Judge Rules Wal-Mart Violated Labor Laws

The recession is driving hordes of customers to Wal-Mart stores as workers stock up for Fourth of July barbecues and picnics, and its sunny new logo unveiled this week reflects good times for the mega-discount retailer. But the company's reputation for unfair labor practices is casting a big, dark shadow that makes socially conscious investors run for the hills.

A Minnesota state judge ruled that the company violated state laws on several labor fronts that could land the retailer over $2 billion in fines. The New York Times reported that the judge ruled that Wal-Mart owed $6.5 billion to 56,000 current and former employees because of contract violations including a failure to give employees promised rest breaks at least 1.5 million times -- which represents a possible $1,000 penalty for each violation. The judge said that the store's Minnesota managers had broken the law systematically by having workers take training sessions while off the clock, although he found that managers didn't routinely make cashiers and other employees work off the clock while performing their regular functions.

According to a Reuters report, a Wal-Mart spokesperson said that the company may appeal the decision and that "the retailer's policies are to pay every employee for every hour worked and to make rest and meal breaks available for its employees -- and that managers who violate the policies are subject to discipline."

The ruling was the result of a 2001 lawsuit brought by four women; there are dozens more such lawsuits against Wal-Mart across the country.