Wal-Mart’s Record Seating Settlement in Williamson: $65 Million

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On December 6, 2018, Judge Edward Davila approved a $65 million PAGA settlement for Wal-Mart’s failure to provide seats to its front-end cashiers. Williamson v. Wal-Mart Stores, Inc., No. 5:09-cv-03339-EJD (N.D. Cal. Dec. 6, 2018), Order Granting Motion for Preliminary Approval (slip op. available here). This represents the largest PAGA settlement in the history of the statute. In addition, the settlement provided for injunctive relief in the form of a “Seating Pilot Program” for these employees.

Suitable seating is one of the worker protections covered by California’s Wage Orders, which have the same dignity as statutes, are remedial in nature, and are to be broadly construed to effectuate the goal of protecting the comfort and welfare of employees. Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004, 1027 (2012). The suitable seating requirement at issue is contained in section 14(A) of the of the Wage Order and states: “All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.”

Although this sentence has been in the Wage Orders for decades and was originally included as a protection for women and children, its meaning was frequently debated by employers, who argued that it was only applicable if the employer believed that seating would have no effect on the job—essentially rendering it a nullity. However, in 2016, the California Supreme Court in Kilby v. CVS Pharmacy, Inc., 63 Cal.4th 1 (2016), issued its interpretation. As the Supreme Court explained, first, “[t]here is no principled reason for denying an employee a seat when he spends a substantial part of his workday at a single location performing tasks that could reasonably be done while seated, merely because his job duties include other tasks that must be done standing.” Furthermore, “[t]he inquiry does not turn on the individual assignments given to each employee, but on consideration of the overall job duties performed at the particular location by any employee while working there, and whether those tasks reasonably permit seated work.” Finally, it stated:

When evaluating whether the “nature of the work reasonably permits the use of seats,” courts must examine subsets of an employee’s total tasks and duties by location, such as those performed at a cash register or a teller window, and consider whether it is feasible for an employee to perform each set of location-specific tasks while seated . . . . An employee may be entitled to a seat to perform tasks at a particular location even if his job duties include other standing tasks, so long as provision of a seat would not interfere with performance of standing tasks . . . the frequency and duration of those tasks with respect to each other, and whether sitting, or the frequency of transition between sitting and standing, would unreasonably interfere with other standing tasks or the quality and effectiveness of overall job performance.

Id. at 10, 17-18.

The Wal-Mart settlement was reached when the parties were less than a month away from trial, and after nearly a decade of litigation. Notably, unlike many PAGA settlements, because the Williamson case was one of the first suitable seating cases filed, it faced unique challenges, such as a dispute regarding if Wage Order claims could be brought under PAGA. Moreover, unlike many PAGA actions, this was an already-certified class action.

Although, at first blush, the settlement may seem like an extraordinary gift to the plaintiffs, a closer analysis shows that it is in fact quite reasonable. The settlement involved approximately 99,000 employees and 2,610,921 pay periods. Thus, the settlement provided for approximately $25 per pay period. The PAGA statute provides for default penalties of $100 for each initial violation and $200 for each subsequent violation. Accordingly, when weighed against Wal-Mart’s potential exposure at trial, the settlement amounts to only approximately 12.45% of its exposure.

Authored by:
Arnab Banerjee, Senior Counsel