Pa. appeals court upholds $188M Wal-Mart verdict
Headline Legal News
A $188 million class-action verdict against Wal-Mart Stores Inc. and Sam's Club over payment to employees for rest breaks and off-the-clock work was upheld Friday by a Pennsylvania appeals court.
A three-judge Superior Court panel said there was sufficient evidence at trial to conclude there had been a breach of contract, unjust enrichment and violations of state labor laws.
The judges also ruled in a 211-page opinion that the presiding Philadelphia judge erred in determining some of the plaintiffs' legal fees, and sent that part of the case back for recalculation.
The 2006 trial, which lasted 32 days, resulted in a finding that Wal-Mart did not pay employees for all the work they performed and did not let them take their paid, mandatory rest breaks, the judges wrote. The court awarded $46 million in attorneys' fees.
Wal-Mart spokesman Greg Rossiter said the retail giant believes the court decision was wrong in a number of respects and looks forward to additional review in the courts.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.