Wal-Mart agrees to $40 million settlement in class-action lawsuit by employees in Mass.

Wal-Mart to pay $40M to workers in Mass.

BOSTON — Wal-Mart Stores Inc. has agreed to pay $40 million to 87,500 Massachusetts employees who claimed the retailer denied them rest and meals breaks, manipulated time cards and refused to pay overtime, according to court documents filed Wednesday.

The settlement — believed to be one of the largest of its kind in the state — seeks to resolve a class-action lawsuit filed in 2001. It comes less than three months after the world’s largest retailer reached a deal with state prosecutors to pay $3 million to settle complaints that it didn’t give its Massachusetts workers proper meal breaks.

An affidavit filed Wednesday by plaintiffs attorney Philip Gordon says people who worked for Wal-Mart between August 1995 and this year will receive payments of between $400 and $2,500, depending upon their years of service.

“It is the largest settlement of any wage and hour class action in the history of Massachusetts, and it dwarfs settlements of similar class actions against Wal-Mart across the country,” Gordon said in an affidavit.

The settlement was reached after the court rejected a deal proposed in June and July when Gordon and other plaintiffs attorneys objected, saying it was negotiated without the knowledge or consent of class-action representatives, Wal-Mart’s payout would not exceed $20 million and the money would be consumed largely by attorneys’ fees.

The latest settlement is also subject to approval from the Middlesex Superior Court.

Under terms of the settlement, both sides are barred from commenting on the matter.

“Resolving this litigation is in the best interest of our company, our shareholders and our associates. These cases were filed years ago, and the allegations are not representative of the company we are today,” Wal-Mart spokeswoman Daphne Moore said.

The settlement guarantees the full $40 million and stipulates that no leftover funds will revert back to the Bentonville, Ark.-based Wal-Mart.

The deal “will not only provide real cash to hard working Wal-Mart employees, but should also provide a mini-stimulus to Massachusetts as the money is distributed and spent by class members around the state,” lead plaintiffs attorney Carolyn Beasley Burton said in an affidavit.

The lawsuit was part of a string of complaints filed against Wal-Mart across the country in 2001. Last December, the company agreed to pay as much as $640 million to settle 63 lawsuits over wage-and-hour violations.

Associated Press Writer Bob Salsberg contributed to this report.