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July 16, 2009 11:55 AM

Wal-Mart Settlement Rejected

Posted by Susan Beck

Update, 7/16/09 at 3:30 p.m.: A comment provided by Wal-Mart after our initial posting of the story appears in the last paragraph below.

Update 2, 7/16/09 at 6 p.m.: A comment provided by Frederick Furth this afternoon has been added below.

A Massachusetts state court judge on Wednesday struck down efforts by famed class action lawyer Frederick Furth to try to settle a wage-and-hour class action against Wal-Mart in that state.

As we previously reported, Furth had been accused by other plaintiffs lawyers in the case of going behind their backs to try to strike a collusive deal with Wal-Mart's lawyers from Greenberg Traurig. Furth denied the accusation and asserted that he had negotiated an excellent settlement proposal for the class that was worth $20-$40 million.

Ruling from the bench, Woburn, Massachusetts superior court judge Thomas Murtagh rejected the settlement, according to Carolyn Burton. Burton, of the Mills Law Firm in San Rafael, California, was one of the lawyers who accused Furth of colluding with Wal-Mart and of trying to hijack the case, according to court filings. Burton also said that Judge Murtagh appointed her lead counsel for the class going forward.

"The court's ruling today sent a strong message to Wal-Mart and other defendants that class actions cannot be settled behind the backs of the class representatives," stated Robert Mills of the Mills Law Firm in an e-mail after the hearing. "The court recognized that Wal-Mart's efforts to engage in 'counsel shopping' tainted the entire process. As a result Wal-Mart will now face trial in October of this year."

This Massachusetts class action, known as Salvas v. Wal-Mart Stores, is one of the few wage-and-hour cases out of more than 60 filed against the giant retailer that hasn't settled. Wal-mart has been accused of violating numerous wage and hour laws by denying mandated meal breaks, and forcing employees to work off the clock, among other things. In December, Wal-Mart agreed to pay $640 million to resolve 63 suits around the country (most of these settlement have not yet been approved by courts). The Massachusetts case, which was filed on behalf of 67,000 workers, was not part of that settlement, and is scheduled to go to trial in October.

Furth, asked for his reaction to the decision, said he didn't want to give an account of the court's ruling until he has the chance to listen to an audiotape of the proceeding. (There was no court reporter present, he says.) But he did say, "Now we'll find out, can [the Burton group] get a better settlement, and if they don't, can they try a case and win."

Wal-Mart spokesperson Michelle Bradford, responding to a request for comment, said "We repeatedly invited all the attorneys to participate in the settlement negotiations in this case, and we remain available to do so. We respectfully disagree with the court's characterization of the settlement negotiations so far."

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