Cutler v. Wal-Mart Stores, Inc.

927 A.2d 1, 175 Md. App. 177, 12 Wage & Hour Cas.2d (BNA) 1236, 2007 Md. App. LEXIS 86
CourtCourt of Special Appeals of Maryland
DecidedJune 29, 2007
Docket1376, Sept. Term, 2005
StatusPublished
Cited by15 cases

This text of 927 A.2d 1 (Cutler v. Wal-Mart Stores, Inc.) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cutler v. Wal-Mart Stores, Inc., 927 A.2d 1, 175 Md. App. 177, 12 Wage & Hour Cas.2d (BNA) 1236, 2007 Md. App. LEXIS 86 (Md. Ct. App. 2007).

Opinion

MEREDITH, Judge.

Former employees of Wal-Mart and Sam’s Club stores in Maryland who claimed they were deprived of benefits and pay for work performed filed a putative class action suit against Wal-Mart Stores, Inc., the parent company of Wal-Mart and Sam’s Club. The employees’ motion for class certification was denied by the Circuit Court for Prince George’s County on the ground that the employees failed to show that common issues predominate over individual issues. The case was later dis *181 missed by the circuit court because, absent class certification, the named plaintiffs’ claimed damages did not meet the $5,000 threshold for civil cases filed in circuit court.

On appeal, the employees argue that the circuit court abused its discretion in denying the motion for class certification. 1 Because we conclude that the circuit court did not abuse its discretion in finding that individual issues predominate, and such finding provided a legally sufficient basis to deny class certification, we shall affirm the judgment of the circuit court and need not address appellants’ arguments regarding evidentiary issues and due process.

I. Facts and Procedural History

Wal-Mart and its subsidiary, Sam’s Club, are nationwide retail chains. 2 Appellants Cutler and Pittman were formerly employed by Wal-Mart in positions paying an hourly wage. On April 23, 2002, these two former employees filed suit against Wal-Mart, seeking to assert a class action. The complaint identified the proposed class of plaintiffs as “all current and former hourly-paid employees of Wal-Mart *182 Stores, Inc. (including Wal-Mart Stores, Sam’s Club and Supercenters) in the State of Maryland from April 12, 1999 to the present[.]” The class excluded salaried employees, customer service managers, pharmacists and personnel managers. At the time of the circuit court’s decision in this case, the potential class consisted of more than 60,000 former and present Wal-Mart employees.

The complaint alleged that Wal-Mart had engaged in a “systematic and clandestine scheme” that deprived its hourly employees of rest breaks and meal breaks, and thereby under-compensated hourly employees for the total number of hours worked. The complaint contained the following ten counts: 1) breach of contract for failure to pay wages for off-the-cloek work; 2) breach of contract for failure to provide rest and meal breaks; 3) unjust enrichment/restitution; 4) promissory estoppel; 5) breach of implied covenant of good faith and fair dealing; 6) failure to pay timely wages in violation of Maryland labor statutes; 7) failure to pay all wages earned prior to termination in violation of Maryland labor statutes; 8) failure to pay overtime wages in violation of Maryland labor statutes; 9) conversion; and 10) negligent misrepresentation.

In support of their contentions, the employees relied primarily on the Wal-Mart Associate Handbook (“the Handbook”) that is provided to all hourly employees upon their hiring. The Handbook, which is uniform for all Wal-Mart stores, details corporate policies, operating procedures, and employee benefits determined by Wal-Mart’s corporate headquarters in Bentonville, Arkansas. Cutler and Pittman asserted that the Handbook “embodied the terms of their employment,” and that Wal-Mart breached the terms of the employment contract by failing to provide promised rest breaks and meal breaks and by failing to compensate hourly employees for work performed “off the clock”, i.e., not reflected in the employees’ time records.

The Handbook, however, contains two disclaimers. One disclaimer states: “This handbook is a guide, not a legal contract.” The second disclaimer, which is part of an acknowl *183 edgment that each employee must sign, states: “This handbook is intended solely as a general information guide---The policies and benefits in this handbook are for your information and do not constitute terms or conditions of employment. ... This handbook is not a contract.” The acknowledgment form each employee must sign contains the following attestation:

I have received and read this handbook as well as this Acknowledgment and ... I fully understand the contents of both as they relate to my employment with Wal-Mart. I understand that the information contained in this handbook are [sic] guidelines only, and are in no way to be interpreted as a contract.

Cutler and Pittman argue that, despite the disclaimers, the Handbook, along with the documents setting forth Wal-Mart’s corporate policies, operate to form an employment contract, and that Wal-Mart’s failure to provide certain benefits described in the Handbook constitutes an actionable breach of contract. The portion of the Handbook addressing rest breaks and meal breaks provides:

Associates will be provided break and meal periods during their scheduled work shift. Associates are paid for up to two break periods per work shift. No associate should work over six hours without taking at least a 30-minute meal period. Remember to clock in and out for meal periods. Associates should not be required nor requested to perform work during their break and/or meal periods. Associates whose break or meal period is interrupted to perform work will be compensated at the appropriate rate of pay and may be provided an additional break or meal period.

In addition to the statements in the Handbook, a Wal-Mart corporate policy document titled “PD-07” also addresses rest breaks and meal breaks. PD-07 provides that Associates who work fewer than three hours in a shift do not receive a rest break, but employees who work three to six hours in a shift receive one fifteen-minute rest break, and employees who work more than six hours in a shift receive two fifteen-minute *184 rest breaks. PD-07 also states that any employee who works more than six hours in a shift “will be provided a meal period.” Wal-Mart policy dictates that meal breaks must last at least thirty minutes, but that, with the supervisor’s permission, meal breaks may last up to an hour. Although employees are supposed to be compensated for the prescribed fifteen minute rest breaks, they do not receive compensation for meal breaks. The provision of PD-07 which addresses Wal-Mart’s official policy regarding the interruption of an employee’s rest break or meal break by a supervisor or manager states:

Supervisors and Managers may not require nor request Associates to perform work during their break and meal periods, except in extreme emergencies where no other Associate is available. Hourly Associates whose break or meal period is interrupted will receive compensation for the entire period at their regular rate of pay and will be allowed an additional break or meal period.

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Bluebook (online)
927 A.2d 1, 175 Md. App. 177, 12 Wage & Hour Cas.2d (BNA) 1236, 2007 Md. App. LEXIS 86, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cutler-v-wal-mart-stores-inc-mdctspecapp-2007.