Case: Zavala v. Wal-Mart Stores, Inc.

On November 10, 2003, a group of 17 undocumented immigrant workers, who provided janitorial services at Wal-Mart stores nationwide, filed a class action lawsuit in the U.S. District Court for the District of New Jersey against Wal-Mart Stores Inc., alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq.; the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§201 et seq.; and conspiracy to violate civil rights under 42 U.S.C. §1985(3). Plaintiffs claimed that Wal-Mart Inc. was engaged in a criminal racketeering enterprise through which it conspired with various cleaning contractors to hire illegal labor to clean its thousands of stores throughout the country, thereby saving millions of dollars in labor costs. Plaintiffs' complaint, as amended, provided a detailed litany of alleged acts committed by Wal-Mart employees and others in furtherance of the alleged conspiracy to violate federal immigration law and to commit money laundering. Plaintiffs alleged that they and other class members were denied proper wages, overtime, and benefits. They sought injunctive, declaratory, and monetary relief.

In early 2004, plaintiffs filed an amended complaint, which included factual allegations concerning immigration raids that had been recently conducted at Wal-Mart stores. Plaintiffs noted that on October 23, 2003, federal officers with the United States Immigration and Customs Enforcement (ICE) raided Wal-Mart retail stores in 21 states as part of "Operation Rollback." Hundreds of janitors were arrested, including 12 of the named plaintiffs. Federal agents also raided Wal-Mart's Bentonville, Arkansas headquarters.

Following the filing of the Amended Complaint, the parties notified the District Court that in March 2005, the U.S. Department of Justice had reached an $11 million global civil settlement with Wal-Mart in connection with its immigration investigation. Several of Wal-Mart's janitorial contractors also agreed to a $4 million criminal forfeiture.

Wal-Mart denied all allegations and moved to dismiss the entire case. By order dated October 7, 2005, the District Court (Judge Joseph A. Greenway Jr.) granted Wal-Mart's motion to dismiss in part, dismissing plaintiffs' RICO claims. Zavala v. Wal-Mart Stores, Inc., 393 F.Supp.2d 295 (D.N.J.2005). Plaintiff was granted leave to amend its complaint again to restate its claims.

Following the filing of the Second Amended Complaint, Wal-Mart moved to dismiss the realleged RICO claims. On August 28, 2006, the District Court dismissed two RICO related counts of Plaintiffs' Second Amended Complaint for failure to state a claim. Zavala v. Wal-Mart Stores, Inc., 447 F.Supp.2d 379, 383-84 (D.N.J.2006). Plaintiffs' request for certifying the August 28, 2006 Order as a final judgment for immediate appeal was denied. Zavala v. Wal-Mart Stores, Inc., 2007 WL 1134110 (D.N.J.).

In 2004, the Court granted conditional class certification for any undocumented immigrants who were working for Wal-Mart as contract janitors, and 200 additional plaintiffs joined the case as a result. However, when the plaintiffs filed for final certification of the conditional class in 2009, the Court denied their motion. Under 29 U.S.C. §216(b), class certification can be granted under the FLSA for other employees “similarly situated.” Although the plaintiffs argued that they should be granted certification because they all had similar job-related duties, the Court reasoned that there was too much variation in geographic location, salaries, and supervision for the motion to be granted.

In March 2011, the parties reached a settlement agreement in which Wal-Mart paid damages to seven of the ten remaining plaintiffs for the amount of overtime that they had worked but had not been compensated for, plus $20,000 in attorneys’ fees. Wal-Mart settled with two of the other plaintiffs in April 2011 for $13,000 apiece plus attorneys’ fees. The Court dismissed the claims of the remaining plaintiff with prejudice because he failed to participate in court proceedings and could not be reached by his attorneys.

This case is now closed.