Wal-Mart Stores, Inc. v. Hummel

Case Updates

The Pennsylvania Supreme Court upheld the verdict against Wal-Mart’s challenge that the trial court’s “Trial by Formula” procedure violated Wal-Mart’s due process right to mount a full defense to each class member’s individual claim. The case culminated in a $187 million verdict in favor of a class of nearly 200,000 Wal-Mart employees.

NCLC urged the Supreme Court of Pennsylvania to reverse a Superior Court ruling that allowed class action plaintiffs to recover based on an unprecedented theory that virtually anything in an employment handbook could be an "offer" sufficient to form a contract. In this case, plaintiffs sued the defendant company for alleged breaches of a voluntary policy to provide employees with rest breaks. The trial court entered a $187 million class-action verdict against the company; $62 million of that amount was a penalty for purported violations of Pennsylvania’s wage payment and collection law and the Superior Court affirmed the judgment on appeal.

NCLC argued in its amicus brief that the Superior Court’s loose approach to proof of a contract between an employer and its employees, and its extension of that approach to a class-action context, represent marked departures from existing Pennsylvania law as well as that of sister jurisdictions and the federal courts. Additionally, by imposing class-wide damages, and a massive class-wide statutory penalty, on proof that was plainly inadequate to establish that the company had prevented the class members from taking rest breaks, this ruling makes Pennsylvania an outlier in class-action procedure and threatens to make Pennsylvania a magnet for frivolous class action litigation. NCLC warned that this decision threatens to harm employers and Pennsylvania’s business climate by exposing business to increased numbers of baseless class actions.