Taco Bell Corp. systematically cheated Washington state workers by coercing them into unpaid overtime, failing to record hours worked and committing other wage violations, a Seattle jury found Tuesday in a class-action suit against the Irvine-based fast food chain.
The decision affects as many as 13,000 current and former workers at 62 company-owned restaurants. Most were young or minority employees who were paid the minimum wage.
The 12-person state court jury unanimously found a pattern of willful offenses to deprive employees of pay. That finding will double most of the damages to be awarded during a later phase of the trial, said Rebecca Roe, a lawyer for the workers.
Taco Bell could wind up owing "in the neighborhood of $10 million" even without doubling of damages, another plaintiff lawyer, William Rutzick, told Associated Press.
The suit alleged violations from February 1992 to the present, and 68 witnesses testified against the company. They included Regina Jones, a high school dropout who said that for months she worked 70 to 80 hours a week running a Taco Bell in the logging town of Aberdeen while being paid for only 40 hours a week as an hourly employee.
"I think they have a lot to learn by this," Jones said after the verdict. "There's nothing worse than having a 16-year-old start out their first job at Taco Bell and getting ripped off."
Taco Bell executives attributed violations to a few renegade managers who were fired after the company learned of problems. It said its policy has always been to pay employees for time actually worked.
"We have thousands and thousands of good people working at Taco Bell following our policies every day," Jonathan Blum, a Taco Bell spokesman, said after the jury returned its verdict. He said the decision will be appealed.
Roe told jurors that Taco Bell, a subsidiary of PepsiCo Inc., created a corporate culture focused obsessively on profit.
Only three people handled human resource issues, including compliance with labor laws, for 30,000 employees in eight Western states, Roe said.
Testimony showed that store managers ran computer checks hourly to ensure their labor costs were in line with the amount of food sold under company formulas.
The jurors found violations on several fronts: forcing workers to wait for restaurants to get busy before clocking in, forcing them to work after clocking out, failing to record hours worked on company records, and providing too few uniforms, making employees launder their work clothes daily after going home.
Roe said evidence also suggested that Taco Bell restaurants in California had shifted overtime hours from one work period to another to avoid paying extra.
Nearly all the testimony in Seattle focused on Washington state, and California Restaurant Assn. officials said they were unaware of any similar actions in California.
In a similar case in South Carolina, two employees of Pizza Hut, another PepsiCo subsidiary, are seeking class-action status in their lawsuits involving wage and hour claims. Pizza Hut spokesman Rob Dowdy said the company has admitted laws were broken and has offered to pay the two workers back wages but that it regards the cases as isolated incidents.