Wal-Mart has settled a nearly $5.1 million class-action lawsuit brought by the estates of 73 former employees in Oklahoma.
A federal judge in Tulsa gave final approval Dec. 4 to the settlement, which calls for about a third of the money to go to the plaintiffs’ attorneys and for each of the plaintiffs to receive about $35,000 to $50,000.
The plaintiffs had sued to recover life insurance benefits they said Wal-Mart Stores Inc. wrongfully received upon the employees’ deaths.
“It was a fair result for these Oklahoma families,” said Michael D. Myers of Houston, one of the plaintiffs’ lawyers.
Wal-Mart, the world’s largest retailer, had taken out life insurance policies on its employees, making itself the beneficiary, and the lawsuit alleged that Wal-Mart had no “insurable interest in the lives of its rank-and-file employees.”
Myers said it may seem unusual that an employer would name itself the beneficiary of life insurance policies covering thousands of employees, but the situation is not that uncommon.
“Several million Americans are covered by these policies,” he said. “Most were probably never told about the insurance on their lives, meaning that their families may not know that a claim may exist for policy benefits.”
Wal-Mart chose to settle after U.S. Chief District Judge Claire Eagan decided last December not to dismiss the lawsuit.
Wal-Mart had claimed it spends millions of dollars annually to recruit, screen, train and retain its employees because its success depends on a trained, experienced work force, according to a document the judge entered into the court record last December.
The agreement to settle the case was reached this summer.
“Corporate-owned life insurance policies were products offered by life insurance companies, they were common and well-intentioned but are no longer available at Wal-Mart,” company spokesman John Simley said Tuesday. “With regard to the settlement, it’s the best possible resolution under the circumstances.”
The $5.1 million represented 100 percent of the policy benefits Wal-Mart received from the deaths of the Oklahoma employees, according to a motion plaintiffs’ attorneys filed last week.
Myers said paperwork will be sent to the class members and that the claim forms and supporting documentation will be due back by May 31.
Any unclaimed funds will be turned over to the state of Oklahoma in the name of the deceased.
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