Braun v. Wal–mart Stores Inc.

• Decision Date: 11 August 2011
• Citation: 2011 PA Super 121,17 Wage & Hour Cas.2d (BNA) 1513,24 A.3d 875
• Parties: Michelle BRAUN, On Behalf of Herself and All Others Similarly Situated, Appelleev.WAL–MART STORES, INC., a Delaware Corporation, and Sam's Club, an Operating Segment of Wal–Mart Stores, Inc., Appellants.Dolores Hummel, On Behalf of Herself and All Others Similarly Situated, Appelleev.Wal–Mart Stores, Inc., a Delaware Corporation and Sam's Club, an Operating Segment of Wal–Mart Stores, Inc., Appellants.
• Court: Pennsylvania Superior Court

24 A.3d 875

17 Wage & Hour Cas.2d (BNA) 1513

2011 PA Super 121

Michelle BRAUN, On Behalf of Herself and All Others Similarly Situated, Appellee

v.WAL–MART STORES, INC., a Delaware Corporation, and Sam's Club, an Operating Segment of Wal–Mart Stores, Inc., Appellants.Dolores Hummel, On Behalf of Herself and All Others Similarly Situated, Appellee

v.Wal–Mart Stores, Inc., a Delaware Corporation and Sam's Club, an Operating Segment of Wal–Mart Stores, Inc., Appellants.

Superior Court of Pennsylvania.

Argued Aug. 19, 2009.Filed June 10, 2011.Reargument Denied Aug. 11, 2011.

William H. Lamb, West Chester, for appellants.Judith L. Spanier, New York, NY, Michael D. Donovan, Philadelphia, Rodney P. Bridgers, Aurora, CO, and Gerald L. Bader, Jr., Denver, CO, for appellees.BEFORE: MUSMANNO, DONOHUE, and FITZGERALD,^* JJ.OPINION PER CURIAM.

Appellants, Wal–Mart Stores, Inc. and Sam's Club (collectively, “Wal–Mart”), appeal from a judgment in the amount of $187,648,589.11 entered in the Philadelphia County Court of Common Pleas in favor of Appellees, Michelle Braun (“Braun”), Dolores Hummel (“Hummel”) (we refer to Braun and Hummel collectively as “Appellees”), and the certified class.¹ This appeal arises from claims against Wal–Mart by its hourly employees, alleging, inter alia, claims for breach of contract, unjust enrichment, and statutory violations. Under these unique facts and the liberal construction of Pennsylvania's class action rules, we hold the record substantiates the trial court's certification of the class and discern no denial of due process. We conclude that monetary payments for contractual rest breaks qualify as “wages” under the Pennsylvania Wage Payment and Collection Act (“WPCL”).² Further, we hold the trial court construed 43 P.S. § 260.10 correctly to permit recovery of statutory liquidated damages and Appellees are entitled to recover under the WPCL. We also hold there was sufficient evidence in the record for a fact finder to conclude there was a breach of contract, unjust enrichment, violation of the Pennsylvania Minimum Wage Act (“MWA”),³ and violation of the WPCL. Finally, we hold the trial court erred in calculating some of Appellees' counsel's fees by enhancing the lodestar to reflect contingent risk when the lodestar already accounted for contingent risk. Accordingly, we affirm the judgment in part as modified, reverse in part, and remand for further proceedings.

Class representative Braun was an hourly employee of a Wal–Mart store located at Franklin Mills, Pennsylvania, from November 1998 to January 1999. R.R. at 1626a.⁴ Class representative Hummel was an hourly employee of a Sam's Club store located near Reading, Pennsylvania, from 1992 to 2002. R.R. at 1635a.

At the beginning of Appellees' respective employment, Wal–Mart gave them an employee handbook; both signed an acknowledgment page stating: “[T]he policies and benefits presented in this handbook are for your information only and do not constitute terms or conditions of employment.... This handbook is not a contract.” R.R. at 6734a–36a, 6785a–86a. During the course of Appellees' employment, Wal–Mart had several policies in place regarding rest breaks and off-the-clock work. The rest break policy is known as PD–07 and the off-the-clock work policy is known as PD–43. Pls.' Ex. 4c; R.R. at 6987a–89a; Pls.' Ex. 27a; R.R. at 7020a–26a. PD–07 states in pertinent part that hourly associates ⁵ who work between three and six hours will be given one, fifteen-minute, paid, rest break, and those who work more than six hours will be given two, fifteen-minute, paid, rest breaks. Pls.' Ex. 4c; R.R. at 6987a–89a.

PD–07 was revised several times during the class period of March 19, 1998, through May 1, 2006. Pls.' Exs. 4a–4d; R.R. at 6974a–92a. Early versions stated that “[h]ourly associates whose break or meal periods [are] interrupted to perform work will receive compensation for the entire period at their regular rate of pay and be allowed an additional break or meal period.” Pls.' Ex. 4a; R.R. at 6975a–76a. After February 10, 2001, that statement was omitted. Pls.' Ex. 4b; R.R. at 6984a–85a.

The version of PD–07 governing paid rest breaks became effective in May of 2004. Pls.' Ex. 4c; R.R. at 6987a–89a. It states:

Associates will be provided breaks.... Associates are to take full, timely, uninterrupted breaks.... Associates will also be subject to disciplinary action for missing breaks or taking breaks that are too long, too short, or untimely....

* * *

This policy applies to all hourly Associates....

Break Periods (“Breaks”)

Length Break periods are 15 uninterrupted minutes in length....

Compensation Associates receive compensation for break time at the applicable rate of pay. Associates are not required to clock out or clock in for breaks....

Providing Breaks The Associate's immediate supervisor is responsible for providing breaks. Supervisors and salaried members of management will be subject to disciplinary action for failing to provide breaks in accordance with this policy and state laws.

* * *

Interruption of Breaks And Meal Periods

Supervisors and salaried members of management may not require nor request Associates to perform work during their breaks....

* * *

Compliance

Break Exception Definition: Each occasion an Associate misses a break, takes a break that is too long or too short, or takes a break that is untimely will be measured as a “break exception.”

Pls.' Ex. 4c; R.R. at 6987a–88a.

In addition to paying for non-working time on rest breaks under PD–07, Wal–Mart had a policy, PD–43, purporting to pay for all hours worked. PD–43 stated in part: “It is against Wal–Mart policy for any Associate to perform work without being paid. We are committed to compensating every Associate for the work they perform.” Pls.' Ex. 27a; R.R. at 7020a. The Wal–Mart 2006 Associate Benefits Book also described all available benefits to employees under the heading “My Money”:

Pay Programs

In addition to the pay you receive for a regular day's work, there are other programs and benefits that can supplement your income.

* * *

Paid Break Periods

Take a break and get paid for it! Defs.' Ex. 146; R.R. at 6902a–03a; see also id.; R.R. at 6790a, 6901a.

Wal–Mart employees used a time clock.⁶ In order to keep track of their hours, Appellees were required to “swipe” or “punch” their badges in and out for breaks. Pls.' Ex. 4a; R.R. at 6975a. Wal–Mart's Time Clock Punch Exception Report (“TPER”) generated a daily listing of every employee whose punches or swipes established that they took too few breaks, short breaks, or no breaks. Pls.' Ex. 2b; R.R. at 6970a–73a; Pls.' Ex. 54; R.R. at 7264a; Pls.' Ex. 90; 7443a–91a. Wal–Mart tracked employees' breaks and recorded their time from Wal–Mart's Time Clock Archive Report (“TCAR”). Pls.' Ex. 54; R.R. at 7286a–87a. This report detailed total hours worked and “total break” time. Pls.' Ex. 45; R.R. at 7086a. On February 10, 2001, Wal–Mart officially ended its policy of requiring hourly employees to swipe in and out for rest breaks. N.T., 9/12/06 (afternoon), at 25; R.R. at 1529a; Pls.' Ex. 142; R.R. at 7612a–13a; see also Pls.' Ex. 4c; R.R. at 6987a–89a. TPER and TCAR were used in the regular course of Wal–Mart's business. See, e.g., N.T., 9/9/04, at 75–76; N.T., 9/10/04, at 82–85; R.R. at 342a–45a.

Meanwhile, Wal–Mart retained data reflecting which employees were operating cash registers and, during their shifts, when they were logged onto and actively operating the cash registers. N.T., 9/21/06, at 30–36; R.R. at 1758a–63a. Wal–Mart's internal audit department used TPER and TCAR to conduct internal audits of employees' compliance with the rest-break policies. Pls.' Ex. 97; R.R. at 7493a–7501a. If the audits revealed violations of the policies, then managers or employees could be subject to discipline up to and including termination. Pls.' Ex. 4c; R.R. at 6989a; Pls.' Ex. 27a; R.R. at 7020a.

Appellees alleged that Wal–Mart failed to compensate them for rest breaks and off-the-clock work as mandated in its policies. As a result, Ms. Braun and Ms. Hummel filed separate complaints against Wal–Mart. On March 21, 2002, approximately two years after her employment ended with Wal–Mart, Ms. Braun filed a complaint, on behalf of herself and all others similarly situated, against the store manager and district manager of the Franklin Mills, Pennsylvania, Wal–Mart store. Ms. Braun filed an amended complaint on March 26, 2002, and a second amended complaint on May 28, 2002. Ms. Braun alleged a “systematic scheme of wage abuse against its hourly employees in Pennsylvania.” Braun's Second Am. Compl., at 2. More specifically, Ms. Braun alleged causes of action for breach of contract, restitution, and unjust enrichment for off-the-clock work and missed or shortened rest breaks, along with violation of the MWA, violation of the WPCL, and tortious interference with contractual relations. Id. at 4–5.

Ms. Hummel filed a petition to intervene in the Braun suit, which the trial court denied on August 26, 2004. R.R. at 396a. On August 27, 2004, the court granted summary judgment in favor of Wal–Mart and against Ms. Braun on her claims for violation of the MWA and WPCL, and for tortious interference with contractual relations. Order, 8/27/04; R.R. at 311a.

On August 30, 2004, Ms. Hummel filed a complaint on behalf of herself and all others similarly situated. The Hummel complaint alleged that Wal–Mart required its employees to miss or cut short rest breaks and work off-the-clock. Hummel Compl. at 1–2. The Hummel action contained causes of action for breach of contract, restitution, and unjust enrichment for off-the-clock work and missed or shortened break periods, along with violations of the MWA and WPCL. Wal–Mart denied these allegations and asserted, inter alia, that it did not intend to contract with its employees related to breaks. Further, Wal–Mart claimed that missed swipes did not equate to missed or skipped...