Dive Brief:

• Wal-Mart failed to properly compensate some 850 of its truck drivers under its own terms of employment and against California law, a federal jury decided last week, recommending that the retail giant owes drivers $55 million in backpay, according to Reuters. The actual penalty will be decided by a judge.

• Attorneys for the drivers, who had hauled goods for Wal-Mart between October 2005 and October 2015, were seeking damages of $72 million. Additional damages and penalties could balloon Wal-Mart’s tab more than $150 million, lawyers said.

• Wal-Mart spokesperson Randy Hargrove told Reuters that the company disputes the court finding. “We strongly believe that our truck drivers are paid in compliance with California law and often in excess of what California law requires,” he said, while also noting that the company’s drivers annually earn an average $80,000 to more than $100,000. Wal-Mart is likely to appeal the verdict, Hargrove also said.

Dive Insight:

The drivers filed their lawsuit in 2008, not long after Wal-Mart had instituted a compensation plan that paid them according to mileage and activity rather than hours worked. They said the plan, which Wal-Mart eventually stopped using last year, violated California state law.

That meant that jurors were tasked with parsing out what activities should be compensated and what didn’t have to be under state and federal labor laws. In the end, jurors decided that the retailer must compensate drivers for pre- and post-trip inspections, mandatory rest breaks and layovers between trips that couldn’t be helped, and decided against compensation for fueling up and washing trucks.

U.S. District Judge Susan Illston in San Francisco previously ruled that Wal-Mart violated California law for failing to pay its truck driving employees minimum wage. If she agrees that Wal-Mart acted willfully in compensating drivers against state law, she could increase the damages set by the jury.

Butch Wagner, an attorney for the drivers, said in closing arguments that the retailer hadn’t followed its own terms of compensation. “There's nothing in any of those three manuals that covered 10 years of time that show the drivers were paid for any of these tasks that are on your verdict form,” Wagner said, according to the Los Angeles Times. And the drivers weren’t even paid minimum wage for layovers, despite the fact that Wal-Mart controlled their time because they were required to stay with their trucks. 

But attorneys for Wal-Mart said that the drivers’ compensation included payment some tasks that took a few minutes but were too small to require separate compensation. Wal-Mart attorney Scott Edelman also noted that while drivers were paid for overnight layovers, they were free to go to the movies or exercise.

But those arguments don't really get at the heart of the matter, which is that Wal-Mart's compensation system allegedly failed to reach minimum wage, that in many aspects allegedly failed to adhere to its own internal rules, or that in other aspects it allegedly broke California labor law. Illston will have the final say in the matter.