Polion v. Wal-Mart Stores, Inc.

• Decision Date: 06 December 2004
• Docket Number: 0103645
• Citation: 2004 MBAR 553
• Parties: Elaine Polion et al.[1] v. Wal-Mart Stores, Inc.
• Court: Massachusetts Superior Court

2004-MBAR-553

Elaine Polion et al.^[1] v. Wal-Mart Stores, Inc.

No. 0103645

Superior Court of Massachusetts

December 6, 2004

Opinion No.: 86917

As-is Docket Number: 01-03645

Venue Middlesex

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Fahey, J.

Opinion Title: MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFS' MOTION FOR RECONSIDERATION AND REQUEST FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT, AND DEFENDANTS' MOTION FOR CLARIFICATION OR RECONSIDERATION

The plaintiffs brought this civil action against their former employer, Wal-Mart Stores, Inc. (Wal-Mart), alleging state-law-based causes of action. Wal-Mart removed the case to federal court, which, in turn remanded it back to state court. In September 2002, Plaintiffs sought leave to amend their Complaint. This court denied Plaintiffs' motion in part and allowed it in part on February 11, 2003. The Plaintiffs moved to Reconsider and/or Request Leave to File a Second Amended Complaint based upon newly discovered evidence. For the reasons provided below, the Plaintiffs' motion was allowed on September 29, 2004. Wal-Mart now moves for clarification, or in the alternative, reconsideration of this court's decision. Wal-Mart's Motion for Clarification is ALLOWED but its request for limitation is DENIED.

BACKGROUND

Plaintiffs Kelly James and Crystal Salvas filed the original Complaint in August 2001 alleging 11 causes of action including: breach of implied-in-fact contract for missed meal and rest breaks and "off-the-clock work"; breach of unilateral contract to pay wages; restitution; conversion; breach of implied covenant of good faith and fair dealing; failure to pay minimum wages and overtime pursuant to G.L.c. 151; and tortious interference with contractual relations.

Plaintiffs alleged that Wal-Mart's "scheme involved, inter alia, failure to record any pay for hourly employees' off-the-clock work and overtime, and altering time records of class members and preventing such employees from taking and/or completing their rest/meal breaks. Under Wal-Mart's unfair and illegal practice and policy described herein, Wal-Mart prohibits its hourly paid employees from working overtime yet mandates that they finish all their assigned tasks. When these practices are combined with Wal-Mart's gross understaffing of its stores Wal-Mart is successful in creating a working environment in which working off-the-clock is essentially mandatory."

Compl par. 1. Pursuant to Massachusetts Superior Court Rule 29 Plaintiffs filed their Complaint with a cover sheet and statement of damages in excess of $25,000.

Wal-Mart removed the case to U.S. District Court of Massachusetts in September 2001. The Plaintiffs' Motion to Remand was heard on November 29, 2001 by Judge Woodlock. James et al. v. Wal-Mart Stores, Inc., et al., No. CA-01-11624-DPW (D.Mass.) (Woodlock, J.) A transcript of this hearing was submitted in the record. Transcript, Nov. 29, 2001 (Fisher Aff. Ex. 5) (Tr.).

The named plaintiffs, Kelly James and Crystal Salvas, worked for Wal-Mart for a year and a half and for 11 months, respectively. Their hourly wage was $7.55 an hour, which, at 40 hours a week, equals approximate1y $15,000 a year. Tr. at 13.

On the issue of attorneys fees, Wal-Mart's counsel argued at the remand hearing in federal court: "We're relying on the Fifth Circuit's discussion in Abbott where the state statute at issue provides for attorneys fees to go to the class representative. And here we point to Chapter 149, Section 150..." The Court noted that G.L.c. 150, the "Payment of Wages Act," was not at issue, to which Wal-Mart's counsel stated, "Wal-Mart disagrees with that... Section 150 provides the avenue for a violation of 148. They allege in Count 8 that the statuteùthat 149 and 148 have been violated. They ask for punitive damages. They ask for attorneys fees. And you can't get that for conversion under Massachusetts law. The only way to get there is if they are bringing a claim under 150. Now they disavow that." Tr. at 7-8 (emphasis added). The Court responded, "So they are judicially estopped." Tr. 8.

In Count 8, however, Plaintiffs sought only punitive damages, not attorneys fees. Comp. par. 101 (Fisher Aff. Ex. 1). Plaintiffs sought attorneys fees and treble damages in Counts 9 and 10 pursuant to G.L.c. 151, §§1A, 1B, and 20 for Wal-Mart's alleged failure to pay overtime wages and failure to pay minimum wage. Comp. pars. 102-12.

Defendant's counsel also told the federal judge that section 150 of Chapter 149 "also covers violations for failure to pay the minimum wage rate which claim they do bring. And it is not clear whether they disavow that as well. There is another civil enforcement provision for minimum wage violations. However, 150 is the provision that expressly provides for class actions." Tr. 8.

Plaintiffs actually brought the minimum wage violation claim, Count 10, under G.L.c. 151, §§1, 20. Noting the Complaint does not raise section 150 on the minimum wage violation claim, Judge Woodlock stated, "They say they don't have 150 involved in this case. Then they're dead in the water if they ever attempt to raise 150. You say the only avenue that they've got is 150... I mean, the short of it is that as far as I'm concerned, they are foreclosed by their briefing on this from the pursuit of these kinds of claims." Tr. at 8-9. (emphasis added). Of Plaintiffs' counsel, Judge Woodlock asked, "You know you're going to be barred?" Counsel responded, "Yes, Your Honor." The Court stated, "I mean, there won't be any opportunity for you to use 150." Counsel responded, "Yes, Your Honor." The Court: "That's clear?" Counsel: "That's crystal clear." Tr. at 14-15.

Although Wal-Mart argued that G.L.c. 149, §150 was implicated, Plaintiffs brought their minimum wage and failure to pay overtime pay claims as violations of G.L.c. 151, §§1, 1B. Plaintiffs asserted that they did not file a Payment of Wages Act claim because the statute was inapplicable "to the substance" of their stated claims and they had not filed a grievance with the Massachusetts Attorney General as would be required. Pl. Reply Mem. in Support of Motion to Remand, Nov. 29, 2001, at 8, (Fisher Aff., Ex. 4). Plaintiffs also argued that even if the Payment of Wages Act applied, there was no federal jurisdiction. Id. at 9.

On the question of federal jurisdiction, Judge Woodlock stated: "The Supreme Court hasn't overruled [Zahn v. International Paper Co., 414 U.S. 291, 294 (1973)]. It expresses certain views that have been the subject of criticism and there are courts that have taken expansive views with respect to attorneys fees gobbling up the jurisdictional amount to permit people to come into Federal Court when otherwise they would not. I don't accept those. Here it is a very large class. It seems to me that allocation of attorneys fees would be throughout the class... I look at the state of the attorneys fees at the time of this case being brought here and recognize that unless I aggregate those attorneys fees, there's no way these particular named plaintiffs can meet the jurisdictional amount." Tr. at 15.

Judge Woodlock found the amount-in-controversy did not meet the jurisdictional minimum, allowed the Plaintiffs' motion, and remanded this case to Superior Court.

On September 20, 2002, Plaintiffs filed a Motion For Leave of Court to File First Amended Complaint to add a claim under G.L.c. 149, §§100, 148, to add Elaine Polion, and to allow the withdrawal of Ms. James as named representatives. A hearing was held before this court on February 5, 2003.

On February 11, 2003, this court denied Plaintiffs' Motion to Amend their Complaint to add a claim under G.L.c. 149, §148 on the grounds of untimeliness and that Plaintiffs' counsel waived "the c. 149 sec. 150 claims they now seek to add." This court also ruled there was no private right of action under §100. Order on Pls.' 1st Motion to Amend, Feb. 11, 2003 (Fahey, J.). This court allowed Plaintiffs to amend their Complaint to add Elaine Polion as a named representative and allowed the withdrawal of Ms. James. The Plaintiffs subsequently dismissed their claims against two individual Wal-Mart store managers and now claim that the residency of these defendants had been the only basis for Wal-Mart's assertion of diversity of citizenship.

In the spring 2004, Plaintiffs learned of a New York Times article entitled, Altering of Worker Time Cards Spurs Growing Number of Suits. N.Y. Times, Apr. 4, 2004, A1 (Burton Aff., Ex. 7). According to the article, the phrase "one-minute clock-outs" allegedly meant that some Wal-Mart employees might not have been paid for several hours worked during their regular shift. Plaintiffs had previously understood the phrase to mean that small increments of time were shaved off employees' time cards.

An hourly Wal-Mart employee swipes a badge into a clock before and after commencing work. Shapiro Aff. par. 7, Aug. 2, 2004. This procedure records when employees come in to work at the beginning of their shift, when they "punch out" and then in again for a meal break, and when they finally leave at the end of the day. Employees are paid only for the time they are "punched in." Employees who forget to punch in or out for meal breaks will only have three time punches recorded at the end of that day.

The New York Times article described the "one-minute clock-out" as a practice whereby some managers altered time cards containing only three punches by punching the time card to read one minute after the last punch. If uncorrected this practice would result in a failure to pay the employee for the entire second half of his or her shift. The article also identified the existence of a video that Wal-Mart broadcast to all store managers "last April" (i.e....