speak together -- and California's grocery workers need that power on their side. So let's make it happen!
April 18, 2007: Over 700 members of Local 89 went out on strike at the Kroger Kentucky Distribution Center in Louisville early Wednesday morning. This strike is the latest step in Local 89's fight against third-party contracting at Kroger.
In February, Kroger turned over operations of its Kentucky Distribution Center to two third-party contractors. Transervice Logistics took over trucking operations, while Zenith Logistics took over the warehouse. Local 89 members at both companies have walked out.
Local 89 members walked out after talks broke down with the two companies.
“The mood is really strong out here on the picket line,” reported Mark “Gator” Horsley, a Local 89 member on strike. “We just turned a truck around a few minutes ago, and we hear that no work is getting done inside.”
Earlier this year, Local 89 secured commitments to extend picket lines in the event of a strike. Extending the pickets would give Local 89 Teamsters a big boost in their fight—and make Kroger think twice about outsourcing at their other facilities.
Louisville Teamsters are on the front line against outsourcing—a national issue for Teamsters at distribution centers and warehouses. We need a national strategy to protect our jobs and our contracts.
April 2, 2007: Members of the International Brotherhood of Teamsters March 30 voted to reject a contract offer from Costco Wholesale Corp. to cover about 3,300 East Coast employees, according to an IBT official.
Rome Aloise, chairman of the union's Costco contract negotiating committee, said about 89 percent of union members participating in the mail ballot voted against the Costco proposal. About 40 percent of those eligible to vote participated, he said.
The current contract expired March 15 but members are continuing to work under a temporary extension. IBT members at Costco are service clerks, service assistants, and truck drivers.
The union's contract negotiating committee had agreed unanimously against recommending the Costco offer for ratification, Aloise told BNA, based on what the committee regarded to be substandard pension provisions.
"We are requesting that the company meet to attempt to find a resolution to the agreement and come to an offer that can be recommended by the union negotiating committee," Aloise said March 30. He said he expected negotiations to resume in mid-April.
Costco officials did not immediately return calls from BNA seeking comment on the Teamsters vote.
The rejected offer would have covered about 3,300 employees represented by IBT at 16 Costco locations in New York, New Jersey, Maryland, and Virginia.
The rejection does not affect the much larger Teamsters Costco unit on the West Coast, which approved a new three-year contract in early March. The West Coast agreement covers about 10,000 Teamsters-represented employees at 40 Costco locations in California, Aloise said.
Although the wage increases offered to the East Coast unit were not as high as those offered to the West Coast, the main source of dissatisfaction with the rejected offer was the pension provisions, according to the Teamsters leader, who is also secretary-treasurer of IBT Local 853 in San Leandro, Calif.
The wage increase for the West Coast averaged 45 cents per hour in each of the three years of the contract, Aloise said. The hourly average is inclusive of the semi-annual bonuses that are a feature of the Costco compensation system, he said.
"Wages are always important, but you have to remember that Costco has the best wages in the entire retail industry. You'd have to work at Wal-Mart for five years to earn the same as the starting rate at Costco," Aloise said.
IBT wants Costco to scrap the current system of 401(k) savings plans for East Coast Teamsters-represented employees and bring those employees into the Western Conference of Teamsters Pension Trust Fund, which currently provides the pension benefits under the contract covering Costco employees on the West Coast, Aloise said.
The Western Conference Fund would provide East Coast Costco workers with a defined benefit pension plan that is not currently available to them, according to Aloise. Costco is already the ninth largest employer contributor to the Western Conference Fund, he said, based on its longstanding contract for the West Coast employees.
February 27, 2007: The Central States Pension Fund has invested $54 million in Wal-Mart, a notorious union-buster.
According to financial documents released by Central States, the fund owns $34.8 million in Wal-Mart stock and another $10.9 million in Wal-Mart bonds.
Since Central States invested in Wal-Mart, the fund has lost over $1.8 million on the stocks and $1 million on the bonds.
Central States also owns $8.8 million in Wal-Mart de Mexico. This stock has increased its value since the fund bought it.
With the labor movement and Change to Win uniting to fight back against Wal-Mart’s anti-union policies—and with Wal-Mart being such a bad investment—Teamster members have to ask: Why is Central States banking our retirement money on Wal-Mart?