Activists to protest Wal-Mart on Friday


Staff Writer, Blethen Maine Newspapers Inc.
November 27, 2003

WATERVILLE -- Members of a local peace action group plan to distribute leaflets Friday protesting the use of overseas sweatshops making cclothing for Wal-Mart stores, the Disney corporation and other American companies.

Waterville Area Bridges for Peace and Justice will hand out informational leaflets beginning at 9:30 a.m. at the Wal-Mart store on Kennedy Memorial Drive, according to organizers.

"Members will wear sandwich boards and hand out leaflets until Wal-Mart sends someone out to ask the social justice group to leave," organizer Peter Sirois said. "At being invited to leave, the group will move on to Elm Plaza and continue leafleting in the common parking area.

"The action will not call for a boycott. It will ask that shoppers contact state legislators and private CEOs to suspend all support of sweatshops and the laws that make them possible."

Members will hand out 400 two-sided leaflets with information about Disney and Wal-Mart support of third world sweatshops, Sirois added.

"We are simply calling attention to sweatshops," organizer Claire Prontnicki said. "There is quite a lot of evidence for it. It's pretty horrible."

Prontnicki said the group showed a film on the subject last week in Waterville. Footage showed sweatshops in Bangladesh where workers are paid 11 to 17 cents per hour, an unlivable wage even in the poorest of nations, she said.

The rain date for the leafleting is Saturday.

"We started this winter when we were doing the bridge demonstrations against the war in Iraq on KMD," Prontnicki said. "There were some from that group who wanted to carry on peace and justice work."

Since starting up in the spring, the expanded group has sponsored a film and discussion series devoted to peace and justice at the Waterville Public Library. Members participated in Madison's Father Rasle Day parade with the theme Peace Around the World.

Members are planning a Peace & Justice Garden in Castonguay Square and the group is putting together an informational program dealing with militarism for local schools , according to Sirois. The group also supported the anti-Patriot Act resolution at a recent Waterville City Council meeting.

The group has approximately 25 active members from several surrounding towns and a mailing list of over 200 area supporters.

Wal-Mart set to super-size in California

By Bob Walter -- Sacramento Bee Staff Writer
November 30, 2003

The first Wal-Mart Supercenters won't open in California until spring, but their impending arrival is already changing the state's retail landscape.

The looming presence of these super-sized grocery stores, which are about half the size of Arco Arena and offer 100,000 products at cut-rate prices, is roundly blamed for the supermarket strike/lockout that has idled 70,000 workers in Southern California since October.

That strike/lockout has been underscored by efforts among unionized supermarkets to cut costs while competing against nonunion powers such as Wal-Mart.

Union and supermarket officials say a similar strike is all but inevitable next summer when labor contracts expire in Northern California.

In preparation for Wal-Mart's arrival, the Raley's and Bel Air supermarket chain has cut administrative costs with an early retirement offer and some layoffs. At the same time, the West Sacramento-based company is planning unprecedented growth, with 25 new stores scheduled to open in the next four years, said William J. Coyne, president of Raley's.

Like most of the supermarket officials and representatives interviewed, Coyne was reluctant to talk about specific competitors. But he acknowledged that Raley's is trying to become leaner, gearing up for a more competitive environment that includes everything from Supercenters to specialty grocers such as Trader Joe's and Whole Foods.

"We try to work every day with a sense of urgency," Coyne said, "to become more efficient in every area, from logistics and distribution to buying and service."

Starting in the Coachella Valley desert, Supercenters are coming to Southern California in the spring and to the rest of the state as fast as Wal-Mart can get permits.

Confirmed targets in Northern California include Lodi, Woodland, Stockton, Tracy, Yuba City, Turlock and Redding.

The Supercenters will employ thousands. Most of them will have $1 million in sales every 10 days or so, analysts say, a third higher than the typical Raley's and about double the average Safeway in the capital region.

Their low prices will reduce the cost of food, especially in the Sacramento area, which has some of the highest grocery prices in the nation, retail analysts say.

Some analysts say each of the Supercenters, which morph together a Wal-Mart discount department store and a large supermarket, will result in the closure of two traditional grocery stores. Others say entire supermarket divisions may flee the region.

And still others, mostly union officials and their supporters, say the Supercenters will spur economic policies that lower the standard of living for tens of thousands of supermarket employees. For those reasons, municipal and grass-roots forces have been marshaling from Calexico to Chico to keep the Supercenters from being built.

Bentonville, Ark.-based Wal-Mart says it plans to open 40 Supercenters in California in the next four years -- none of them closer to Sacramento than Lodi or Woodland. Analysts and Wal-Mart watchers say the number will be much higher and undoubtedly will include the capital.

David S. Rogers of suburban Chicago, a grocery analyst and academic who has done research on Wal-Mart for more than 10 years, said the company wants to open "100 to 200 stores" in California.

"With Wal-Mart," he said, "you have to look at what they do rather than what they say."

And what Wal-Mart has done -- using a combination of low prices and saturation -- in market after market is dominate or at least become a major player.

In Dallas, for example, Wal-Mart has 51 Supercenters, discount stores, neighborhood markets and Sam's Clubs, and has moved from being the sixth-ranked grocer to the top spot in less than five years, according to consulting firm Retail Forward.

In the Oklahoma City metropolitan area, where Wal-Mart operates 11 Supercenters, it went from capturing about 6 percent of that region's grocery business in 1997 to more than 30 percent in 2002, the latest year for which such data are available.

Such dominance helped push Wal-Mart's annual sales in 2002 to $247 billion, which is greater than the combined sales of the 10 largest supermarket chains in the United States.

When Wal-Mart topped the Fortune 500 for the second time this year -- by $60 billion over runner-up General Motors -- the magazine pondered whether anybody ever would displace the Bentonville behemoth.

The conclusion: not in this lifetime, barring something as unlikely as a merger of GM and Ford or Exxon Mobil and ChevronTexaco.

With about 1.45 million employees, Wal-Mart has more people in uniform than the U.S. Army (480,000 on active duty).

The company expects to hire more than 600,000 people next year, based on growth (160,000 new jobs) and turnover, said Christi Gallagher, Wal-Mart's human resources specialist in Bentonville.

Gallagher says Wal-Mart's turnover rate is about 45 percent. The industry average is 65 percent, according to the National Retail Federation.

Wal-Mart says it offers competitive wages in all of its markets and that 90 percent of its employees have health benefits, half of them through Wal-Mart. Most analysts estimate that Wal-Mart employees are paid a quarter to a third less than unionized workers in supermarkets and other retailers.

And in part because of lower labor costs, the company's relatively new Supercenters have turned Wal-Mart into the country's biggest grocer in less than a decade.

In 1992, Wal-Mart had 34 Supercenters that generated about $1 billion in sales, according to Retail Forward. By the end of 2002, the company's 1,258 Supercenters topped $100 billion.

As Wal-Mart has grown, so has its clout with suppliers. According to Retail Forward, the company accounts for 28 percent of Dial Corp.'s total sales. For Del Monte Foods, the proportion is 24 percent. Other totals, according to Retail Forward, include Clorox and Revlon at 23 percent, and Procter & Gamble at 17 percent.

And all those percentages are rising.

"If you are Procter & Gamble," said Jim Watt, a vice president at Modesto-based Save Mart Supermarkets, "and in five years, 30 percent of your business is Wal-Mart, then who owns whom?"

Wal-Mart says its relationship with its suppliers, plus its legendary distribution system, allows its Supercenters to sell groceries that cost 10 percent to more than 30 percent less than groceries at most warehouse and conventional supermarkets.

For much of the competition, the results of Wal-Mart's success are often brutal.

In Oklahoma City, more than two dozen supermarkets have closed or been converted to other uses in recent years. And the former market leader, Homeland Foods, though it still has more than 20 stores, has been in and out and back into bankruptcy protection.

In Sacramento, Raley's says it is waiting and ready. "Tom Raley would have relished this competition," Coyne said.

Raley, who died in 1991, started the $3.2 billion company that bears his name and has grown to 134 stores in California, Nevada and New Mexico. In the greater Sacramento region, Raley's controls nearly 35 percent of the grocery market share, according to Trade Dimensions, a Connecticut-based retail analyst.

Coyne said Raley's will compete not only with its "core competencies" such as service, quality products and community involvement, but also with aggressive growth.

Along with the 25 new stores in the pipeline, he did not rule out even faster growth through acquisitions of the kind that put Sacramento's Bel Air Markets and Bay Area-based Nob Hill Foods under the Raley's flag.

Raley's ultimate advantage, he said, comes from being "local," whether the store is in Land Park, Reno, Elk Grove or the Bay Area.

"We just have the ability to know our customers better than competitors that are based in Cincinnati or Boise or elsewhere," he said. "At the end of the day, I can assure you that Raley's will be standing tall."

Analysts agree with the Raley's president, though they say the company undoubtedly will lose some market share to Wal-Mart.

But not even the Supercenters will knock Raley's from the top of the charts in the Sacramento area, said Burt P. Flickinger III, a noted New York-based retail analyst.

Wal-Mart will move from nowhere into the second spot, he said, mostly at the expense of Ralphs, Albertsons and Safeway.

"The national chains will be caught in the middle," unable to compete with Wal-Mart's low prices or the loyalty of Raley's customers, he said.

Safeway spokesman Alexander Winslow wouldn't talk about competing with Supercenters but said Sacramento is a major market for Safeway, which has grown to two dozen stores in the capital region.

Trade Dimensions said Safeway has increased its market share in the last two years from about 13 percent to 17 percent.

Ralphs spokesman Terry O'Neil said his Kroger-owned firm has not grown as fast as planned in the Sacramento area and, in fact, closed five stores last year. Ralphs' market share dropped from almost 9 percent in 2001 to about 5 percent this year, Trade Dimensions said.

But O'Neil said Sacramento still holds an important place in Ralphs' long-term plans. Kroger has plenty of experience against Wal-Mart in other states, he said, "and we'll compete with what we do best: higher quality, better variety and better service."

Albertsons declined to comment.

David S. Rogers, the Chicago-area academic, and Paul Adams, an Olathe, Kan.-based analyst, agreed that the national chains were the most vulnerable.

"I think you will see significant division closures," Rogers said. "There is no God-given reason that anybody will survive, big chain or not."

Graphic: Wal-Mart overview

Wal-Mart rollout - or rollback?
By Daniel B. Wood
Staff writer of The Christian Science Monitor

23 December 2003
LOS ANGELES – It is the world's largest company and America's top private employer.  Analysts say it saved US consumers $20 billion last year in its stores alone and another $100 billion by forcing other retailers to slash prices to compete.
But as Wal-Mart stores continue to spread across the US, community opposition is also mounting from critics who say its "always low prices" mean always low wages for nonunion workers and that its famous "rollbacks" on goods roll over local businesses and economies.
The latest legal battleground is California. The retail giant wants to place the first of several dozen grocery/retail superstores in California. Faced with a rebuff in Inglewood, near Los Angeles, the company got enough signatures to put its plans to a special ballot vote. But last week, two community groups filed suit to stop the vote, which would bypass the usual City Council oversight of such developments.
Analysts say the skirmish is a window into the kind of fights Wal-Mart can expect elsewhere in coming years. Already, the firm faces some 40 lawsuits regarding allegations such as forced overtime without pay and gender discrimination. But such backlashes may not stop the larger trend that Wal-Mart represents: catering to consumers that flock to big-box stores for deep-discount values.
"Whatever the skirmishes look like on the surface, the vast majority of people vote with their purses," says Ira Kalish, global director for Deloitte Research. "The American and global consumer has internalized discounting as important to them."
Fearing the foothold of Wal-Mart in Inglewood, the city last year attempted to pass an ordinance that would have blocked the company from building a combination grocery and discount store. Such superstores are typically twice the size - 180,000 to 225,000 square feet - of a typical Wal-Mart. Under pressure of a Wal-Mart lawsuit, the ordinance was rescinded and pro-Wal-Mart groups qualified an initiative for an April vote.
Critics say it is a violation of state law for the retailer to go around elected officials to the voters and worry that the special election sets a dangerous national precedent for companies to circumvent long-established rules on matters such as environmental oversight and public hearings.
Wal-Mart officials say the Inglewood fight is not backed by the majority of residents, but rather is fueled by money and union activists who don't like the store's nonunion policies.
More fights are coming within California alone, San Diego next month will consider a ban on retail stores that exceed 130,000 square feet. Contra Costa County in northern California already passed one, though it is being challenged by Wal-Mart officials. And San Marcos recently deadlocked on whether or not to rescind approval of a second Wal-Mart there, forcing a referendum on the issue to a March vote.
"So far a disproportionate amount of Wal-Mart's country-wide expansion has been in the South, which is fairly non-union," says Mr. Kalish. "Now that they are moving into more populated, industrialized and more unionized regions, they are going to come up against ... opposition."
All this moves the giant retailer into unknown territory, because no other American retailer has ever gotten so big. But they say the disputes not likely to deter Wal-Mart from growing, because Americans have gotten used to the giant "rollback" discounts offered by the store.
"Many workers might make less money, but to the extent that millions of consumers pay less, they free up money to buy other stuff - making them and society in a sense wealthier," says Kalish.
Such assessments are anathema to labor unions and social justice organizations who say that Wal-Mart's cheap prices come at the expense of decent wages and benefits for workers. "Wal-Mart has a track record of decimating locally owned small business," says Lizette Hernandez, of the Coalition for a Better Inglewood.
Joining the fight are other citizens and area officials who say they are concerned about the preservation of neighborhoods, traffic congestion, and retail sprawl. They say the Inglewood initiative requires only a majority for approval, but will require a higher standard - two-thirds of voters - to challenge specifics of the building phase once it begins.
"Wal-Mart is trying to muscle its way into the community by taking advantage of loopholes in the law that are inappropriate," says Gerome Horton, state assemblyman from Inglewood.
Part of the increased spotlight on Wal-Mart in California has come because of protracted contract disputes between southern California grocery workers and three major supermarket chains. Vons, Ralphs, and Albertsons have repeatedly said union concessions are needed for them to compete favorably with Wal-Mart's new grocery stores. Wal-Mart sales clerks reportedly make $8.23 to $10.00 per hour, compared with a reported $17.90 for senior clerks at Vons, Ralphs, and Albertsons.
Strikers have won much public support. Similar grocery strikes are in planning stages in other states, making the California confrontation with Wal-Mart a sort of national battleground.

Grocery Unions Battle to Stop Invasion of the Giant Stores; Wal-Mart plans to open 40 of its nonunion Supercenters in California. Labor is fighting the expected onslaught, but the big retailer rarely concedes defeat.

Nancy Cleeland and Abigail Goldman
Times Staff Writers 

25 November 2003 - Los Angeles Times

Inglewood seemed to offer the perfect home for a new Wal-Mart Supercenter, with low-income residents hungry for bargains and a mayor craving the sales-tax revenue that flows from big-box stores.

But nearly two years after deciding to build on a 60-acre lot near the Hollywood Park racetrack, Wal-Mart is nowhere near pouring concrete. Instead, the world's biggest company is at war with a determined opposition, led by organized labor.

"A line has been drawn in the sand," said Donald H. Eiesland, president of Inglewood Park Cemetery and the head of Partners for Progress, a local pro-business group. "It's the union against Wal-Mart. This has nothing to do with Inglewood."

Indeed, similar battles are breaking out across California, and both sides are digging in hard. Wal-Mart Stores Inc. wants to move into the grocery business throughout the state by opening 40 Supercenters, each a 200,000-square-foot behemoth that combines a fully stocked food market with a discount mega-store -- entirely staffed by non-union employees. The United Food and Commercial Workers and the Teamsters are trying to thwart that effort, hoping to save relatively high-paying union jobs.

The unions have amassed a seven-figure war chest and are calling in political chits to fight Wal-Mart. The giant retailer is aggressively countering every move, and some analysts believe that Wal-Mart's share of grocery sales in the state could eventually reach 20%. The state's first Supercenter is set to open in March in La Quinta, near Palm Springs.

"If we have an advantage," said Robert S. McAdam, Wal-Mart's vice president for state and local government relations, "it's that we are offering what people want."

In fact, Wal-Mart has won allies by providing people of modest means a chance to stretch their dollars.

"We need to have retail outlets that are convenient and offer quality goods and services at low prices," said John Mack, president of the Los Angeles Urban League. "I really think that there are potential economic benefits for this community with the addition of a Wal-Mart."

Yet the Supercenters also threaten the 250,000 members of the UFCW and Teamsters who work in the supermarket business in California.

For decades, the unions have been a major force in the state grocery industry and have negotiated generous labor contracts. Wal-Mart pays its grocery workers an estimated $10 less per hour in wages and benefits than do the big supermarkets nationwide -- $19 versus $9. As California grocery chains brace for the competition, their workers face severe cutbacks in compensation.

"We're going to end up just like the Wal-Mart workers," said Rick Middleton, a Teamsters official in Carson who eagerly hands out copies of a paperback called "How Wal-Mart Is Destroying America." "If we don't as labor officials address this issue now, the future for our membership is dismal, very dismal."

The push for concessions has already started, prompting the longest supermarket strike in Southern California's history. About 70,000 grocery workers employed by Albertsons Inc., Kroger Co.'s Ralphs and Safeway Inc.'s Vons and Pavilions have been walking the picket lines since Oct. 11, largely to protest proposed reductions in health benefits. The supermarkets say they need these cuts to hold their own against Wal-Mart, already the nation's largest grocer.

Rick Icaza, president of one of seven UFCW locals in Southern California, has taken issue with much of the supermarkets' rhetoric since the labor dispute began. But he doesn't doubt that Wal-Mart is the biggest threat ever posed to the grocery chains -- and, in turn, his own members.

"The No. 1 enemy has still got to be Wal-Mart," he said.

The unions and their community allies have stopped Wal-Mart in some places and slowed it down in others. They have persuaded officials in at least a dozen cities and counties to adopt zoning laws to keep out Supercenters and stores like them.

Homeowner groups, backed by union money, sued to stop construction of two Supercenters in Bakersfield, arguing that the stores would drive local merchants out of business. Contra Costa County and Oakland also have passed measures that could block Supercenters.

In Los Angeles, several City Council members are drafting an ordinance to require an examination of how large-scale projects such as Supercenters would affect the community, including the possible loss of union jobs. As envisioned by supporters, the measure would allow the city to insist on higher wages as a condition of project approval.

"We want Wal-Mart to be able to help us with our economic development," said Councilman Eric Garcetti, who is co-sponsoring the measure. "We just want to be able to do it on our terms and not theirs."

Wal-Mart, however, can more than match its foes in resources and resolve.

To soften its outsider image, the retailer has hired local political insiders to coax projects through planning bureaucracies. It has promised jobs and sales-tax bonanzas to cities struggling with deficits and unemployment.

When the answer is "no," Wal-Mart rarely concedes defeat. At least nine times during its latest California push, the company has responded to legal barriers by threatening to sue or to take its case straight to local voters by forcing referendums.

That's what happened in Inglewood after the City Council in October 2002 adopted an emergency ordinance barring construction of retail stores that exceed 155,000 square feet and sell more than 20,000 nontaxable items such as food and pharmacy products. The measure was tailored to block a Supercenter.

Icaza declared victory. "Wal-Mart's plans to enter the retail grocery business in Inglewood are dead!" he crowed in a union newsletter.

But they weren't. Within a month, Wal-Mart gathered 9,250 signatures on petitions, more than enough to force a public vote. The company also threatened to sue the city for alleged procedural violations. Looking at a possible court battle or an embarrassing failure at the polls, Inglewood officials withdrew the ordinance they had passed a month earlier.

Furious with the council, Icaza ran his own candidate in city elections in June. Ralph Franklin, a former supermarket clerk and manager and now a UFCW business agent, won with 70% of the vote, ousting a council member who had gone against the union.

Worried that the council might try to trip it up again, Wal-Mart went on the offensive. In late August, the company, through a group called the Citizens Committee to Welcome Wal-Mart to Inglewood, began gathering a new batch of signatures to force a popular vote on the Supercenter. The initiative, which calls for building permits to be issued without a public hearing or environmental impact study, is expected to be on the March 2004 ballot.

"When people feel they're not getting a fair shake with the legislative process, they take things to a vote" of the electorate, said McAdam, the Wal-Mart vice president.

Wal-Mart's opponents have vowed to sue to block the initiative on the grounds that it oversteps the limits of the ballot process.

UFCW and Teamsters locals have raised dues or diverted funds from other programs to bankroll anti-Wal-Mart campaigns. With more than $1 million now available, thousands of members to draw from and encouragement from national leaders, local labor would seem to be in a strong position.

But union efforts have been hampered by personality conflicts and disagreements over strategies and goals, according to people close to the situation.

As in Inglewood, many union locals have focused on so-called site fights, winning zoning restrictions at the local level. That strategy can temporarily save union jobs and give leaders victories to celebrate, but it does little to stop the long-term march of Wal-Mart, critics say. After all, there are 478 cities in California, 88 in Los Angeles County alone.

Pushing for zoning restrictions also can backfire, stirring resentment among consumers and business owners -- even those who directly compete with Wal-Mart.

Wal-Mart opponents "try to use the government to accomplish things that they may not be able to accomplish in the marketplace," said Alan Zaremberg, president of the California Chamber of Commerce. "It's not government's role to interfere with what consumers want."

For their part, national labor strategists want local leaders to focus less on zoning campaigns and more on the daunting, long-term goal of unionizing Wal-Mart employees. Few take the advice, and those who do quickly realize just what they are up against.

George Hartwell, president of UFCW Local 1036 in Camarillo, hired 18 organizers to hit the nine Wal-Mart stores in his jurisdiction. With few leads to go on and employees in stores forbidden to talk about unions, progress was slow. Then in mid-summer, a group wearing union T-shirts was served with trespassing papers and asked to leave a Wal-Mart in Lompoc. Lawyers tussled over that for months. Now Hartwell and his crew can enter the stores, but with strict limitations. "We go through and say, 'good morning' or 'good afternoon,' just to be visible," he said.

Despite the long odds in taking on the company, many union activists insist they have no choice.

"I've put 29 years of my life into this job, and now they're trying to pull the rug out from under me," said Diane Johnson, a union cashier at a Pavilions store in Los Angeles who is helping to coordinate anti-Wal-Mart efforts in Inglewood through the Los Angeles Alliance for a New Economy.

Johnson and co-workers have made door-to-door visits and spoken from church pulpits, hoping to turn public opinion against the discounter. "For me to go backwards would just be hell," she said.

But Wal-Mart, the nation's largest seller of everything from toys to DVDs, has plenty of defenders too, some of them politically and financially powerful. They range from prominent Los Angeles toy importer Charlie Woo, who recently took up Wal-Mart's case before Los Angeles City Council members, to Jeffrey Katzenberg, a co-founder of Hollywood studio DreamWorks SKG. He lobbied former Gov. Davis against signing a statewide anti-big-box measure passed by the Legislature five years ago; Davis vetoed the bill.

McAdam said Wal-Mart doesn't order its suppliers to lobby on the company's behalf. But it does spell out for vendors the consequences of anti-Wal-Mart legislation.

"It's our belief that on certain issues, they have a vested interest in seeing ... that our company can continue to grow," McAdam said.

Wal-Mart also helps smooth entry into new markets by cultivating relationships with civic groups.

As it prepared last year to buy and renovate a former Macy's in the south Los Angeles community of Baldwin Hills, corporate officials met with leaders of the Los Angeles Urban League and arranged to hire some employees through the organization.

Allies in organized labor tried to dissuade the Urban League's Mack from cooperating. Normally pro-union, Mack turned them down, saying the community badly needed jobs and low-cost shopping options.

"I'd rather have a person on somebody's payroll -- even if it isn't at the highest wage -- than on the unemployment roll," Mack said. "We're not going to punish job seekers by refusing to refer them to Wal-Mart for a job."

By the time the Baldwin Hills-Crenshaw Plaza Wal-Mart opened in January, Wal-Mart had doled out thousands of dollars, mostly in $1,000 grants, to local institutions such as schools and youth programs. The company cut the Urban League a $3,000 check. It also provided $10,000 for new lights at the Martin Luther King Jr. Little League Baseball field.

The ordinance being considered in Los Angeles would ask planners to weigh the "community benefits" of a mega-store in any zone that receives federal, state or municipal funding or incentives -- essentially the entire city.

Like an environmental impact report, the community-benefits study would consider possible negative outcomes and propose ways to mitigate them. Wages could be held to "prevailing standards." If supermarkets were deemed the standard, that would mean union scale.

Backed by Garcetti and Councilman Ed Reyes, the ordinance could be ready for a council vote next month.

Several studies commissioned in recent years by independent groups, including the Orange County Business Council and the San Diego Taxpayers Assn., found the state would suffer a net economic loss if union jobs were traded for jobs at Wal-Mart.

Wal-Mart had declined to respond with numbers of its own until a few months ago, when it commissioned the Los Angeles County Economic Development Corp. to measure the effect of Supercenters on the region. Researcher Gregory Freeman said the study balanced wage losses with consumer savings, noting that Supercenter prices are typically 20% lower than at union markets.

The study was completed two weeks ago, Freeman said, but hasn't yet been released.

As he began his study in mid-summer, Freeman told council members that other analyses haven't fairly measured all the pros and cons of the Supercenters. For one thing, he said, savings from lower grocery prices could be used by working-class shoppers for other things, such as buying homes.

As for those merchants who won't be able to compete with Wal-Mart, others say, progress always carries a price.

"I grew up in Pennsylvania; my father had a corner market there. When I was 3 or 4, the A&P moved in and put him out of business," recalled the Chamber's Zaremberg. "That was tough for us, but I don't think anyone would go back and say we shouldn't have supermarkets."

Wal-Mart Discounts the American Dream

25 November 2003

Los Angeles Times - Home Edition

Re "An Empire Built on Bargains Remakes the Working World," Nov. 23: Wal-Mart represents a corporation that has gone amok. Its domination shows why elements of the civil society need to balance capitalism if it is to work for the entire population. When we save 7 cents on the toothpaste we buy, we don't realize that some of that 7 cents we save goes to taxes to pay for Medicaid, food stamps and emergency room visits for low-paid Wal-Mart workers. Wal-Mart has driven many companies out of business and has had the reverse effect of General Motors, which brought people into the middle class.

If Wal-Mart becomes even more dominant, it could enter a phase where it no longer needs to provide deep discounts in some areas because it will so dominate retailing. We will then have higher prices and low-wage workers. Not a pretty picture. It needs to be curbed.

Larry Wiener


Your article highlighting Wal-Mart's wage, benefits and anti-union policies explains why I am honoring the supermarket workers' picket lines. Led by Wal-Mart, American business is in a globalized race to the bottom, keeping worker compensation low and increasing productivity, which only means having one worker do the job of two. Even that archconservative Henry Ford realized that he had to pay his workers more in order for them to buy his cars and for the economy to grow. What we are witnessing today is tooth-and-claw competition that is leading to the sunset of the middle class in America.

Carl Martz


With the huge and ever-increasing profits that Wal-Mart reaps, it most certainly can afford to pay its employees living wages and full health insurance benefits. The Walton family would probably not even notice a change in lifestyle if its profits were reduced by one-half because it decided to take better care of its employees. It's all about greed.

Carol May
Los Angeles


One shudders for the future of commercial America and, particularly, free-enterprise employment when reading your article on Wal-Mart. Our nation was built upon the foundation that anyone had the opportunity to build an enterprise to supply competitive goods to eager customers -- a concept that Wal-Mart itself so successfully exemplifies. However, in prior years, competition in most cases meant like comparisons conducted within the American environment of good wages and high standards of living.

Now, manufacturers and free-enterprise workers in our nation must compete against manufacturers and workers from some of the lowest-wage areas of the world. Little wonder there will soon be no meaningful manufacturing conducted in the United States. All the "good" jobs and professional opportunities in the future will go to those who have access to government resources: direct government workers, the medical profession and, of course, teachers and others involved in our huge educational establishment.

No surprise, therefore, that economists from institutes of higher learning are so supportive of Wal-Mart's constraints upon costs.

Daniel Eliason
Santa Barbara


Reading about Wal-Mart's relentless efforts to cut prices while providing quality products and listening to its customers leads me to one thought: I hope it decides to get into providing health-care services nationwide.

Ed Kushins
Hermosa Beach


In your long story on Wal-Mart you missed the bottom line: While the average "associate" is paid poverty-level wages, Sam Walton's five heirs are worth a combined total of more than $100 billion. Wal-Mart is a national disgrace.

John Horne
Redondo Beach

Wal-Mart stirs up grocery industry

November 25, 2003

From Monday's Globe and Mail

A labour dispute at 15 Loblaw Cos. Ltd. stores in Newfoundland highlights a trend that is transforming the North American grocery industry as retailers race to lower costs and compete with the mighty Wal-Mart Stores Inc.

Last week, Loblaw locked out about 1,600 workers at its 15 Dominion stores after the employees staged rotating walkouts to protest the company's demand for wage and benefit concessions. Underlying the fight is Loblaw's view that it needs to rein in wage and benefit expenses in order to take on non-unionized, lower paying rivals - with much of the focus on Wal-Mart.

The issue has already reared its head in Ontario where Loblaw succeeded this summer in getting the United Food and Commercial Workers Union, which represents employees in that province, to agree to concessions at new, discount Real Canadian Superstores.

In Newfoundland, the Loblaw employees are represented by a different union, the Canadian Auto Workers, which refused to accept the company's wage and benefit proposals.

"This is simply about greed," CAW president Buzz Hargrove said in an interview, adding that Wal-Mart should not set labour standards for Canada. "We're not going to let the lowest common denominator dictate what's going to happen to our members."

Indeed, Wal-Mart appears to be gradually setting employee compensation standards in the North American grocery sector as it aggressively bolsters its food offerings at its conventional stores, its Sam's Clubs and its mammoth U.S. supercentres that sell everything from food to furniture. Already the supercentres have pushed some U.S. supermarkets out of business.

The Wal-Mart supercentres have triggered a wave of labour protests as competing U.S. supermarkets try to gain concessions from employees to take on the non-unionized, low-wage Wal-Mart outlets.

The latest U.S. wrangle is in Southern California where 70,000 grocery workers are on strike, unhappy with supermarket chains' demands for concessions as the retailers brace for the arrival early next year of the first of 40 Wal-Mart supercentres.

In Canada, Loblaw has been no slouch in trying to head off Wal-Mart's challenge since the world's largest retailer entered this country more than nine years ago.

Loblaw's battle plan is to expand its own discount stores, led by the Real Canadian Superstore, already a successful format in Western Canada.

The superstores are a one-stop-shopping destination with general merchandise along with food, and are designed to compete head-on with Wal-Mart. Last month, Wal-Mart launched its first four Sam's Clubs in Ontario with an eye to opening many more across Canada. Sam's Clubs carry a full range of groceries.

Loblaw president John Lederer told analysts last week that the chain - this country's largest grocer - envisages between 30 and 50 Real Canadian Superstores in Ontario "over the next number of years." (A spokesman said later some of those stores will be in Quebec, too.)

Mr. Lederer praised the UFCW for its "strong collaborative" work with Loblaw . "We think that will lead to more union jobs and still allow us to compete toe-to-toe with global players."

Not everyone agrees with this collaboration. The UAW's Mr. Hargrove said Loblaw shouldn't pay "starvation wages" just to keep up with Wal-Mart, but rather should force Wal-Mart to raise its standards.

He said Loblaw is offering a 25-cent-an-hour raise in the first year of the contract for pay that starts at $6.25 an hour - 25 cents an hour above minimum wage - and ranges to $8.32 an hour. (The company spokesman wouldn't comment.)

In Ontario, where wages are considerably higher, a dissident group of UFCW members has challenged the secretly negotiated concessions for superstores at the Ontario Labour Relations Board, and is awaiting a decision.

Michael Fraser, national director of UFCW Canada, said Loblaw threatened to open non-unionized stores under the Real Canadian Superstore banners if the UFCW didn't agree to the contract cutbacks.

The alternative for union members could have been losing their jobs entirely, Mr. Fraser said in a recent interview.

"Loblaw is being somewhat forward thinking," Mr. Fraser said. "They realize Wal-Mart is probably going to come into Canada in a big way with Sam's Club. Loblaw is the only employer in Canada that's prepared to try to compete with them on the same basis ..... If we had sat back and done nothing ..... eventually we would be watching a lot of our members be put out of work by non-union competition."

But even The New York Times has weighed in about the potential dangers of what it called in an editorial last week "the Wal-Martization of America."

" Wal-Mart likes to wrap itself in American values," it wrote. "It should be reminded that one of those is paying workers enough to give their families a decent life."


24 November 2003 - The Associated Press
South Florida Sun-Sentinel


Lawyers are asking a judge to decide whether as many as 230,000 Floridians can sue Wal-Mart Stores Inc. in a class action lawsuit that alleges the world's biggest retailer doesn't pay low-level employees for extra work.

A former night shift manager in the Panama City Beach Wal-Mart Supercenter and several former employees of Chipley Wal-Mart sued the company in 2001. They said they were forced to work through breaks, skip meals and return to unfinished tasks after they had clocked out.

They want to include all the hourly workers Wal-Mart has employed in Florida since 1997 in a class action suit -- a type of suit that combines the complaints of people with similar claims and damages against the same company. Wal-Mart said that would include 232,358 people.

Circuit Court Judge Glenn Hess will determine whether the arguments meet the legal criteria of class action suits. If he allows the suit to continue, it could open the door for greater claims against Wal-Mart, and possibly punitive damages. If he rejects the request, each employee could file individually, probably in small claims court.

Requests to file similar lawsuits in other states have met mixed success. Minnesota and Indiana allowed class action lawsuits. Seven other states -- California, Georgia, Louisiana, Michigan, Ohio, Oregon and Texas -- did not.

The attorney for Farris Cobb, the former night shift manager, said Wal-Mart files show the company understaffs its stores, pressures managers to overwork employees and strictly prohibits overtime. The attorney, Russell Lloyd, said the company pressures managers to keep wages at 8 percent of each store's sales totals. Competitors allow wages to reach 15 percent to 16 percent of sales, he said.

Lloyd says Wal-Mart provides incentives for the managers to reach these goals, including bonuses that are higher than managers' $50,000 base salary.

Lloyd said Florida employees lost 900,000 hours of pay because of these practices in one year.

Wal-Mart attorneys Bradley Johnson and Weyman Johnson said there are too many different allegations to make this case a class action lawsuit and argued most of the plaintiffs signed onto the suit only after seeing a law firm's advertisement.

They said many of the plaintiffs acknowledged they were only asked to work through breaks during busy times, and one man admitted the store would probably have paid him for extra work if he had pushed harder.

Wal-Mart versus the workers

By Neil Buckley
November 19 2003 - Financial Times

For Victor Zavala, the American dream ended at 7am on a chilly Thursday last month. As he walked across the car park of the Wal-Mart superstore in Piscataway, New Jersey, where he had spent an overnight shift

scrubbing floors, two police cars and two unmarked cars sped towards him. Within seconds, he was in handcuffs.

Mr Zavala, an illegal immigrant from Mexico, says he had worked for three years cleaning Wal-Mart stores seven nights, or 60 hours, a week, earning about $6 an hour. He got no overtime pay, health insurance or

sick leave; he also paid no taxes or social security. He never got a day off; his request for a week's honeymoon leave in February was denied.

Now facing deportation, Mr Zavala, 28, was employed by a cleaning contractor, not by Wal-Mart. But he is one of nine cleaners suing the world's largest retailer in what they aim to make a class action suit. It alleges Wal-Mart knew the workers were illegal and violated federal racketeering laws by conspiring with cleaning contractors to pay them low wages.

The nine are among 250 illegal workers arrested in raids on October 23 outside 61 Wal-Mart stores in 21 states, in one of the biggest operations of its kind. Immigration officers also searched a mid-level

manager's office at Wal-Mart's Bentonville, Arkansas, headquarters, taking boxes of documents. Wal-Mart has since confirmed that a federal grand jury is determining whether it should be charged with knowingly employing contractors who were using illegal workers.

"This is a case of the strongest company in the world preying on the most vulnerable poor people," says James Linsey, a lawyer representing

the nine illegal workers. "What is heartening is that the federal authorities are not just picking on the littlest of the little, but have sent Wal-Mart a letter saying they are the target of a criminal investigation. This is very serious stuff."

Wal-Mart says it has no evidence that employees at any level knew illegal workers were being employed, and is co-operating fully with investigators.

"We are as eager as anyone to see what evidence federal officials might have," says Mona Williams, vice- president of communications. "If anyone

at Wal-Mart has broken a law, we want to know who it is, and we will make sure that the person will no longer work for our company."

But the immigrant worker case is throwing an uncomfortable spotlight on to the employment practices of what is the world's largest company by

revenues - with 1.4m employees, $245bn sales and $8bn net profits last year - and is arguably the most powerful.

Coupled with three dozen lawsuits alleging that Wal-Mart forced employees to work unpaid overtime, it raises questions over whether the retailer's relentless drive to cut costs is causing it to stray too close to the boundary of legality.

On top of that, a strike by 70,000 supermarket workers in southern California over their employers' plans to slash healthcare benefits - to compete with cut-price Wal-Mart - has provoked a debate over the

so-called "race to the bottom". The US is already jumpy about domestic industry being undercut by cheap labour overseas. Now many fear that

Wal-Mart's low pay and benefits are undermining efforts by competitors and suppliers to pay their workers a decent wage.

Wal-Mart's size and power make it a magnet for criticism. It has long been accused of destroying Main Street USA by shutting down "mom-and-pop" stores, and driving manufacturing jobs abroad by

aggressively screwing down suppliers' prices and costs. That has not deterred the estimated 138m shoppers who visit its giant stores each week. But for a company whose business model relies, in part, on a

plentiful supply of willing, non-union labour, controversy over its employment standards touches a nerve.

Gary Balter, retail analyst at UBS Warburg in New York, says Wal-Mart is a "very honourable company". But he warns that many powerful businesses

eventually run into an issue that threatens to hold back their progress. With Microsoft, it was regulation. Could labour issues become the kind

of thorn in the side for Wal-Mart that antitrust probes became for Microsoft?

"It is very hard to regulate a company because they are giving you low prices," he says. "But there may be someone looking for the one thing they did wrong, so that they can use that, for example, to force them to let more unions in.

"In the public relations battle, you have Wal-Mart on one side saying we want to cut prices for consumers. And on the other side you have more and more people saying Wal-Mart is hurting the fabric of America."

Wal-Mart's spartan "home office", in a converted warehouse in rural Arkansas, presents an image of thrift and propriety. Employees are reluctant even to let visitors buy them a coffee, so strong is the policy against accepting gifts. And vendors trying to persuade Wal-Mart to carry their products meet buyers in bare rooms with signs proclaiming that Wal-Mart will not accept bribes.

The company admits its workers' basic pay is less than that of rivals, but it insists respect for its workers - studiously referred to as "associates" - is central to its philosophy. Employees carry cards bearing the three core values of Sam Walton, the company's founder. Number one is "respect for the individual".

Lee Scott, chief executive, says he is committed to preserving the folksy culture of "Mr Sam", who died in 1992. Mr Walton, he recalls, said there were only two people to whom he would never give a second

chance: "anyone who stole, or managers who abused their people".

The challenge Wal-Mart faces is to preserve Mr Sam's culture as it grows to 2m or even 3m employees, and - with 4,700 stores worldwide already, two-thirds of them in the US - to ensure that managers always meet the standards head office demands.

A rash of lawsuits against the company allege there have been abuses. The latest is from the immigrant workers but Wal-Mart says 240 of the 250 workers detained last month were employed by third-party contractors for which it cannot be held responsible.

However, federal officials confirm that they have recorded conversations indicating that Wal-Mart employees knew illegal workers were being used.

Mr Zavala, the Mexican immigrant, and his lawyers say it would have been hard for Wal-Mart staff, at least at store level, not to know. Cleaners, they say, were supervised by Wal-Mart assistant store managers.

"Whoever was in charge of making these contracts with contractors knew what they were doing," adds Gilberto Garcia, a lawyer representing the illegal workers. "The people negotiating had to know that there was a reason why one [bid] was cheaper than another."

Wal-Mart's Ms Williams says the company cannot be expected to check every worker's papers at hundreds of outside providers of services and

products. She adds that the immigrant workers' lawsuit is baseless, and Wal-Mart will move to dismiss it.

But, she says: "We are especially concerned about allegations that undocumented workers were not treated properly, that contractors took advantage of [them]. That is wrong. We would never condone such

treatment and we are sorry it happened in our stores."

The immigrant workers' case follows 37 suits pending against the company on a different issue. These allege Wal-Mart tried to cut costs by making

employees work unpaid overtime.

One verdict has already gone against the company. A jury in Oregon last December found a "pattern of practice" at Wal-Mart permitting 400 employees to work overtime without pay between 1994 and 1999. Two similar cases have been granted class action status this month, in Minnesota and California; Wal-Mart is appealing against an earlier class certification in Indiana.

Ms Williams says Wal-Mart's policy - "to pay associates for every minute they work" - is clear. "Any manager who requires or even tolerates

off-the-clock working would be violating company policy and is subject to disciplinary action up to and including termination," she says. "We have had a huge education effort to make sure that all of our managers and hourly associates know that off-the-clock working isn't tolerated. . . We have fired some managers who have been doing this."

A third area in which the company faces a lawsuit - potentially the biggest civil rights class action in US history - is over alleged sex discrimination. The suit, filed by six women in 2001, claims Wal-Mart

systematically denies promotion and equal pay to women. If certified by the federal judge considering the case, it would cover almost 1.6m current and former female employees. The plaintiffs say that while two-thirds of Wal-Mart's hourly employees are female, women fill only a third of store management team jobs and fewer than 15 per cent of top store manager positions. They also say women at all levels earn less than men.

Ms Williams says the case has no merit. She says women are promoted in direct proportion - or better - to the numbers applying for management jobs. Women workers have sometimes been reluctant to apply for senior jobs that would require them to move, or work antisocial hours, and Wal-Mart is working on tackling that.

The retail group has also found itself cited as indirect cause of the strike in southern California by 70,000 workers for the three biggest US supermarket chains. The companies, Kroger, Albertson's and Safeway, say they have to cut healthcare costs and restrain pay increases to compete with Wal-Mart, which plans to open 40 "super-centres" in California. These, unlike older Wal-Mart stores, sell groceries and as well as

non-food goods. The United Food and Commercial Workers Union, the supermarket union, has seized on the issue of health insurance - for which most Americans rely on their employers to pay much of the cost - as a battleground.

It says that while two-thirds of Wal-Mart employees qualify for company health insurance, fewer than half participate, because they cannot afford the high contributions Wal-Mart requires them to make. That

leaves some uninsured or forces either their spouses' employers, or federal government programmes, to provide healthcare for them.

Wal-Mart disputes the figures, saying 78 per cent of its workers are eligible for its healthcare plan and 50 per cent participate. About 40 per cent of its workers, it says, get healthcare through other sources; but this is partly because, for example, they are students or senior citizens.

About 40 per cent of those in its scheme had no health insurance before joining Wal-Mart. "These are people who would have fallen through the cracks or been on the public health rolls," says Ms Williams, noting that the company provides cover to about 500,000 American families.

In the background of all of these issues is a so far unsuccessful four-year campaign by the UFCW to get a toe-hold in Wal-Mart stores (see below).

Wal-Mart says it is not anti-union, but "pro-associate"; it does not believe its workers need unions when it operates an "open-door" policy up to chief executive level, allowing staff to voice complaints to managers. "When it comes to our people, we think we are more effective if we're dealing with you as an individual rather than having to go through some intermediary," says Mr Scott.

Wal-Mart says stores are free to vote to unionise, but none has done so. The UFCW says the reason is that at the first sign of union activity, Wal-Mart dispatches labour relations teams from head office that employ aggressive tactics to persuade workers not to join. The company admits that these teams exist, but only to explain their rights to staff and

use legal means to get the company's views across.

Al Zack, assistant director of strategic programmes at the UFCW, says: "This is all about the fact that the nation's number one employer is setting a lowest common denominator standard - as opposed to the

standard set by General Motors in the past, when it was the number one employer, of setting the bar higher," he says.

Yet however much unions and competitors may attack Wal-Mart, an army of analysts and economists readily defends it. Gary Stibel, chairman of New

England Consulting Group, a marketing management consulting firm, says Wal-Mart is right to be aggressive on costs, and should stand firm against anything that would increase them.

"I've worked with Wal-Mart directly and indirectly for 30 years," he says. "Are they coming close to the boundary [of acceptability]? Yes. Are they stepping over the line? Absolutely not. They are one of the

most ethical companies we work with anywhere," he says. "But the job of the retail industry is to stay close to the boundary, because if you don't somebody else will go round you."

Mr Stibel says the productivity gains Wal-Mart has achieved - he estimates it saved US consumers at least $20bn last year - have given a huge boost to the economy, pushing down prices and creating wealth and jobs.

"In a world where new jobs are not being created every hour, Wal-Mart is creating them every second. I have walked into retail environments where staff are being paid better than those at Wal-Mart and been given much worse service. At Wal-Mart, the service I get is pretty good. People seem to enjoy working there."

An Empire Built on Bargains Remakes the Working World

Wal-Mart is so powerful that it moves the economies of entire countries, bringing profit and pain. The prices can?t be beat, but the wages can.

By Abigail Goldman and Nancy Cleeland

Times Staff Writers

November 23, 2003

LAS VEGAS -- Chastity Ferguson kept watch over four sleepy children late one Friday as she flipped a pack of corn dogs into a cart at her new favorite grocery store: Wal-Mart.

The Wal-Mart Supercenter, a pink stucco box twice as big as a Home Depot, combines a full-scale supermarket with the usual discount mega-store. For the 26-year-old Ferguson, the draw is simple.

"You can't beat the prices," said the hotel cashier, who makes $400 a week. "I come here because it's cheap."

Across town, another mother also is familiar with the Supercenter's low prices. Kelly Gray, the chief breadwinner for five children, lost her job as a Raley's grocery clerk last December after Wal-Mart expanded into the supermarket business here. California-based Raley's closed all 18 of its stores in the area, laying off 1,400 workers.

Gray earned $14.68 an hour with a pension and family health insurance. Wal-Mart grocery workers typically make less than $9 an hour.

"It's like somebody came and broke into your home and took something huge and important away from you," said the 36-year-old. "I was scared. I cried. I shook."

Wal-Mart gives. And Wal-Mart takes away.

From a small-town five-and-dime, Wal-Mart Stores Inc. has grown over 50 years to become the world's largest corporation and a global economic force.

It posted $245 billion in sales in its most recent fiscal year ? nearly twice as much as General Electric Co. and almost eight times as much as Microsoft Corp. It is the nation's largest seller of toys, furniture, jewelry, dog food and scores of other consumer products. It is the largest grocer in the United States.

Wal-Mart's decisions influence wages and working conditions across a wide swath of the world economy, from the shopping centers of Las Vegas to the factories of Honduras and South Asia. Its business is so vital to developing countries that some send emissaries to the corporate headquarters in Bentonville, Ark., almost as if Wal-Mart were a sovereign nation.

The company has prospered by elevating one goal above all others: cutting prices relentlessly. U.S. economists say its tightfistedness has not only boosted its own bottom line, but also helped hold down the inflation rate for the entire country. Consumers reap the benefits every time they push a cart through Wal-Mart's checkout lines.

Yet Wal-Mart's astonishing success exacts a heavy price.

By squeezing suppliers to cut wholesale costs, the company has hastened the flight of U.S. manufacturing jobs overseas. By scouring the globe for the cheapest goods, it has driven factory jobs from one poor nation to another.

Wal-Mart's penny-pinching extends to its own 1.2 million U.S. employees, none of them unionized. By the company's own admission, a full-time worker might not be able to support a family on a Wal-Mart paycheck.

Then there are casualties like Kelly Gray. As Wal-Mart expands rapidly into groceries, it is causing upheaval in yet another corner of the economy. When a Supercenter moves into town, competitors often are wiped out, taking high-paying union jobs with them.

Wal-Mart's plans to enter the grocery business in California early next year have thrown the state's supermarket industry into turmoil. Fearful of Wal-Mart's ability to undercut them on price, the Ralphs, Vons and Albertsons chains have sought concessions from their unionized workers in Southern and Central California, leading to a work stoppage now entering its seventh week.

Half a century ago, the nation's largest and most emulated employer was General Motors Corp. "Today," said Nelson Lichtenstein, a history professor at UC Santa Barbara, "for better or worse, it's Wal-Mart."

GM brought prosperity to factory towns and made American workers the envy of the world. With a high-wage union job, an assembly-line worker could afford a house, a decent car, maybe even a boat by the lake.

There was a bit of truth, Lichtenstein said, to the famous assertion by Charles Wilson, General Motors chief from 1941 to 1953, that what was good for GM was good for the country.

With Wal-Mart, the calculus is considerably more complex.

'We Have Split Brains'

Glenn Miraflor used to chide his wife for shopping at Wal-Mart.

As a member of Ironworkers Local 416, the 50-year-old father of four is well aware of the retailer's anti-union stance. But when the family's credit card debt topped $10,000, Wal-Mart's deals suddenly looked irresistible.

"Where else are you going to find a computer for $498?" he asked, looking for a PC with his wife, Debbie, at the Supercenter on Serene Avenue, far from the glitz of the Las Vegas Strip. "Everyone I work with shops here."

Surveys by the Teamsters and the United Food and Commercial Workers ? the two unions most threatened by Wal-Mart ? show that many of their own members shop at the discounter.

"We have split brains," said Robert Reich, U.S. secretary of Labor under President Clinton and now a professor of economic and social policy at Brandeis University in Waltham, Mass. "Most of the time, the half of our brain that wants the best deal prevails."

The connection may be lost on many, Reich said, but consumers' addiction to low prices is accelerating a shift toward a two-tiered U.S. economy, with a shrinking middle class and a growing pool of low-wage workers.

"Wal-Mart's prices may be lower," he said, "but that's small consolation to a lot of people who end up with less money to spend."

Others insist there is a net benefit whenever consumers can get more for less. "If you have lower real prices, you're saving money," said Arthur Laffer, a key advisor to President Reagan who is now an economic consultant in San Diego. "The prices' falling, in effect, raises the wages of everyone who buys their products."

That's basically the way the Miraflors saw it as they cruised the aisles of the Supercenter ? Wal-Mart Store No. 2593 ? and snapped up deals: Ragu pasta sauce for 89 cents, Aunt Jemima pancake mix for 48 cents, pork shoulder steaks for $1.49 a pound and five cans of Del Monte vegetables for $2.

After making their way through the groceries, the Miraflors turned their attention to the housewares section, stopping in front of a 20-inch box fan. Glenn Miraflor checked the price and made room for it in their cart.

"Ten bucks," he said. "You can't beat that. That's why we come here."

Vendors' Alley

The fan was made 1,700 miles away in Chicago at Lakewood Engineering & Manufacturing Co. A decade ago, the same fan carried a $20 price tag.

But that wasn't low enough for Wal-Mart. So Lakewood owner Carl Krauss cut costs at every turn. He automated production at the red-brick factory built by his grandfather on the city's West Side. Where it once took 22 people to put together a product, it now takes seven. Krauss also badgered his suppliers to knock down their prices for parts.

In 2000, he took the hardest step of all: He opened a factory in Shenzhen, China, where workers earn 25 cents an hour, compared with $13 in Chicago. About 40% of his products now are made in China, including most heaters and desktop fans. The Miraflors' box fan was assembled in Chicago, but its electronic guts were imported.

"My father was dead set against it," Krauss said of the move overseas. "I have the same respect for American workers, but I'm going to do what I have to do to survive."

Survival in an age when consumers are hyper-vigilant about prices means shaving expenses again and again. "Nobody wants to be on the shelf with the same item for $1 more," Krauss said.

All the retailers he supplies ? including Home Depot Inc. and Target Corp. ? drive a hard bargain with manufacturers. But none is as tough as Wal-Mart, Krauss said.

Twice a year, his sales representatives travel to Wal-Mart headquarters to pitch their products. There, competitors sit side by side, waiting to be ushered into one of 60 glass-sided cubicles ? a space some call Vendors' Alley.

Then the haggling begins. "You give them your price," Krauss said. "If they don't like it, they give you theirs."

The suppliers are at a disadvantage. The Wal-Mart buyer can always go out to the waiting room and find someone who will go lower. "Your price is going to be whittled down like you never thought possible," Krauss said.

After moving much of his manufacturing abroad, Krauss doesn't see any way to push costs lower. "If you're doing things legally, you can't," he said.

He may have to find a way.

At the Serene Avenue store, shopper Sarah Saxon, 17, pulled a $40 Lakewood heater off the shelf. She looked it over, then put it back in favor of an AirTech model selling for $34.88. She said it looked better than the Lakewood.

"Besides," she said, "it's cheaper."

Wal-Mart's culture of cheap emanates from Bentonville, a town of 20,000 tucked into the low green hills of northwest Arkansas, where a young Sam Walton opened his first five-and-dime in 1950. Even then, Walton had a vision of a different kind of retail.

Rather than charging a little less than his competitors, Walton wanted to slash prices as much as he could and still make a profit. Other stores would use price breaks from manufacturers as a way to boost their bottom lines, paying less at wholesale while leaving retail prices untouched.

Walton passed such savings on to his customers as his discount business evolved into Wal-Mart stores in 1962. He figured he would make up the difference in volume. He was right.

By the mid-1980s, Wal-Mart's success had catapulted Walton to No. 1 on the Forbes list of richest Americans. Still, he drove an old pickup truck to haul around his bird dogs, refused to fly first class and shared hotel rooms with colleagues on business trips.

Bentonville, like the man who put it on the map, is a combination of Southern charm and Midwestern practicality. The town square is anchored by the original Walton's five-and-dime (now a visitors' center) and dotted with small shops. But the real action is down Business Route 71, where the Wal-Mart Supercenter rises up, big enough to fit three 747s with room to spare.

Across the street is the base of Wal-Mart operations: the Home Office. The world's biggest company occupies an industrial-looking hodgepodge of windowless work spaces, connected by bunker-like hallways. The drab gray-and-blue walls display the visage and sayings of Sam Walton, who died in 1992:

"Listen to your associates.... They're the best idea generators."

"To succeed, stay out in front of change."

"Swim upstream. Go the other way. Ignore the conventional wisdom."

Lists abound. The best-performing stores. The worst-performing stores. Under a picture of the founder asking, "Who's taking your customers?" is a roster of competing retailers, including Costco Wholesale Corp., Circuit City Stores Inc. and Target, with the name and picture of each company's chief executive.

It's all part of the Wal-Mart culture: a zealous attention to competition, customers and costs.

Wal-Mart employees, unlike their counterparts at other retailers, are forbidden to accept so much as a soda from vendors ? or anybody else the company does business with ? on the theory that such frills ultimately are paid for by consumers. The company's meticulous management of the flow of goods, from the factory floor to the store shelf, has shaved shipping and inventory costs to a degree that retailing experts say is unprecedented.

"You could argue that some of what Wal-Mart does to cut costs has been win-win," said Richard S. Tedlow, a professor of business administration at Harvard Business School. "What's being squeezed out is waste."

The company is so ruthlessly efficient that 4% of the growth in the U.S. economy's productivity from 1995 to 1999 was due to Wal-Mart alone, researchers at the McKinsey Global Institute estimated last year. No other single company had a measurable impact. Wal-Mart also has forced competitors to become more efficient, driving the nation's productivity ? output per hour of work ? even higher.

Walton, who still is referred to as Mr. Sam throughout the corporation, worked in a ground-floor office barely big enough for a conference table. The current occupant, Chief Executive H. Lee Scott Jr., is the keeper of Mr. Sam's vision. Like all Wal-Mart executives, he empties his own trash and shares budget hotel rooms when traveling. Everyone flies coach.

"We do not have limousines," said Scott, who certainly could afford one, having made nearly $18 million last year in salary, bonus and stock, plus options with an estimated value of $11.3 million. "I drive a Volkswagen Bug."

Wal-Mart's stinginess reaches from the executive suite to the loading dock.

Some truckers complain that they must unload their own cargo ? or pay Wal-Mart to do it. Other big retail chains absorb that cost themselves. "They're awful," said independent driver George Hauschild of Palm Springs. "They don't even let you use the bathroom."

At every one of the 2,966 Wal-Marts in the U.S., thermostats are kept at a steady 73 degrees in summer, 70 degrees in winter; raising or lowering the temperature is considered a waste of money.

Such measures seem mild compared with what Wal-Mart has done to cut payroll costs. In one case, a jury in Oregon last year found that company managers had coerced hundreds of employees to work overtime without pay.

The managers were driven by intense pressure from Bentonville, witnesses said. Managers whose labor costs were considered too high were singled out during the company's weekly in-house satellite broadcasts. In response, managers tampered with electronic time cards or bullied employees to work off the clock, according to trial testimony.

The Oregon jury found last December that Wal-Mart's behavior was illegal and willful. A separate trial to determine damages for the 290 plaintiffs is set for early next year.

Wal-Mart settled similar overtime suits in Colorado and New Mexico for undisclosed amounts. More than 40 other cases are awaiting trial.

The company says it prohibits off-the-clock work and blames the problems on a small number of rogue managers.

Last month, Wal-Mart ran into trouble because of another cost-cutting practice: using dirt-cheap janitorial services.

A grand jury is investigating whether Wal-Mart knew that janitors provided by subcontractors were illegal immigrants cheated out of overtime pay. Federal agents raided 61 Wal-Marts across the country and seized boxes of documents from the Bentonville headquarters. Wal-Mart has denied wrongdoing.

Scott, the CEO, lauded Wal-Mart's employment record. Even in tight labor markets, he said, the company never has trouble finding workers.

"It is not forced labor," he said. "The truth is, I go to the stores and shake hands with the associates, and they like working at Wal-Mart."

On the Fast Track

Aaron Rios liked working at Wal-Mart so much that he decided to make his career there.

Like two-thirds of Wal-Mart's store managers, Rios started off as an hourly worker ? in his case, stocking shoes on the graveyard shift at the Wal-Mart in his hometown of Hanford in the San Joaquin Valley.

After two years, Rios was recommended for management training ? the company's fast track ? leading him to quit community college and pursue a climb through the Wal-Mart ranks.

"There's just something about a Wal-Mart environment," said Rios, who became manager of the Serene Avenue Supercenter in Las Vegas at age 26. "It changed who I am, where I was going and what my career goals were."

Wal-Mart store managers earn about $95,000 annually, including bonuses, according to the company. Supercenter managers earn $130,000.

A management position requires long hours ? as many as 80 a week ? and, often, a willingness to relocate. Rios worked at six California Wal-Mart stores before taking the helm at Serene Avenue.

"It doesn't come free," said Rios, a divorced father who shares custody of his 2-year-old son.

Still, he said, the benefits outweigh the sacrifices.

"I have an open opportunity. I could go into real estate for Wal-Mart. I could do systems, analysis, accounting. It's endless," Rios said. "If I wanted to go to Germany or Japan or Brazil or any of the markets we have, I believe I could go."

A few weeks later, Rios snared another promotion, moving back to California as a district manager in the Antelope Valley, overseeing seven stores from Barstow to Palmdale.

Larry Allen had his own dreams of climbing the Wal-Mart ladder.

In the fall of 2001, he and his wife, Jacque, left Portland, Ore., where the economy was sputtering, and headed to Las Vegas. He was an executive chef and she worked in catering. They looked forward to a fresh start in unionized casino jobs, making more than $15 an hour, with health insurance and pensions.

But their timing was lousy. Recession and terrorism were hitting the gaming industry hard, and work of any kind was scarce.

Just before their money ran out, the Allens lowered their expectations and took jobs at the Serene Avenue Wal-Mart. Jacque, then 43, worked the counter at the in-store restaurant, Radio Grill. Larry, 46, stocked produce. They each earned $8 an hour.

Despite the letdown, Larry Allen said he attacked the job with enthusiasm. Inspired by tales of well-paid Wal-Mart managers who had started out as hourly employees, such as his manager Aaron Rios, he figured on working his way up. That was Sam's way, he said.

"I've been following Sam Walton since the 1970s," he said. "He's the American dream."

The glow faded quickly. At his 90-day review, Allen said, he received an unenthusiastic write-up and an hourly raise of 35 cents. His supervisor told him that if he continued working hard, in two years he might make his way up to $10 an hour.

Allen thinks he knows why he received such mediocre marks. For one thing, he was prone to question company policy. Then, Allen committed the ultimate act of disloyalty: He openly promoted unionization.

West Coast Ambitions

For decades, Wal-Mart has tantalized and frustrated union organizers. But the company's move into the grocery business ? a labor stronghold ? has raised the stakes dramatically.

Union organizers say the high wages and benefits of their members are at risk, as Wal-Mart expands its Supercenters beyond the South and Midwest. The company recently established a beachhead in Las Vegas, with five centers.

Next stop: California, where Wal-Mart plans to open 40 Supercenters starting early next year. In a sense, it has already arrived. Wal-Mart's low wages are a central factor in the labor dispute between California's three major supermarket chains and the United Food and Commercial Workers.

"They are the third party now that comes to every bargaining situation," said Mike Leonard, director of strategic programs for the UFCW.

Over many years of hard negotiating, the union has won and maintained premier contracts for its 800,000 grocery workers. But with the opening of each new Supercenter, the union's clout erodes.

Every one of the giant stores sucks away about 200 UFCW jobs, said retail consultant Burt P. Flickinger III, who runs Strategic Resource Group in New York. That means less power at the bargaining table and less money to hire organizers.

On average, Flickinger says, Wal-Mart's wage-and-benefit package is about $10 an hour less than those offered by unionized supermarkets.

For shoppers, that makes a big difference. A cartful of groceries is 17% to 39% cheaper at a Wal-Mart Supercenter than at a unionized supermarket, according to a survey last year in Las Vegas, Dallas and Tampa, Fla., by investment bank UBS Warburg.

Wal-Mart's move into groceries has led 25 regional supermarket chains around the nation to close or file for bankruptcy protection, eliminating 12,000 mostly union jobs, Flickinger said.

With this in mind, Safeway Inc. recently aired a videotaped message to employees, whose contract in Las Vegas expires next fall.

"Wal-Mart wants our customers and your jobs," said Safeway executive Larree Renda. Total wage and benefit costs represent 15% of sales at Safeway, Renda said. At Wal-Mart, they account for 9%.

"If we don't change," Renda said, "you bet we'll lose jobs ? and it will be in the thousands."

Staying Unorganized

From their first day on the job, Wal-Mart employees are advised to avoid unions and to report any organizing activities to their supervisors.

"If a union got in here, every benefit we've got could go on the negotiating table, every one of them," says a man identified as Russell, a veteran employee, in a video shown to new hires. "Unions will negotiate just about anything to get the right to have dues deducted out of paychecks. You see, they need big money to pay union bigwigs and their lawyers."

Company policy prohibits any union talk in work areas, and organizers say they routinely are asked to leave stores. The retailer sought, and last year received, a court order keeping organizers out of all of its stores in Arkansas. The state Supreme Court nullified the order in July.

At the first hint of union activity, Wal-Mart managers are supposed to call a hotline, usually prompting a team visit from Bentonville.

Wal-Mart spokeswoman Mona Williams said the intervention was meant to help store managers respond effectively and legally.

"Our philosophy is that only an unhappy associate would be interested in joining a union," she said, "so that's why Wal-Mart does everything it can to make sure that we are providing our associates what they want and need."

But dozens of times in the last four years, attorneys for the National Labor Relations Board have claimed that the company infringed on the supermarket union's legal right to organize.

Although some of those claims have been thrown out, others have been upheld by administrative law judges, who have ruled that Wal-Mart illegally influenced employees with offers of raises, promotions and improved working conditions just before they were to vote on whether to join a union.

Judges also have found that Wal-Mart illegally implied that workers could lose benefits such as insurance and profit sharing if they unionized.

What's more, managers illegally confiscated union literature, threatened to close down a store if workers voted to join the union, fired several union supporters and failed to promote others, according to rulings from Minnesota to Florida.

Stymied in their previous attempts to organize Wal-Mart workers, UFCW leaders adopted a new strategy in 2000. They decided to marshal their resources for a concerted organizing effort in one place: Las Vegas.

The union reached out to workers with a Web site and a weekly radio talk show, and posted organizers outside Wal-Mart stores at all hours. When they could, UFCW members would leave union literature inside stores, hoping that workers would see it before managers ordered the material thrown away.

Larry Allen got his first glimpse at a union pamphlet last year as he carried it to the garbage at the Serene Avenue Supercenter. He was hooked, and began advocating for an election to bring in the union.

"Somebody has got to step up and fight for what is right," Allen said.

Ripple Effect

Less than a mile away from the Serene Avenue store, another shopping center stands deserted, in desperate need of an anchor.

A year ago, the Raley's grocery store here drew thousands of shoppers who spilled out to neighboring businesses, buying flowers, mailing packages, getting their nails done. Today, the store is gone. The remaining shops are struggling.

"I'm probably down 45%," said Bonnie Neisius, who owns a UPS Store franchise in the center. "I just don't get the foot traffic anymore."

A few doors away, Windmill Flowers owner Diana I. Murphy leaned on a table where she would have been arranging bouquets ? had there been customers.

"There are a couple of things in play," Murphy said. "The recession, terrorism. And Wal-Mart. It's had a direct effect on me, because they sell flowers, too.... They even deliver."

Unlike small towns with boarded-up commercial centers, fast-growing Vegas quickly loses track of its Wal-Mart victims.

Wal-Mart's costs to the community tend to show up in subtler ways.

In an informal survey in the late 1990s of people who used Las Vegas emergency rooms for routine medical care, patients who said they were employed but uninsured were asked where they worked.

"Wal-Mart came up more than any other," said Dr. Raj Chanderraj, a Las Vegas cardiologist and chairman of the Clark County Health Care Access Consortium, a group that works to provide medical services to the uninsured.

The reason, say critics: Because Wal-Mart pays such low wages, many employees can't afford the health insurance the company offers. And those who do have health coverage through the company often can't afford deductibles that run as high as $3,000 a year.

"Their employees are ending up at the county hospital and become the burden of the county," said Clark County Manager Thom Reilly.

Wal-Mart disputes that. Williams, the company spokeswoman, said that 48% of employees are covered by Wal-Mart's health insurance plan. Among those who aren't, 26% have coverage from another source such as a spouse's employer or Medicare, Williams said.

The notion that Wal-Mart doesn't provide adequate health coverage is "just rhetoric," she said. "It's simply not true."

According to the Employee Benefit Research Institute in Washington, nearly 44% of workers in the retail sector as a whole have employer-provided health coverage. Among big companies in all industries, the figure is 66%.

Those who accuse Wal-Mart of shortchanging its employees, Williams suggested, don't understand the modern service economy. "Retail and service wages are what they are," she said, "whether you look at a department store, a discount store, the local dry cleaners, the bakery or whatever.

"Wal-Mart is a great match for a lot of people," Williams added. "But if you are the sole provider for your family and do not have the time or the skills to move up the ladder, then maybe it's not the right place for you."

'I Still Believe in Wal-Mart'

Larry Allen spent about a year advocating for the supermarket union while working at Wal-Mart.

In the parking lot and in the break room, he passed out fliers and talked up the benefits of unionizing. But he and his fellow union backers didn't get as far as they hoped. About 42% of workers in the grocery department at Serene Avenue signed UFCW cards ? not enough for the union to feel confident about winning an election.

In August, Allen was fired. NLRB attorneys said it was because of his union activities and filed a complaint against Wal-Mart, seeking his reinstatement.

On a recent afternoon outside the Supercenter, dozens of union members rallied to support Allen. "Larry, Larry, Larry," they chanted. Over at the store entrance, the demonstration was a muffled, distant bit of noise. Store managers watched on a screen as surveillance cameras scanned the crowd.

Asked about the commotion, a gray-haired Wal-Mart greeter named Robert just smiled. "They want to make the store union," he said. "But that would make the prices go up for our customers. We can't let that happen."

On some level, even Larry Allen understands. "I still believe in Wal-Mart," said Allen, who now is on the union payroll as an organizer. "I like the idea of it ? give a quality product at a low price. It's what the American public wants."


Overseas, Wal-Mart's low-cost suppliers feel the heat.

Wal-Mart, county at odds

Letters To The Editor
Silicon Valley Business Times

Published: Friday, November 14, 2003

As a proud resident of Contra Costa County, I am deeply concerned about the effort by Wal-Mart to muscle their way into our county on their terms.

The Contra Costa County Board of Supervisors recently voted unanimously to welcome Wal-Mart to operate on county lands, provided they would operate within certain parameters. The board sought to address several concerns, particularly the negative impact new mega centers will have on traffic.

Given our already-stretched freeways and roads, new mega centers on county lands that do not have the infrastructure to support new traffic could significantly worsen the gridlock.

But, rather than respecting our tradition of locally controlling our own growth, Wal-Mart instead mobilized their limitless financial resources to force a 2004 ballot measure to overturn the ordinance. (Editor's note: To re-affirm the board's original ordinance, voters must vote "yes" on the measure. So, in other words, a "yes" vote on the measure is a vote against Wal-Mart. See full story, Biz Ink, Nov. 7.)

We must not yield to outside interests who are far more concerned with extracting profits from our community than adding value to it.

Contra Costa County is a special place to live because it has been managed by local business, community and elected leaders who care about it. Please reaffirm that tradition and support the ballot measure in March 2004. 

Kish Rajan

Wal-Mart: Cruising for a Bruising?

November 14, 2003 - BusinessWeek Online


By Amy Tsao

The day may be coming when the retailing giant is a magnet for lawsuits and probers. Dubious? Ponder the Microsoft precedent

In recent weeks, the world's biggest discounter has shown up as a fatter target on the radars of those who would shoot it down. In late October, federal officers raided Wal-Mart (WMT ) and accused it of using cleaning contractors that it knew hired illegal immigrants. Based on those allegations, lawyers for some of the immigrants have filed a class action, contending that Wal-Mart conspired to avoid paying overtime. Weeks later, independent gas-station owners accused it of predatory competition by cutting prices so low that smaller operations are driven out of business.

So far, Wall Street has hardly batted an eye. Neither dispute affects Wal-Mart "in the overall scheme of things," Blaylock & Partners analyst Mark Mandel noted a few days before the discounter released its third-quarter results.

Analysts still expect Wal-Mart's sales and profits to rise at a double-digit pace year-in and year-out, as it opens new stores (many of them huge superstores) at a rate of more than one a day and racks up greater market share in toys, groceries, apparel, and jewelry. Ever with an eye for new opportunities, Wal-Mart may even embrace online businesses such as music. Its stock is up 10% this year, to $55.62 on Nov. 13.

POINTING THE FINGER. As Wal-Mart's power grows, some analysts are starting to wonder: What if allegations and lawsuits against it proliferate? What if its growing control over suppliers turns them into subjects that survive only at the discount king's whim?

Outfits like Safeway (SWY ) and Albertson's (ABS ) in groceries, Toys 'R' Us (TOY ), and lower-end department stores have started to blame disappointing financial results on Wal-Mart's competition. What if they were to fall victim to the giant's steady expansion?

If these complaints continue to build, might they transform the behemoth of Bentonville, Ark., into the discount equivalent of that other colossus, the one in Redmond, Wash.? If it isn't careful, Wal-Mart could take Microsoft's (MSFT ) place as both the target of endless government probes and a symbol of heavyhanded corporate practices (see BW, 10/6/03, "Is Wal-Mart Too Powerful?").

"NEGATIVE PUBLICITY." If that happens, it would affect investors' thinking about Wal-Mart -- just as government probes dulled Microsoft's shine. Dominant companies in major industries often become targets by virtue of their mere preeminence, says John Zielinski, portfolio manager at Neuberger Berman Century Fund in Chicago, who adds: "Investors always have to gauge that risk and how much is reflected in the stock."

Certainly, that issue is on analysts' minds in the wake of Wal-Mart's third-quarter report, released Nov. 13. The 13% increase in profits for the period was below Wall Street's forecast, with the company saying this might be due to customers concentrating on its lowest-price goods.

"Recent negative publicity is not likely to help what we view as deteriorating appearances at many Wal-Mart stores and may gradually impact the [price-earnings] multiple," wrote Gary Balter, an analyst at UBS, in reaction to the earnings report. Wal-Mart's stock fell 4% on Nov. 13, even though it expects to earn $2.03 to $2.05 a share for all of 2003 -- in sync with the $2.05 analysts expect.

WHOLESALE SUITS. Whatever the financial effects might be, it's getting harder for Wal-Mart to project a positive image, analysts say. "It worked very hard to develop a corporate culture and persona in the minds of consumers," says Zielenski, who fears Wal-Mart will suffer a loss of consumer goodwill, despite those attractive prices. Adds Zielinski: "The impact may be small financially, but you shouldn't discount it."

Besides the illegal-immigrants complaint, Wal-Mart faces dozens of suits over alleged wage discrimination, gender bias, and antitrust violations. Most analysts don't anticipate significant increases in the outfit's legal costs, which are a pittance in comparison with annual sales of $245 billion.

"Paying a judgment isn't much [of a cost] from a shareholder standpoint," says Peter Cohan, president of Peter S. Cohan Associates in Marlborough, Mass. Yet he adds: "If they have to raise wages and can't offset that, they could be forced to find cost cuts somewhere else" since one of Wal-Mart's biggest competitive advantages is lower wages.

WHAT IF... Realistically, Wal-Mart would have to get a lot bigger and meaner before it could be charged with violating antitrust laws. Blaylock's Mandel points out that it probably has only about 6% of the $3 trillion taken in by U.S. retailers. And while Microsoft had strong corporate enemies who accused it of antitrust activity -- not to mention a legion of state attorneys general -- Wal-Mart's main detractors are all "small, diffuse, and silent," says Donald Luskin, chief investment officer at research boutique Trend Macrolytics.

Nor does Wal-Mart encounter ill feeling in Europe, where Microsoft is now fighting regulators who argue that the Windows operating system was designed to work better with Microsoft's own network software than that of competitors. Microsoft's stock -- $25 as of Nov. 13 -- hasn't budged this year, even as the Nasdaq composite staged its impressive rally. Analysts speculate that its malaise is probably a combination of tech spending's slow recovery and continuing legal issues.

However, if regulators were to reconsider their current definitions of what constitutes marketplace wrongs by a dominant company, Wal-Mart could end up in the hot seat. Antitrust actions traditionally have focused on monopoly abuse by a seller, says Burt Foer, president of the American Anti-Trust Institute, who argues that Wal-Mart's unprecedented buying power could prompt lawmakers to think about "how to draw lines between legitimate use of size by a buyer, and illegitimate use."

CHINA CHALLENGE. That could mean "mid- and large-size suppliers that are getting raked over the coals and are worried there won't be anyone else to sell to eventually" could coalesce as an opposing force, Foer says -- just as a number of computer outfits banded together against Microsoft. Wal-Mart couldn't be reached for comment.

Both Wal-Mart and Microsoft have contributed on a grand scale to a restructuring of the business environment: Microsoft's technology has boosted efficiency at businesses large and small all over the world, while Wal-Mart has exploited information technology to revolutionize inventory control and other business processes, notes Luskin. But Microsoft is viewed as a key U.S. exporter -- a "good guy" role -- whereas Wal-Mart figures in domestic suppliers' fears that Chinese imports will challenge them on their own doorsteps, adds Luskin.

Despite the image Wal-Mart cultivates as a buy-American company, it's a "major catalyst for bringing in cheap Chinese goods" and, as a byproduct, displacing American workers, says Luskin. "That makes Wal-Mart more vulnerable" to image problems, he adds.

WHAT WINS IN THE END. Of course, Wal-Mart's ultimate weapon against public outrage is a powerful one: rock-bottom prices. As much as consumers might fret over the social, economic, and cultural impacts of Wal-Mart's practices "they still want the cheapest price," says San Francisco-based Tiburon Research analyst Rob Wilson, who adds: "That wins out at the end of the day."

For now, analysts and investors are still focusing on the bright side of the Wal-Mart story. Many of those who patronize the stores adore it. But that was also true of Microsoft -- before it started to swing more weight than any rival could counter.

Fighting mega-center may cost city mega-bucks



November 16, 2003,

If Turlock wants to block Wal-Mart from opening a supercenter, the city should brace itself for a long and costly fight, said a Contra Costa County supervisor battling Wal-Mart over a similar ban.

"They should start raising money," Supervisor John Gioia of Richmond said. "Probably working with busi-nesses that think they might be im-pacted."

The Turlock City Council is considering an ordinance, similar to one Contra Costa County adopted in June, that would prevent discount stores of more than 100,000 square feet from using more than 5 percent of the space for groceries and other nontaxable items.

Wal-Mart, which opened a 125,000-square-foot store on Fulkerth Road in Turlock in 1993, has proposed building a 225,000-square-foot supercenter, which would feature groceries.

The company's relationship with city officials already has deteriorated.

Mayor Curt Andre and City Councilman John Lazar said Wal-Mart's tactics have been "threatening" and "heavy-handed."

Wal-Mart representatives checked political contribution records for elected city officials before meeting with them, Andre and Lazar said.

They also said Wal-Mart officials threatened to do whatever they could to oppose the ordinance, including an initiative drive, a lawsuit or simply moving the supercenter outside the city.

"It alarmed me that Wal-Mart would take the low road before it is even before the council," Andre said.

The mayor said Wal-Mart community relations official Peter Kanelos told him the company would use "any means, legal, political or otherwise" to get the store built.

"I was shocked," Lazar said. "For people who want to do business in the community, instead of coming in friendly, it's 'do it my way or be executed.'"

Kanelos said researching the records of the council members is a normal practice for many companies.

"It's perfectly legitimate and logical for anyone who has an issue before the council to look for potential conflicts of interest," Kanelos said.

As far as being aggressive and heavy-handed, Kanelos noted that the city officials had met with grocery store and union representatives before drafting the ordinance, but not with Wal-Mart.

"The fact that the City Council is even considering an ordinance against a company already doing business in their city without input is disappointing," he said.

Kanelos said he didn't intend to threaten officials when he told them about the possibility of a lawsuit, an initiative or locating the store outside the city limit.

"I wanted to make sure they had all the facts. It's important for them to understand our intentions, so they don't cost the city tax dollars down the road," Kanelos said. "I apologize if they perceive it as a threat."

Wal-Mart challenged the Contra Costa ordinance by hiring a Sacra-mento firm to secure 27,000 signatures to qualify for a referendum overturning the ban. The issue will be on the March ballot.

Amy Hill, community affairs man- ager for Wal-Mart, said the retail giant previously collected signatures for referendums overturning similar bans in Calexico and Inglewood as well as Clark County, Nev.

She said Inglewood and Clark County repealed their ordinances rather than putting referendums on ballots, and Calexico voters overwhelmingly supported Wal-Mart's position.

"We got a 70 percent margin to overturn," she said. "It demonstrates the public is not supportive of these ordinances. They don't want local government telling them where they can shop."

In Contra Cost County, Gioia said he expects Wal-Mart to pull out all stops. "We won't be surprised if they decide to spend over $1 million," he said.

The other side plans to fight back with a direct-mail promotion, Gioia said.

"We're raising money to run a campaign," he said. "We know they will out-spend us, but we need to spend enough to get our message out of sound public policy."

Lazar suggested the Turlock ordinance, and Andre brought it to the council.

As for the Wal-Mart tactics, Lazar commented, "Turlock is growing up. I guess we are not in Kansas anymore."

Kanelos said it is premature to say whether Wal-Mart would challenge Turlock's ordinance, because it is only a proposal, but he is watching it closely.

"I will be up there. This is nothing we're going to ignore or take lightly," Kanelos said. "We will be participating in the process.

Public hearing coming up

WHAT: The Turlock Planning Commission will hold a public hearing on a proposal to limit large discount stores with substantial grocery departments.

WHEN: 7 p.m. Thursday.

WHERE: Turlock City Hall, 156 S. Broadway.

The commission's recommendation will go to the Turlock City Council, which is scheduled to hold a hearing Dec. 9 and could make a decision in January.

The Wal-Martization of America

New York Times Editorial
November 15, 2003
 The 70,000 grocery workers on strike in Southern California are the front line in a battle to prevent middle-class service jobs from turning into poverty-level ones. The supermarkets say they are forced to lower their labor costs to compete with Wal-Mart, a nonunion, low-wage employer aggressively moving into the grocery business. Everyone should be concerned about this fight. It is, at bottom, about the ability of retail workers to earn wages that keep their families out of poverty.

Grocery stores in Southern California are bracing for the arrival, in February, of the first of 40 Wal-Mart grocery supercenters. Wal-Mart's prices are about 14 percent lower than other groceries' because the company is aggressive about squeezing costs, including labor costs. Its workers earn a third less than unionized grocery workers, and pay for much of their health insurance. Wal-Mart uses hardball tactics to ward off unions. Since 1995, the government has issued at least 60 complaints alleging illegal anti-union activities.

Southern California's supermarket chains have reacted by demanding a two-year freeze on current workers' salaries and lower pay for newly hired workers, and they want employees to pay more for health insurance. The union counters that if the supermarkets match Wal-Mart, their workers will be pushed out of the middle class. Those workers are already only a step — or a second family income — from poverty, with wages of roughly $18,000 a year. Wal-Mart sales clerks make about $14,000 a year, below the $15,060 poverty line for a family of three.

Wal-Mart may also be driving down costs by using undocumented immigrants. Last month, federal agents raided Wal-Marts in 21 states. Wal-Mart is facing a grand jury investigation, and a civil racketeering class-action filed by cleaners who say they were underpaid when working for contractors hired by Wal-Mart. Wal-Mart insists that it was unaware of its contractors' practices. But aware or not, it may have helped to deprive legally employable janitors of jobs and adequate pay.

This Wal-Martization of the work force, to which other low-cost, low-pay stores also contribute, threatens to push many Americans into poverty. The first step in countering it is to enforce the law. The government must act more vigorously, and more quickly, when Wal-Mart uses illegal tactics to block union organizing. And Wal-Mart must be made to pay if it exploits undocumented workers.

Unions understand that the quickest way to win this war is to organize Wal-Mart workers. And Wal-Mart's competitors have to strive for Wal-Mart's efficiency without making workers bear the brunt. Consumers can also play a part. Wal-Mart likes to wrap itself in American values. It should be reminded that one of those is paying workers enough to give their families a decent life.

The trouble with Wal-Mart

By Dan K. Thomasson - Scripps Howard News Service

Thursday November 13th

It used to be that what was good for General Motors was good for the nation. At least that's what people said in the old days before the Japanese invasion when the industrial behemoth was running roughshod over the rest of the world's automobile manufacturers.

Now it seems there are those who would apply that slogan to Wal-Mart, the world's largest retailer. But is it an accurate assessment of the Arkansas-based giant's value to the free enterprise system? There are a growing number who would disagree, citing numerous instances where the Wal-Mart way - and the way it built its business - isn't quite the American way. In fact, it frequently appears to be the antithesis of fair competition, deriving its enormous selling power through an injection of questionable practices.

Substantiation of those allegations came recently when it was revealed that Wal-Mart was subcontracting its daily cleaning chores in many of its stores to companies that employed illegal immigrants at low wages and without overtime or benefits and apparently without collecting payroll taxes. Federal agents raided 60 stores in 20 states rounding up more than 250 illegal aliens and the company has been notified that it is the target of a grand jury investigation.

There are serious charges that Wal-Mart executives were aware of the practice, which by all estimations saved the company millions of dollars over what it would have had to pay otherwise. Not to have known is almost incomprehensible for a company that is tightly managed at all levels. One commentator noted that Wal-Mart is not the kind of place where they permit janitors to run around in their stores at night without some company supervision. Some of those janitors now have filed a class action suit against the company charging that it violated federal racketeering charges by conspiring with cleaning contractors to cheat them out of wages.

This is just the latest questionable event in the spectacular life of the late Sam Walton's brainchild. There have been charges of predatory practices almost from the company's humble beginnings, ranging from the sale of goods produced in foreign sweat shops to using its enormous buying power to sell near or below wholesale until its competitors are put out of business to low wages that destroy the prevailing local pay scales. In smaller communities a rule of thumb has been that five local businesses will fail during the first year after a Wal-Mart opens as the under pricing bites off an ever increasing percentage of sales of everything from groceries to drugs to dry goods and, in some areas, even haircuts.

In my hometown of 15,000 to 20,200 residents where there was once a wide array of retail stores, virtually only Wal-Mart and a few grocery outlets survive. For variety one must drive the 25 miles to downtown Indianapolis. Some of the town's retail demise can be blamed on the Interstate highway system that allowed easy access to a large urban area, but not all by any means. When Wal-Mart arrived the remaining vestiges of local retail businesses disappeared overnight. Now Wal-Mart can charge what it wants without fear of competition.

An entire cottage industry has grown up to coach smaller to midsize communities on how to avoid the Wal-Mart menace. Mainly it boils down to advising chambers of commerce to let them in at peril to their own existence, a strategy that obviously hasn't worked well given the company's incredible growth.

There is no better example of the Wal-Mart impact than the current battle being fought by 70,000 unionized grocery workers against three supermarket chains in Southern California over wages that the companies claim are too high in the face of Wal-Mart's plan to open 40 grocery-selling super centers in that part of the state over the next five years. Picketing workers carry signs that proclaim, "Don't Let Us Become Another Wal-Mart." The grocery workers now earn from $7.40 an hour for baggers after 30 months on the job to $17.90 for cashiers. Wal-Mart grocery workers reportedly earn $9 an hour average.

While GM was undoubtedly good for the country in many respects and so is Wal-Mart, which remains a symbol of one man's retail vision of providing ever increasing numbers with one-stop shopping, there also were downsides that caused complaints that General Motors, like Standard Oil of another time, had gotten too big and should be broken up. As it gobbles up more and more of the nation's retail business, Wal-Mart is going to face increasing criticism and with that more and more government attention. It's the American way. Perhaps there is such a thing as too big.

The Wal-Mart You Don't Know

The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?

From: Fast Company Magazine -  Issue 77 December 2003, Page 68

By: Charles Fishman

A gallon-sized jar of whole pickles is something to behold. The jar is the size of a small aquarium. The fat green pickles, floating in swampy juice, look reptilian, their shapes exaggerated by the glass. It weighs 12 pounds, too big to carry with one hand. The gallon jar of pickles is a display of abundance and excess; it is entrancing, and also vaguely unsettling. This is the product that Wal-Mart fell in love with: Vlasic's gallon jar of pickles.

Wal-Mart priced it at $2.97--a year's supply of pickles for less than $3! "They were using it as a 'statement' item," says Pat Hunn, who calls himself the "mad scientist" of Vlasic's gallon jar. "Wal-Mart was putting it before consumers, saying, This represents what Wal-Mart's about. You can buy a stinkin' gallon of pickles for $2.97. And it's the nation's number-one brand."

Therein lies the basic conundrum of doing business with the world's largest retailer. By selling a gallon of kosher dills for less than most grocers sell a quart, Wal-Mart may have provided a ser-vice for its customers. But what did it do for Vlasic? The pickle maker had spent decades convincing customers that they should pay a premium for its brand. Now Wal-Mart was practically giving them away. And the fevered buying spree that resulted distorted every aspect of Vlasic's operations, from farm field to factory to financial statement.

Indeed, as Vlasic discovered, the real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us "every day low prices." It's the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole. That story can be found floating in a gallon jar of pickles at Wal-Mart.

Wal-Mart is not just the world's largest retailer. It's the world's largest company--bigger than ExxonMobil, General Motors, and General Electric. The scale can be hard to absorb. Wal-Mart sold $244.5 billion worth of goods last year. It sells in three months what

number-two retailer Home Depot sells in a year. And in its own category of general merchandise and groceries, Wal-Mart no longer has any real rivals. It does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined. "Clearly," says Edward Fox, head of Southern Methodist University's J.C. Penney Center for Retailing Excellence, "Wal-Mart is more powerful than any retailer has ever been." It is, in fact, so big and so furtively powerful as to have become an entirely different order of corporate being.

Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that don't change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.

Of course, U.S. companies have been moving jobs offshore for decades, long before Wal-Mart was a retailing power. But there is no question that the chain is helping accelerate the loss of American jobs to low-wage countries such as China. Wal-Mart, which in the late 1980s and early 1990s trumpeted its claim to "Buy American," has doubled its imports from China in the past five years alone, buying some $12 billion in merchandise in 2002. That's nearly 10% of all Chinese exports to the United States.

One way to think of Wal-Mart is as a vast pipeline that gives non-U.S. companies direct access to the American market. "One of the things that limits or slows the growth of imports is the cost of establishing connections and networks," says Paul Krugman, the Princeton University economist. "Wal-Mart is so big and so centralized that it can all at once hook Chinese and other suppliers into its digital system. So--wham!--you have a large switch to overseas sourcing in a period quicker than under the old rules of retailing."

Steve Dobbins has been bearing the brunt of that switch. He's president and CEO of Carolina Mills, a 75-year-old North Carolina company that supplies thread, yarn, and textile finishing to apparel makers--half of which supply Wal-Mart. Carolina Mills grew steadily until 2000. But in the past three years, as its customers have gone either overseas or out of business, it has shrunk from 17 factories to 7, and from 2,600 employees to 1,200. Dobbins's customers have begun to face imported clothing sold so cheaply to Wal-Mart that they could not compete even if they paid their workers nothing.

"People ask, 'How can it be bad for things to come into the U.S. cheaply? How can it be bad to have a bargain at Wal-Mart?' Sure, it's held inflation down, and it's great to have bargains," says Dobbins. "But you can't buy anything if you're not employed. We are shopping ourselves out of jobs."

The gallon jar of pickles at Wal-Mart became a devastating success, giving Vlasic strong sales and growth numbers--but slashing its profits by millions of dollars.

There is no question that Wal-Mart's relentless drive to squeeze out costs has benefited consumers. The giant retailer is at least partly responsible for the low rate of U.S. inflation, and a McKinsey & Co. study concluded that about 12% of the economy's productivity gains in the second half of the 1990s could be traced to Wal-Mart alone.

There is also no question that doing business with Wal-Mart can give a supplier a fast, heady jolt of sales and market share. But that fix can come with long-term consequences for the health of a brand and a business. Vlasic, for example, wasn't looking to build its brand on a gallon of whole pickles. Pickle companies make money on "the cut," slicing cucumbers into spears and hamburger chips. "Cucumbers in the jar, you don't make a whole lot of money there," says Steve Young, a former vice president of grocery marketing for pickles at Vlasic, who has since left the company.

At some point in the late 1990s, a Wal-Mart buyer saw Vlasic's gallon jar and started talking to Pat Hunn about it. Hunn, who has also since left Vlasic, was then head of Vlasic's Wal-Mart sales team, based in Dallas. The gallon intrigued the buyer. In sales tests, priced somewhere over $3, "the gallon sold like crazy," says Hunn, "surprising us all." The Wal-Mart buyer had a brainstorm: What would happen to the gallon if they offered it nationwide and got it below $3? Hunn was skeptical, but his job was to look for ways to sell pickles at Wal-Mart. Why not?

And so Vlasic's gallon jar of pickles went into every Wal-Mart, some 3,000 stores, at $2.97, a price so low that Vlasic and Wal-Mart were making only a penny or two on a jar, if that. It was showcased on big pallets near the front of stores. It was an abundance of abundance. "It was selling 80 jars a week, on average, in every store," says Young. Doesn't sound like much, until you do the math: That's 240,000 gallons of pickles, just in gallon jars, just at Wal-Mart, every week. Whole fields of cucumbers were heading out the door.

For Vlasic, the gallon jar of pickles became what might be called a devastating success. "Quickly, it started cannibalizing our non-Wal-Mart business," says Young. "We saw consumers who used to buy the spears and the chips in supermarkets buying the Wal-Mart gallons. They'd eat a quarter of a jar and throw the thing away when they got moldy. A family can't eat them fast enough."

The gallon jar reshaped Vlasic's pickle business: It chewed up the profit margin of the business with Wal-Mart, and of pickles generally. Procurement had to scramble to find enough pickles to fill the gallons, but the volume gave Vlasic strong sales numbers, strong growth numbers, and a powerful place in the world of pickles at Wal-Mart. Which accounted for 30% of Vlasic's business. But the company's profits from pickles had shriveled 25% or more, Young says--millions of dollars.

The gallon was hoisting Vlasic and hurting it at the same time.

Young remembers begging Wal-Mart for relief. "They said, 'No way,' " says Young. "We said we'll increase the price"--even $3.49 would have helped tremendously--"and they said, 'If you do that, all the other products of yours we buy, we'll stop buying.' It was a clear threat." Hunn recalls things a little differently, if just as ominously: "They said, 'We want the $2.97 gallon of pickles. If you don't do it, we'll see if someone else might.' I knew our competitors were saying to Wal-Mart, 'We'll do the $2.97 gallons if you give us your other business.' " Wal-Mart's business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.

Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart guy's response was classic," Young recalls. "He said, 'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' " Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy--although the gallon jar of pickles, everyone agrees, wasn't a critical factor.

By now, it is accepted wisdom that Wal-Mart makes the companies it does business with more efficient and focused, leaner and faster. Wal-Mart itself is known for continuous improvement in its ability to handle, move, and track merchandise. It expects the same of its suppliers. But the ability to operate at peak efficiency only gets you in the door at Wal-Mart. Then the real demands start. The public image Wal-Mart projects may be as cheery as its yellow smiley-face mascot, but there is nothing genial about the process by which Wal-Mart gets its suppliers to provide tires and contact lenses, guns and underarm deodorant at every day low prices. Wal-Mart is legendary for forcing its suppliers to redesign everything from their packaging to their computer systems. It is also legendary for quite straightforwardly telling them what it will pay for their goods.

"We are one of Wal-Mart's biggest suppliers, and they are our biggest customer, by far. We have a great relationship. That's all I can say. Are we done now?"

John Fitzgerald, a former vice president of Nabisco, remembers Wal-Mart's reaction to his company's plan to offer a 25-cent newspaper coupon for a large bag of Lifesavers in advance of Halloween. Wal-Mart told Nabisco to add up what it would spend on the promotion--for the newspaper ads, the coupons, and handling--and then just take that amount off the price instead. "That isn't necessarily good for the manufacturer," Fitzgerald says. "They need things that draw attention."

It also is not unheard of for Wal-Mart to demand to examine the private financial records of a supplier, and to insist that its margins are too high and must be cut. And the smaller the supplier, one academic study shows, the greater the likelihood that it will be forced into damaging concessions. Melissa Berryhill, a Wal-Mart spokeswoman, disagrees: "The fact is Wal-Mart, perhaps like no other retailer, seeks to establish collaborative and mutually beneficial relationships with our suppliers."

For many suppliers, though, the only thing worse than doing business with Wal-Mart may be not doing business with Wal-Mart. Last year, 7.5 cents of every dollar spent in any store in the United States (other than auto-parts stores) went to the retailer. That means a contract with Wal-Mart can be critical even for the largest consumer-goods companies. Dial Corp., for example, does 28% of its business with Wal-Mart. If Dial lost that one account, it would have to double its sales to its next nine customers just to stay even. "Wal-Mart is the essential retailer, in a way no other retailer is," says Gib Carey, a partner at Bain & Co., who is leading a yearlong study of how to do business with Wal-Mart. "Our clients cannot grow without finding a way to be successful with Wal-Mart."

Many companies and their executives frankly admit that supplying Wal-Mart is like getting into the company version of basic training with an implacable Army drill sergeant. The process may be unpleasant. But there can be some positive results.

"Everyone from the forklift driver on up to me, the CEO, knew we had to deliver [to Wal-Mart] on time. Not 10 minutes late. And not 45 minutes early, either," says Robin Prever, who was CEO of Saratoga Beverage Group from 1992 to 2000, and made private-label water sold at Wal-Mart. "The message came through clearly: You have this 30-second delivery window. Either you're there, or you're out. With a customer like that, it changes your organization. For the better. It wakes everybody up. And all our customers benefited. We changed our whole approach to doing business."

But you won't hear evenhanded stories like that from Wal-Mart, or from its current suppliers. Despite being a publicly traded company, Wal-Mart is intensely private. It declined to talk in detail about its relationships with its suppliers for this story. More strikingly, dozens of companies contacted declined to talk about even the basics of their business with Wal-Mart.

Here, for example, is an executive at Dial: "We are one of Wal-Mart's biggest suppliers, and they are our biggest customer by far. We have a great relationship. That's all I can say. Are we done now?" Goaded a bit, the executive responds with an almost hysterical edge: "Are you meshuga? Why in the world would we talk about Wal-Mart? Ask me about anything else, we'll talk. But not Wal-Mart."

No one wants to end up in what is known among Wal-Mart vendors as the "penalty box"--punished, or even excluded from the store shelves, for saying something that makes Wal-Mart unhappy. (The penalty box is normally reserved for vendors who don't meet performance benchmarks, not for those who talk to the press.)

"You won't hear anything negative from most people," says Paul Kelly, founder of Silvermine Consulting Group, a company that helps businesses work more effectively with retailers. "It would be committing suicide. If Wal-Mart takes something the wrong way, it's like Saddam Hussein. You just don't want to piss them off."

As a result, this story was reported in an unusual way: by speaking with dozens of people who have spent years selling to Wal-Mart, or consulting to companies that sell to Wal-Mart, but who no longer work for companies that do business with Wal-Mart. Unless otherwise noted, the companies involved in the events they described refused even to confirm or deny the basics of the events.

To a person, all those interviewed credit Wal-Mart with a fundamental integrity in its dealings that's unusual in the world of consumer goods, retailing, and groceries. Wal-Mart does not cheat suppliers, it keeps its word, it pays its bills briskly. "They are tough people but very honest; they treat you honestly," says Peter Campanella, who ran the business that sold Corning kitchenware products, both at Corning and then at World Kitchen. "It was a joke to do business with most of their competitors. A fiasco."

But Wal-Mart also clearly does not hesitate to use its power, magnifying the Darwinian forces already at work in modern global capitalism.

Caught in the Wal-Mart squeeze, Huffy didn't just relinquish profits to keep its commitment to the retailer. It handed those profits to the competition.

What does the squeeze look like at Wal-Mart? It is usually thoroughly rational, sometimes devastatingly so.

John Mariotti is a veteran of the consumer-products world--he spent nine years as president of Huffy Bicycle Co., a division of Huffy Corp., and is now chairman of World Kitchen, the company that sells Oxo, Revere, Corning, and Ekco brand housewares.

He could not be clearer on his opinion about Wal-Mart: It's a great company, and a great company to do business with. "Wal-Mart has done more good for America by several thousand orders of magnitude than they've done bad," Mariotti says. "They have raised the bar, and raised the bar for everybody."

Mariotti describes one episode from Huffy's relationship with Wal-Mart. It's a tale he tells to illustrate an admiring point he makes about the retailer. "They demand you do what you say you are going to do." But it's also a classic example of the damned-if-you-do, damned-if-you-don't Wal-Mart squeeze. When Mariotti was at Huffy throughout the 1980s, the company sold a range of bikes to Wal-Mart, 20 or so models, in a spread of prices and profitability. It was a leading manufacturer of bikes in the United States, in places like Ponca City, Oklahoma; Celina, Ohio; and Farmington, Missouri.

One year, Huffy had committed to supply Wal-Mart with an entry-level, thin-margin bike--as many as Wal-Mart needed. Sales of the low-end bike took off. "I woke up May 1"--the heart of the bike production cycle for the summer--"and I needed 900,000 bikes," he says. "My factories could only run 450,000." As it happened, that same year, Huffy's fancier, more-profitable bikes were doing well, too, at Wal-Mart and other places. Huffy found itself in a bind.

With other retailers, perhaps, Mariotti might have sat down, renegotiated, tried to talk his way out of the corner. Not with Wal-Mart. "I made the deal up front with them," he says. "I knew how high was up. I was duty-bound to supply my customer." So he did something extraordinary. To free up production in order to make Wal-Mart's cheap bikes, he gave the designs for four of his higher-end, higher-margin products to rival manufacturers. "I conceded business to my competitors, because I just ran out of capacity," he says. Huffy didn't just relinquish profits to keep Wal-Mart happy--it handed those profits to its competition. "Wal-Mart didn't tell me what to do," Mariotti says. "They didn't have to." The retailer, he adds, "is tough as nails. But they give you a chance to compete. If you can't compete, that's your problem."

In the years since Mariotti left Huffy, the bike maker's relationship with Wal-Mart has been vital (though Huffy Corp. has lost money in three out of the last five years). It is the number-three seller of bikes in the United States. And Wal-Mart is the number-one retailer of bikes. But here's one last statistic about bicycles: Roughly 98% are now imported from places such as China, Mexico, and Taiwan. Huffy made its last bike in the United States in 1999.

As Mariotti says, Wal-Mart is tough as nails. But not every supplier agrees that the toughness is always accompanied by fairness. The Lovable Company was founded in 1926 by the grandfather of Frank Garson II, who was Lovable's last president. It did business with Wal-Mart, Garson says, from the earliest days of founder Sam Walton's first store in Bentonville, Arkansas. Lovable made bras and lingerie, supplying retailers that also included Sears and Victoria's Secret. At one point, it was the sixth-largest maker of intimate apparel in the United States, with 700 employees in this country and another 2,000 at eight factories in Central America.

Eventually Wal-Mart became Lovable's biggest customer. "Wal-Mart has a big pencil," says Garson. "They have such awesome purchasing power that they write their own ticket. If they don't like your prices, they'll go vertical and do it themselves--or they'll find someone that will meet their terms."

In the summer of 1995, Garson asserts, Wal-Mart did just that. "They had awarded us a contract, and in their wisdom, they changed the terms so dramatically that they really reneged." Garson, still worried about litigation, won't provide details. "But when you lose a customer that size, they are irreplaceable."

Lovable was already feeling intense cost pressure. Less than three years after Wal-Mart pulled its business, in its 72nd year, Lovable closed. "They leave a lot to be desired in the way they treat people," says Garson. "Their actions to pulverize people are unnecessary. Wal-Mart chewed us up and spit us out."

Believe it or not, American business has been through this before. The Great Atlantic & Pacific Tea Co., the grocery-store chain, stood astride the U.S. market in the 1920s and 1930s with a dominance that has likely never been duplicated. At its peak, A&P had five times the number of stores Wal-Mart has now (although much smaller ones), and at one point, it owned 80% of the supermarket business. Some of the antipredatory-pricing laws in use today were inspired by A&P's attempts to muscle its suppliers.

There is very little academic and statistical study of Wal-Mart's impact on the health of its suppliers and virtually nothing in the last decade, when Wal-Mart's size has increased by a factor of five. This while the retail industry has become much more concentrated. In large part, that's because it's nearly impossible to get meaningful data that would allow researchers to track the influence of Wal-Mart's business on companies over time. You'd need cooperation from the vendor companies or Wal-Mart or both--and neither Wal-Mart nor its suppliers are interested in sharing such intimate detail.

Bain & Co., the global management consulting firm, is in the midst of a project that asks, How does a company have a healthy relationship with Wal-Mart? How do you avoid being sucked into the vortex? How do you maintain some standing, some leverage of your own?

This July, in a mating that had the relieved air of lovers who had too long resisted embracing, Levi Strauss rolled blue jeans into every Wal-Mart in the United States.

Bain's first insights are obvious, if not easy. "Year after year," Carey, a partner at Bain & Co., says, "for any product that is the same as what you sold them last year, Wal-Mart will say, 'Here's the price you gave me last year. Here's what I can get a competitor's product for. Here's what I can get a private-label version for. I want to see a better value that I can bring to my shopper this year. Or else I'm going to use that shelf space differently.' "

Carey has a friend in the umbrella business who learned that. One year, because of costs, he went to Wal-Mart and asked for a 5% price increase. "Wal-Mart said, 'We were expecting a 5% decrease. We're off by 10%. Go back and sharpen your pencil.' " The umbrella man scrimped and came back with a 2% increase. "They said, 'We'll go with a Chinese manufacturer'--and he was out entirely."

The Wal-Mart squeeze means vendors have to be as relentless and as microscopic as Wal-Mart is at managing their own costs. They need, in fact, to turn themselves into shadow versions of Wal-Mart itself. "Wal-Mart won't necessarily say you have to reconfigure your distribution system," says Carey. "But companies recognize they are not going to maintain margins with growth in their Wal-Mart business without doing it."

The way to avoid being trapped in a spiral of growing business and shrinking profits, says Carey, is to innovate. "You need to bring Wal-Mart new products--products consumers need. Because with those, Wal-Mart doesn't have benchmarks to drive you down in price. They don't have historical data, you don't have competitors, they haven't bid the products out to private-label makers. That's how you can have higher prices and higher margins."

Reasonable advice, but not universally useful. There has been an explosion of "innovation" in toothbrushes and toothpastes in the past five years, for instance; but a pickle is a pickle is a pickle.

Bain's other critical discovery is that consumers are often more loyal to product companies than to Wal-Mart. With strongly branded items people develop a preference for--things like toothpaste or laundry detergent--Wal-Mart rarely forces shoppers to switch to a second choice. It would simply punish itself by seeing sales fall, and it won't put up with that for long.

But as Wal-Mart has grown in market reach and clout, even manufacturers known for nurturing premium brands may find themselves overpowered. This July, in a mating that had the relieved air of lovers who had too long resisted embracing, Levi Strauss rolled blue jeans into every Wal-Mart doorway in the United States: 2,864 stores. Wal-Mart, seeking to expand its clothing business with more fashionable brands, promoted the clothes on its in-store TV network and with banners slipped over the security-tag detectors at exit doors.

Levi's launch into Wal-Mart came the same summer the clothes maker celebrated its 150th birthday. For a century and a half, one of the most recognizable names in American commerce had survived without Wal-Mart. But in October 2002, when Levi Strauss and Wal-Mart announced their engagement, Levi was shrinking rapidly. The pressure on Levi goes back 25 years--well before Wal-Mart was an influence. Between 1981 and 1990, Levi closed 58 U.S. manufacturing plants, sending 25% of its sewing overseas.

Sales for Levi peaked in 1996 at $7.1 billion. By last year, they had spiraled down six years in a row, to $4.1 billion; through the first six months of 2003, sales dropped another 3%. This one account--selling jeans to Wal-Mart--could almost instantly revive Levi.

Last year, Wal-Mart sold more clothing than any other retailer in the country. It also sold more pairs of jeans than any other store. Wal-Mart's own inexpensive house brand of jeans, Faded Glory, is estimated to do $3 billion in sales a year, a house brand nearly the size of Levi Strauss. Perhaps most revealing in terms of Levi's strategic blunders: In 2002, half the jeans sold in the United States cost less than $20 a pair. That same year, Levi didn't offer jeans for less than $30.

For much of the last decade, Levi couldn't have qualified to sell to Wal-Mart. Its computer systems were antiquated, and it was notorious for delivering clothes late to retailers. Levi admitted its on-time delivery rate was 65%. When it announced the deal with Wal-Mart last year, one fashion-industry analyst bluntly predicted Levi would simply fail to deliver the jeans.

But Levi Strauss has taken to the Wal-Mart Way with the intensity of a near-death religious conversion--and Levi's executives were happy to talk about their experience getting ready to sell at Wal-Mart. One hundred people at Levi's headquarters are devoted to the new business; another 12 have set up in an office in Bentonville, near Wal-Mart's headquarters, where the company has hired a respected veteran Wal-Mart sales account manager.

Getting ready for Wal-Mart has been like putting Levi on the Atkins diet. It has helped everything--customer focus, inventory management, speed to market. It has even helped other retailers that buy Levis, because Wal-Mart has forced the company to replenish stores within two days instead of Levi's previous five-day cycle.

And so, Wal-Mart might rescue Levi Strauss. Except for one thing.

Levi didn't actually have any clothes it could sell at Wal-Mart. Everything was too expensive. It had to develop a fresh line for mass retailers: the Levi Strauss Signature brand, featuring Levi Strauss's name on the back of the jeans.

Two months after the launch, Levi basked in the honeymoon glow. Overall sales, after falling for the first six months of 2003, rose 6% in the third quarter; profits in the summer quarter nearly doubled. All, Levi's CEO said, because of Signature.

"They are all very rational people. And they had a good point. Everyone was willing to pay more for a Master Lock. But how much more can they justify?"

But the low-end business isn't a business Levi is known for, or one it had been particularly interested in. It's also a business in which Levi will find itself competing with lean, experienced players such as VF and Faded Glory. Levi's makeover might so improve its performance with its non-Wal-Mart suppliers that its established business will thrive, too. It is just as likely that any gains will be offset by the competitive pressures already dissolving Levi's premium brands, and by the cannibalization of its own sales. "It's hard to see how this relationship will boost Levi's higher-end business," says Paul Farris, a professor at the University of Virginia's Darden Graduate School of Business Administration. "It's easy to see how this will hurt the higher-end business."

If Levi clothing is a runaway hit at Wal-Mart, that may indeed rescue Levi as a business. But what will have been rescued? The Signature line--it includes clothing for girls, boys, men, and women--is an odd departure for a company whose brand has long been an American icon. Some of the jeans have the look, the fingertip feel, of pricier Levis. But much of the clothing has the look and feel it must have, given its price (around $23 for adult pants): cheap. Cheap and disappointing to find labeled with Levi Strauss's name. And just five days before the cheery profit news, Levi had another announcement: It is closing its last two U.S. factories, both in San Antonio, and laying off more than 2,500 workers, or 21% of its workforce. A company that 22 years ago had 60 clothing plants in the United States--and that was known as one of the most socially reponsible corporations on the planet--will, by 2004, not make any clothes at all. It will just import them.

In the end, of course, it is we as shoppers who have the power, and who have given that power to Wal-Mart. Part of Wal-Mart's dominance, part of its insight, and part of its arrogance, is that it presumes to speak for American shoppers.

If Wal-Mart doesn't like the pricing on something, says Andrew Whitman, who helped service Wal-Mart for years when he worked at General Foods and Kraft, they simply say, "At that price we no longer think it's a good value to our shopper. Therefore, we don't think we should carry it."

Wal-Mart has also lulled shoppers into ignoring the difference between the price of something and the cost. Its unending focus on price underscores something that Americans are only starting to realize about globalization: Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: "We want clean air, clear water, good living conditions, the best health care in the world--yet we aren't willing to pay for anything manufactured under those restrictions."

Randall Larrimore, a former CEO of MasterBrand Industries, the parent company of Master Lock, understands that contradiction too well. For years, he says, as manufacturing costs in the United States rose, Master Lock was able to pass them along. But at some point in the 1990s, Asian manufacturers started producing locks for much less. "When the difference is $1, retailers like Wal-Mart would prefer to have the brand-name padlock or faucet or hammer," Larrimore says. "But as the spread becomes greater, when our padlock was $9, and the import was $6, then they can offer the consumer a real discount by carrying two lines. Ultimately, they may only carry one line."

In January 1997, Master Lock announced that, after 75 years making locks in Milwaukee, it would begin importing more products from Asia. Not too long after, Master Lock opened a factory of its own in Nogales, Mexico. Today, it makes just 10% to 15% of its locks in Milwaukee--its 300 employees there mostly make parts that are sent to Nogales, where there are now 800 factory workers.

Larrimore did the first manufacturing layoffs at Master Lock. He negotiated with Master Lock's unions himself. He went to Bentonville. "I loved dealing with Wal-Mart, with Home Depot," he says. "They are all very rational people. There wasn't a whole lot of room for negotiation. And they had a good point. Everyone was willing to pay more for a Master Lock. But how much more can they justify? If they can buy a lock that has arguably similar qual-ity, at a cheaper price, well, they can get their consumers a deal."

It's Wal-Mart in the role of Adam Smith's invisible hand. And the Milwaukee employees of Master Lock who shopped at Wal-Mart to save money helped that hand shove their own jobs right to Nogales. Not consciously, not directly, but inevitably. "Do we as consumers appreciate what we're doing?" Larrimore asks. "I don't think so. But even if we do, I think we say, Here's a Master Lock for $9, here's another lock for $6--let the other guy pay $9."

Judge certifies 100,000-strong class for
Wal-Mart hours case

By Jahna Berry - The Recorder

November 11, 2003

As Wal-Mart braces for a key ruling in a massive sex-discrimination suit in federal court, an Alameda County judge has certified a wage-and-hour class action on behalf of more than 100,000 California Wal-Mart employees.

The East Bay suit, the largest wage-and-hour case ever to be certified, could force the nation's No. 1 retailer to shell out millions in back pay, one plaintiffs' attorney says.

On Thursday, Judge Ronald Sabraw cleared the way for plaintiffs to litigate Savaglio v. Wal-Mart, C835687, a suit alleging that Wal-Mart routinely asked workers to toil "off the clock" but didn't pay them for it. The work included times when workers were told to shorten, skip or interrupt lunch and other breaks.

"The court finds that plaintiffs have presented substantial evidence that Wal-Mart had uniform policies of encouraging employees to assist customers at all times ... and discouraging overtime work," Sabraw wrote.

Wal-Mart's attorney, Teresa Beaudet of the Los Angeles office of Mayer, Brown, Rowe & Maw, referred press calls to Wal-Mart spokeswoman Sarah Clark. Clark could not be reached for comment Monday afternoon.

Savaglio is one of several similar suits pending in other states, said lead plaintiff attorney Frederick Furth of The Furth Firm in San Francisco.

Wal-Mart's practices are "hard on [workers] physically and emotionally," Furth said, noting that employees had to help any customer within 10 feet, whether they were working or not. "For a lot of them, this was the only job available to them."

The suit extends to past and present hourly California Wal-Mart employees who've worked with the retailer since 1997.

Although the East Bay case is the largest certified class action against Wal-Mart so far, Dukes v. Wal-Mart, 01-2252, may soon dwarf it. That case, which is pending before U.S. District Judge Martin Jenkins, alleges that Wal-Mart pays women less and promotes them less often than men. If the class, which includes 1.6 million past and present female employees, is certified, it would be the largest employment discrimination class in the nation's history.

Reporter Jahna Berry's e-mail address is mailto:jberry@therecorder.com

P&G, Wal-Mart store did secret test of RFID

Howard Wolinsky - Chicago Sun-Times
November 9,  2003

Shoppers in a suburban Tulsa, Okla., Wal-Mart were unwitting guinea pigs earlier this year in a secret study that two of America's largest corporations never expected you'd know about.

In the study, uncovered by the Chicago Sun-Times, shelves in a Wal-Mart in Broken Arrow, Okla., were equipped with hidden electronics to track the Max Factor Lipfinity lipstick containers stacked on them. The shelves and Webcam images were viewed 750 miles away by Procter & Gamble researchers in Cincinnati who could tell when lipsticks were removed from the shelves and could even watch consumers in action.

The study involved a new technology, known as Radio Frequency Identification (RFID), that enables retailers to use radio signals to electronically track products in warehouses and on store shelves, a technology critics fear ultimately could be used to track people once they leave the store.

Manufacturers and retailers are looking at ultimately putting the tiny chips into everything from soda cans and cereal boxes to shoes, clothing and car tires.

This worries privacy-rights advocates who envision tags in shoes and other personal items being linked to credit-card information so that retailers and government agencies could spy on the public.

Experts on RFID said the four-month study in Broken Arrow, Okla., was the first of its kind in the United States. Up to now, industry leaders have denied such testing had been conducted in this country.

The Sun-Times learned of the trial from a disgruntled Procter & Gamble executive and also from the firm that designed the "smart shelf" system. Researchers concealed "readers" in contact paper placed under the shelves and embedded RFID antenna chips in Lipfinity packaging.

Kevin Ashton, executive director of the Auto-ID Center at the Massachusetts Institute of Technology, downplayed the trial. "I think that the idea that someone's privacy is at stake because there are a few RFID tags in a few lipsticks in one store is silly," Ashton said.

The Auto-ID Center was founded in 1999 to develop RFID technology.

But Katherine Albrecht, founder of CASPIAN, a privacy rights group, said, "On the surface, the Broken Arrow trial may seem harmless. But the truth is that the businesses involved pushed forward with this technology in secret, knowing full well that consumers are overwhelmingly opposed to it. This is why we have called for mandatory labeling of products containing RFID chips."

Procter & Gamble spokeswoman Jeannie Tharrington reluctantly confirmed the Broken Arrow test.

She said there was a sign at the Lipfinity display that "alerted customers that closed-circuit televisions and electronic merchandise security systems are in place in the store."

She said there were no specific warnings about RFID tags in the lipstick packages.

Tharrington said the tags had a short read range -- about a half inch. That meant that once the packages left the shelves, researchers could not track them or the people carrying them.

Albrecht said: "Customers do not go into a Wal-Mart expecting to be used as research subjects. And they certainly don't expect these companies to slip tiny tracking devices into the products they buy."

Tom Williams, spokesman for Wal-Mart, initially denied that the study had been done, only to call back the next day to say he found that indeed the test had been conducted from late March until mid- July.

The Chicago Sun-Times learned that an Oklahoma Wal-Mart and Procter & Gamble did a study earlier this year of Radio Frequency Identification. Shelves in a display similar to this (minus the computers) were equipped with hidden electronics to track packages of Lipfinity lipstick.

Judge certifies Wal-Mart suit class action

BY JULIE FORSTER - St. Paul Pioneer Press
6 November 2003

More than 64,000 former and current employees of Wal-Mart and Sam's Club stores in Minnesota will be eligible to join a lawsuit against the giant retailer that claims employees were forced to work off the clock and without breaks.

Thomas R. Lacy, a Dakota County district court judge, this week gave class-action status to a wage-and-hour case against the Bentonville, Ark., company. The case could be worth upwards of $200 million based on the number of potential claimants.

Across the nation, there are 37 class-action lawsuits against Wal-Mart with similar types of claims. Minnesota's is only the second to be certified. The other such case, in Indiana, is on appeal. Wal-Mart said it is "looking at options" for an appeal in the Minnesota case.

The case was originally filed in September 2001 by four former hourly employees who maintain that they did not receive rest and meal breaks to which they were entitled under Wal-Mart policy and Minnesota law. Each of the four women also claims that she worked off the clock without compensation, a violation of Wal-Mart policy and state wage-and hour laws. Wal-Mart denies these claims.

The majority of cases filed as class actions are never certified. And as is often the case, it would be unlikely that the plaintiffs would have the wherewithal to proceed individually.

In this case, the judge was convinced that tens of thousands of potential class members have common circumstances and similar claimed injuries and that the merits of the case should be decided on a class-wide basis.

"It's not easy to do. That's why it is somewhat extraordinary when a judge allows a class action, particularly against such a power like Wal-Mart," said Joe Daly, a law professor at Hamline University who is also a federal mediator in labor disputes.

"The unusual part is that they are going against a company that is very large," he said. "They are going against a company that has projected itself in advertising as family-friendly and old-people-friendly. Now Wal-Mart is going to have to deal with thousands and thousands of employees who may not have even thought about this and are now realizing that they very well may have been short-changed."

Wal-Mart has 58 stores in Minnesota, including its Sam's Club, supercenter and discount stores. Altogether, these stores employ 15,749 hourly workers and have employed 64,642 hourly workers since 1998. The plaintiffs — Nancy Braun, Debbie Simonson, Cindy Severson and Pamela Reinert — are all former employees who worked at various stores in Minnesota during or after 1997.

A key piece of evidence in the case is a time record audit conducted by Wal-Mart in 2000. Wal-Mart disputes the accuracy of these records but, according to the court order, Wal-Mart's own internal auditors concluded — based on data from those records — that hourly employees in a sample of 127 stores, including six Minnesota stores, were denied more than 76,000 rest and meal breaks for a one-week period during June 2000. The audit's own author concluded that "Wal-Mart may face several adverse consequences as a result of staffing and scheduling not being prepared appropriately," court records said.

The central issue in the case is whether Wal-Mart's conduct, as reflected in the time records, resulted in employees being denied earned rest breaks, meal periods and compensation for time worked.

The time records show that in some cases payroll managers edited time cards, shaving off time or manually inserting a 30-minute unpaid meal period into hourly workers' previous day's time entries. Wal-Mart admits the manual insertion in only one case and had no explanation for other instances of edited time records, court records said. "While the court is not making a determination of the merits, for class certification purposes, the evidence submitted by plaintiffs, based on Wal-Mart's time records, tends to show that these practices were widespread and not limited to the four named plaintiffs," Judge Lacy wrote.

The attorneys for the former employees maintain that store managers are under enormous pressure to keep labor costs to a minimum and that the company stacks the deck so that managers cannot meet their budgets without resorting to these types of practices. "They are constantly pressured to decrease payroll, both the number of employees and the total payroll expense as a percentage of sales," said Jonathan Parritz, the lead plaintiff's attorney who is arguing the case.

A Wal-Mart spokeswoman said the company's policy is to pay hourly workers for every minute that they work. "Certifying this as a class action does not mean that the company has done anything wrong or improper," said Sarah Clark, a Wal-Mart spokeswoman. "There has been no ruling on the merits of the plaintiff's claims."

The courts have denied certification in eight states, including a decision filed last week in Georgia.

Wal-Mart influence across U.S. grows

By Greg Schneider and Dina ElBoghdady

November 6, 2003 - Washington Post

Wal-Mart, known for selling goods at rock-bottom prices, has forced other retailers to follow suit or fall behind.

A Wal-Mart and Sam's Club will open next year in Honolulu. For retailers, competing with Wal-Mart means not just holding down wages, but curbing healthcare costs. Wal-Mart workers typically earn $7-$8 an hour.

MORGANTOWN, W.Va. As a young man, Roy Bukrim found a job that seemed better than working in dangerous coal mines like his relatives: He hired on at the Kroger supermarket, where 27 years later he's head night stocker and supports a wife, two kids and a mortgage.

But Bukrim, 48, figures he wouldn't have that career option today. Young people who hire on now get minimum wage and no health benefits, then leave after a few months. Bukrim said the future that he saw in grocery work no longer exists.

To Bukrim and other workers as well as Kroger Co. executives the juggernaut driving that change is the store's most-feared competitor, Wal-Mart Stores Inc.

"All we've heard is Wal-Mart this and Wal-Mart that," said Kroger cashier Victoria Marano. "They want to be like Wal-Mart so they can compete."

Wal-Mart, the world's biggest retailer and the nation's biggest private employer, has become so powerful that its practices reverberate throughout the U.S. economy. About as many people work for Wal-Mart 1.3 million as serve active duty in the U.S. military. Its most recent annual sales $245 billion are greater than the gross domestic product of Switzerland. It's no wonder the company has more than 3,000 stores in the United States; on Oct. 29 Wal-Mart opened 39 stores, and it once opened 47 in a day.

Next year, the company will open a 317,000-square-foot Wal-Mart/Sam's Club center on a 10.5-acre site in Honolulu known as the "Ke'eaumoku superblock."

Because it wields enormous buying power, Wal-Mart influences the makers of virtually all household products, dictating everything from pricing to packaging. What's more, Wal-Mart's mania for selling goods at rock-bottom prices has trained consumers to expect deep discounts everywhere they shop, forcing competing retailers to follow suit or fall behind.

Part of the reason the chain is able to offer a microwave oven for under $30 or a 24-can package of Sam's Choice cola for $3.64 or a gas-powered lawn mower for under $150, for instance, is that it contracts with outside janitorial services some of which have questionable hiring practices and relies heavily on lower-paid part-time workers, say unions and competitors.

Wal-Mart's vast, nonunionized workforce earns a typical wage of about $7 to $8 an hour. Unionized workers at Kroger, by contrast, said they were making between $11 and $13 an hour, with full health benefits. About 62 percent of Wal-Mart workers are eligible for benefits, but less than half of the workforce participates. Critics say the low participation is because Wal-Mart requires steep employee contributions.

As other retailers follow Wal-Mart's lead, workers without technical training are feeling a tightening squeeze. And untrained people entering today's workforce the way Bukrim did three decades ago have dwindling odds of reaching the middle class.

"These are jobs that have historically yielded a middle-class lifestyle," said Jared Bernstein, an economist with the Economic Policy Institute. "But with a much more lean and mean approach to services, many of those jobs are going by the wayside."

Nowhere is that shift more evident than at supermarkets, such as Kroger, which have seen Wal-Mart rocket to the top of their industry in only 10 years. Bukrim and 70,000 other unionized workers at the Kroger, Safeway and Albertsons chains in several states including West Virginia, California and Kentucky are now on strike or locked out in a conflict over wage and benefits changes their employers say are necessary to compete with Wal-Mart.

Some economists argue that the Wal-Martization of the American workforce is simply the free-market system functioning as it should. Gary Stibel, founder and principal of the New England Consulting Group, said Wal-Mart has saved consumers more than $20 billion through its discount pricing. Figuring in Wal-Mart's pressure on other retailers to lower prices, savings top $100 billion, he said.

"In this day and age, the United States needs more companies like Wal-Mart to create jobs, even if not at the highest pay," Stibel said.

Wal-Mart morphed from a single store in Rogers, Ark., in 1962 into a retail powerhouse by mastering the art of low pricing in a way that has transformed its competitors, its suppliers and the industries it now dominates including groceries, toys and apparel.

Founder Sam Walton pioneered the "supercenter" retail phenomenon. His use of technology such as bar code price scanners and his reinvention of the supply chain, with stores reordering stock only as needed instead of keeping mountains of goods in warehouses, changed the way of business in America.

"Wal-Mart creates its own weather," said John Challenger, chief executive of Challenger, Gray & Christmas Inc., a Chicago outplacement firm that tracks retail jobs. "It sets the standards in many ways for retailers throughout the country."

Kmart Corp., which dwarfed Wal-Mart only 15 years ago, filed for bankruptcy protection in 2002 and eliminated 57,000 positions in part because it tried to compete with Wal-Mart on prices and failed. FAO Inc., the iconic toy seller, filed for protection from its creditors in part because it did not try to compete with Wal-Mart on prices. Both retailers have since emerged from bankruptcy proceedings. And since Wal-Mart began aggressively expanding into groceries in the past decade, some national supermarket chains have gone bankrupt.

It's within the food sector that the nonunionized retailer is most affecting labor relations in this country, said Ira Kalish, a global director at Deloitte Research.

For supermarkets, which operate on razor-thin profit margins, labor is perhaps the highest cost of doing business, said Michael J. Silverstein, a senior vice president at Boston Consulting Group.

"The less you pay (for labor), the lower your prices can be," Silverstein said. "The grocery store is a war zone, and the weak are going down fast and with them go a lot of jobs."

Wal-Mart's supercenters have labor costs 20 percent to 30 percent lower than those of unionized supermarkets, according to a study from consulting firm Retail Forward. So groceries at Wal-Mart cost about 15 percent less than the competition, the study said.

Retail Forward concluded that for every Wal-Mart Supercenter that opens in the next five years, two supermarkets will close their doors. That means the supermarket industry could lose 2,000 more stores over the next five years, or 400 a year.

Wal-Mart is applying the same heavy pressure on grocery suppliers that it exerts on makers of other consumer goods, leaving them beholden to the retailing giant for a significant part of their revenue. Wal-Mart made up 30 percent or more of U.S. sales for Clorox Co., Gillette Co., Mattel Inc. and Procter & Gamble Co. in fiscal 2002, according to Fitch Ratings.

For retailers, competing with Wal-Mart means not just holding down wages, but curbing healthcare costs.

A report by the AFL-CIO said the retailer insures only about 45 percent of its work force. Wal-Mart workers must pay about one-third of the cost of their healthcare premiums, while employees at other large companies typically pay 16 percent to 25 percent, the report said.

The result is that many Wal-Mart workers transfer the healthcare burden either to their spouse's employer or to government agencies, the report said.

Wal-Mart defends its practices, arguing that its employees have generous access to insurance and that worker contributions to health care $57 per two-week pay period for a family plan are in line with the rest of the industry.

As for wages, Wal-Mart's entry-level jobs "are not designed for someone who is the sole support for a family" but for those looking to advance, said Mona Williams, Wal-Mart's chief spokeswoman. About two-thirds of Wal-Mart's managers were once hourly workers for the chain.

Wal-Mart's everyday high costs
By Froma Harrop

22 October 2003 - Providence Journal

AMERICA WORSHIPS at the altar of Everyday Low Prices. That's how Wal-Mart can get away with ravaging American wages, benefits and the jobs themselves. That's how Wal-Mart can go on hollowing out America's downtowns and with taxpayer subsidies, to boot.

Wal-Mart is not the only big-box discounter turning the American countryside into a crudscape and its working people into paupers. But the monster leads the pack in terms of size and its holy crusade to cut costs. With $245 billion in revenues last year, Wal-Mart is the world's largest company. Sales at the Bentonville, Ark.-based giant are bigger than the combined total of Home Depot, Target, Sears and Kroger.

Business Week described the everyday low prices slogan as the core value of a cult masquerading as a company. All those yellow smiley faces and front-door greeters are part of a bigger strategy: to get rich off America's workers while undercutting them at every turn. What am I talking about? Here are the particulars:

* Wal-Mart likes to call its sales clerks associates, but serfs would be more like it. The company paid its salespeople an average $8.23 an hour in 2001. At that wage, a full-time worker made only $13,861 a year. The poverty level for a family of three was $14,630. Only 38 percent of Wal-Mart's workers have health coverage. It should surprise no one that nearly half of Wal-Mart's employees quit every year. (Before the recession, the annual turnover rate was 70 percent.)

* Wal-Mart is destroying factory jobs in America. Example: Levi Strauss was one of the last apparel makers to actually produce stuff in the United States. But the made-in-America label means zip to Wal- Mart, which scours the globe's sweatshops for the sweetest prices. Demands for the cheapest jeans have forced Levi Strauss to shut down about a dozen U.S. plants. A factory in San Antonio is about to become the latest casualty.

Wal-Mart lobbies furiously in Washington for free-trade deals that guarantee a flood of goods made by pennies-an-hour labor ($12 billion worth from China alone last year). Small wonder America's manufacturers call Wal-Mart the Beast from Bentonville.

* To Wal-Mart, unions are the devil and must be destroyed. Three years ago, meat cutters in Jacksonville, Texas, tried to establish the first Wal-Mart union. Eleven days after they joined the United Food and Commercial Workers, Wal-Mart closed all the meat-cutting departments at its stores and started buying pre-cut meat.

Wal-Mart is now on a rampage to devour the nation's supermarkets, and so threatens workers everywhere. Its Supercenter stores, which sell groceries, have already sent more than 20 national supermarket chains into bankruptcy. Wal-Mart has plans for 1,000 new Supercenters.

Terrified of a Wal-Mart invasion, California's three biggest supermarket chains have tried to lower their own costs by demanding concessions from their unionized employees. The result is a strike by 70,000 workers at supermarkets in southern California.

* Wal-Mart is paving over America and destroying our communities. Its ugly boxes, plopped down on the edge of town, vacuum up business from local shopkeepers. (So much for any notion of customer loyalty.)

A group named Sprawl-Busters was formed 10 years ago to block Wal- Mart from forcing itself onto Greenfield, Mass. Every day, five or six towns from across the country contact Sprawl-Busters for advice on stopping a Wal-Mart, according to the group's founder, Al Norman. It's not even about shopping, Norman says. It's about how we relate to the places we live in. These towns are being changed economically, physically and socially.

* Wal-Marts hurt surrounding communities. Iowa State University economist Kenneth Stone has studied the impact of Wal-Mart on rural Iowa. He found that some business districts benefited from a Wal- Mart but other towns within 20 miles suffered badly, with retail sales plummeting 25 percent after five years. Having lost their local merchants, the people living in surrounding areas find themselves driving long distances to the Wal-Mart.

The line of groups calling for a boycott of Wal-Mart and its Sam's Club subsidiary grows by the week. As a former Wal-Mart customer, your author appreciates the lure of a good price. But there are competing values. When we understand the real cost of these everyday low prices, they don't seem much of a bargain at all.

Froma Harrop is a Journal editorial writer and syndicated columnist. She may be reached by e-mail at: fharrop@projo.com.

Union Blues at Wal-Mart

By John Dicker, The Nation

June 28, 2002

"Got any nachos ready?"

That's what Joe Hendrix said to the folks at the Radio Grill, his employer's in-house snack bar. Hendrix was on his way to punch out from his shift in the meat-cutting department at the Wal-Mart Supercenter in Jacksonville, Texas; eight months earlier, in February 2000, he'd voted yes in the first successful election for union representation at a US Wal-Mart store. For failing to pay when placing his nacho order, he was fired.

Seventy-two-year-old Sidney Smith also voted yes; he got axed for eating a pre-weighed banana on the checkout line. Such were the excuses offered by management as union supporters were systematically routed from their jobs. But this was well after the real damage had been done, when Wal-Mart announced two weeks after the Jacksonville vote that it was switching to case-ready, or pre-cut, beef and would be eliminating meat-cutting operations in 180 stores. Wal-Mart claimed its decision had nothing to do with the organizing drive, but the union filed a complaint with the National Labor Relations Board. Although the board ruled in the union's favor, the timing of the news contained a chillingly clear message to Wal-Mart workers nationwide: This is what you can expect if you try to organize.

Wal-Mart's legendary ferocity in such situations has, until recently, kept unions from trying to make inroads in its million-strong work force. But after more than a decade of pussyfooting, the United Food and Commercial Workers union and the Teamsters are gearing up to take on Wal-Mart Stores, Inc., with the former taking the retail stores and the latter handling 100-plus distribution centers. For the UFCW, this undertaking is less the result of newfound militancy than it is about mere survival. Seventy percent of the union's 1.4 million members work for national groceries like Kroger and Safeway, as well as smaller, regional chains. With a strong presence in the top 100, mostly urban, markets, the big chains can hold steady in the face of Wal-Mart encroachment. The regional chains, however, are getting walloped. And with Wal-Mart circling on the fringes of larger markets, its lower wages and benefits will likely erode those enjoyed by UFCW members.

In its 40-year reign Wal-Mart has amassed a jaw-dropping trophy rack of titles – "world's largest retailer," "world's largest private employer" and the recently acquired "world's largest corporation," edging out ExxonMobil for the top spot in this year's Fortune 500. The chain accounts for 6.4 percent of the nation's retail sales. With K-Mart, until recently its closest rival, now in bankruptcy, the path is clear to ever greater domination.

The only Wal-Mart store to unionize successfully was in Ontario, Canada, abetted in no small measure by the province's once-progressive labor laws. But the fledgling union was broken by the company's flat-out refusal to recognize the contract. While a climber at Mount Everest base camp can point to the many individuals who have summited and lived, a Wal-Mart worker trying to join a union knows no such consolation. Two unions, neither a paragon of union democracy or member mobilization, face an employer that has been growing by 15 percent each year, recession and all: In the context of a labor movement that has not been weaker since the 1920s, with a legal system seemingly rigged against it, this is an Everest ascent with no Sherpas in sight.

Wal-Mart manifests itself in three main forms: The traditional Wal-Mart retail store, which peddles everything from panties to Pennzoil and averages about 90,000 square feet; SAM's Club, a warehouse club store where "members" pay an annual fee to receive greater discounts on dry goods and groceries; and Supercenters, the company's biggest growth vehicle, a combination retail and grocery store clocking in at 190,000 square feet. This year, Wal-Mart plans to open a new one every other day.

"Wal-Mart's strategy is very similar to Mao Zedong's," says retail analyst Burt Flickinger. "Conquer the countryside first and take the cities second." If this sounds alarmist, consider the Neighborhood Market. It's a prototype grocery store roughly the size of three 7-Elevens. In the past few years Wal-Mart has deployed them for greater market saturation in its urban strongholds like Oklahoma City and Dallas. While zoning laws and real estate costs impede the development of most forms of Wal-Mart in the larger metro areas, the trim Neighborhood Market might squeeze into places a Supercenter could never dream of occupying.

SAM Walton built his empire on a belief that rural America saw more business than anyone in the corporate world was recognizing. This vision – combined with a zealot's dedication to low overhead, undercutting the competition through lower profit margins and higher sales volumes, investment in technology and aggressive growth-blazed a trail for an imperial corporation that now operates in nine countries.

Walton has been dead for a decade, but he lives on as a deity, the customer-service superego of Wal-Martians nationwide. So entrenched is the myth of "Mr. Sam" as a benign patriarch that rather than contradict it, the UFCW plays along, with campaign messages about "restoring Sam's vision." Unfortunately, Walton's vision never included unions. As Wall Street Journal reporter Bob Ortega chronicles in his book In Sam We Trust, Walton was bent on maintaining low labor costs, paying workers subminimum wages when he could get away with it and showing no qualms about threatening store and warehouse closures to beat back union campaigns. The company's trumpeted profit-sharing plan and "open door policy" for addressing grievances were all born out of the pleading of Walton's unionbusting consigliere, John Tate. Tate believed that Walton could circumvent labor problems by convincing his workers that he was on their side. For Walton, this turned out to be a winning strategy – a full-time union-prevention program.

Sam drove a pickup truck, shot quail and probably spent more time studying KMart than KMart's own executives. He embodied a peculiarly American paradigm that endures at company headquarters in Bentonville, Arkansas, to this day. He was a self-made, rock-em-sock-em, capitalist cowboy in an industry devoted to peddling every fathomable consumer good, and yet he remained puritanically frugal in his personal and corporate expenditures.

Unlike the Gap or Starbucks, Wal-Mart is not selling brand lifestyle. Its aesthetics in architecture and advertising are decidedly no-frills, its corporate offices stark. Executives pay for their own coffee, and even CEO Lee Scott has been known to share a hotel room on business trips. Wal-Mart's subordination to the bottom line permeates all levels. For instance, to curtail frivolous energy consumption, lights, heat and air conditioning at all 3,289 US Wal-Marts are controlled from Bentonville. Not surprisingly, this ethos hits those at the bottom of the food chain the hardest.

Managers are under considerable pressure to keep profits up, and one of the few ways they can achieve this is by cutting operational costs, of which labor comprises about 50 percent. Former managers and employees attest to an unofficial policy of putting experienced "associates" – as the Wal-Martian wage slave is eloquently titled – out to pasture through firing for minor infractions or pushing them to quit by other means. Why pay $10.50 an hour when a new hire can be culled from the street for $7?

A perpetually churning work force offers the added benefit, from management's perspective, of keeping the union out. By its own admission, Wal-Mart burns through 70 percent of all new hires each year, a considerable number in a work force of over a million. As Bernie Hesse of UFCW Local 789 in the Twin Cities explains it, the paradox of retail organizing is "I'm working retail, this job sucks. If I don't like it I'll go get another job that pays $6.50 an hour." While many retail workers don't see their jobs as being worth a long, arduous battle for representation, they also cower at the real consequences of supporting a union: demotions, reduction in hours and "got any nachos ready"-style firings.

ALThough the union faces skepticism and fear among workers, it has discovered a few potent organizing issues – most notably, healthcare. Effective January 1, a full-time associate with two children and no spouse would pay $36 a week for basic coverage and $3.50 for dental, in addition to a $350 deductible for each individual on the plan. This tallies out to more than $3,000 a year for someone earning less than $16,000. Should it be any surprise that only 38 percent of Wal-Mart associates elect to have coverage? When the company announced a 30 percent hike in premiums this fall, it gleefully noted that associates had a "CHOICE to elect what will be done with 1/2 of the Wal-Mart contribution to our 401(k) account." One of these so-called choices was to "direct it toward paying health care rates." This change was illuminated in a video so slick that SAM's Club cashier Alan Peto said, "If I didn't know any better I really would have thought they had done me a big favor."

Just for shits and giggles, dial (501) 273-8300. That's Wal-Mart's twenty-four-hour "Union Hotline," designed for store managers to call on the first whiff of union activity. Your kind message will activate the beeper of an associate in Wal-Mart's "People Division." Assuming you are a store manager (and not a pinko prankster), your call will be promptly returned. If your associates are talking union, a flying column of unionbusters will be quickly dispatched to put out the fire.

Since the UFCW began talking to meat-cutters en masse in 1999, the People Division has increased from 12 employees to nearly 70. In terms of preparedness, though, Wal-Mart has always trumped the unions. Before any national campaign was afoot, Wal-Mart was publishing and distributing manuals like "A Manager's Toolbox To Remaining Unionfree," producing videos and running two-day workshops for store managers stressing their role as the "first line of defense" against a union campaign.

On paper Wal-Mart stays within the bounds of how an employer can legally respond to a union drive. "They're cosmetics," says unionbuster-turned-union-adviser Martin Levitt. "The company will wave them like a flag to show that they know the law, but once management and supervisors have been pulled into one-on-one meetings with the unionbusting forces, they are carefully programmed on how to break the law and told clearly that their very job depends on doing so."

While a store manager has likely been briefed on extralegal maneuvers, the dirty work is often delegated to nonsalaried department managers with no knowledge of labor law. Gretchen Adams, a co-manager at a Las Vegas Supercenter, was instructed by her district manager not to hire anyone with union experience, while Stan Fortune, a former department manager and security guard, was told to solicit grievances from union supporters, implementing raises and promotions to buy their loyalty. "I never knew I was breaking the law," he says. Wal-Mart spokeswoman Jessica Moser Eldred said the company follows all state, federal and local labor laws. "In no circumstance do we deviate from them."

Part of Wal-Mart's strategy is to deny contact between workers and the union. When it owns the land on which its store sits, it will invoke trespassing laws. "It got to the point where as soon as the organizers got out of their cars, the security guards would be in the parking lots telling them to leave," says Alan Peto.

In other cases, managers or security guards shadow organizers throughout the store, making it impossible for them to speak to workers. Organizers from the UFCW international staff are currently barred from all Wal-Marts under an injunction that forbids solicitation. The company has infuriated shoppers suspected of being union organizers by ejecting them; they've even booted Girl Scouts and Salvation Army bell ringers for fear that contradicting its no-solicitation policy will give the union an inroad.

Faced with the inevitable litany of unfair-labor-practice charges from the union in response to its illegal maneuverings, Wal-Mart can count on the glacial pace of the labor board to stall the campaign. If the board rules in the union's favor, the company suffers a slap on the wrist, posting a notice of company malfeasance in the break room. This is union organizing still haunted by the ghost of the 1947 Taft-Hartley Act.

The UFCW is now attempting to build a case before the NLRB arguing that Wal-Mart's violations are not the result of a few rogue store managers but part of a systematic policy of illegal intimidation, surveillance and terminations, all designed to keep workers from organizing. The union has filed forty complaints against Wal-Mart in twenty-four states, resulting in forty complaints issued by the NLRB against the company.

The UFCW hopes ultimately to attain remedies like "affirmative workplace access," a corrective ruling from the board that allows organizers to talk to workers in break rooms and to rebut management's captive-audience meetings, where workers are deluged with anti-union speeches and videos. Rulings for affirmative access are rare, and they typically take many years to attain. But they have been delivered with great success to UNITE at Fieldcrest Cannon and SEIU at Beverly Nursing Homes. Given a labor board stacked with Bush appointees and Wal-Mart's legal motto of WDWDW (What did we do wrong?), however, chances of an imminent victory are remote.

IN THE 14 years since Wal-Mart opened its first Supercenter, the UFCW has run a damage-control campaign bent on stemming the tide of expansion and sullying the company's image. The union has helped call attention to Wal-Mart's use of sweatshops and child labor overseas, as well as its bogus "Buy American" program, where the company wrapped itself in a "made in the USA" flag until it was revealed that most of its apparel was made in overseas sweatshops. The union also forged coalitions with antisprawl activists to stem Wal-Mart's growth.

All of these are noble pastimes, but without a strategy to organize workers, about as effective as pummeling the Taliban with passages from The Betty Friedan Reader. Until recently, it was hard to tell if the UFCW was boycotting Wal-Mart, organizing it or simply functioning as a thorn in its side. The mixed messages provide the People Division an opportunity to inoculate its associates with videos like "Wal-Mart Under Attack," which shows footage of UFCW rallies with members chanting "Wal-Mart: Not in My Neighborhood" and highlights various local efforts to get union members to sign pledges not to shop at Wal-Mart. When many associates openly identify with the company, the message that the union is against Wal-Mart packs a punch.

In the past year, however, the UFCW seems to have developed a more focused approach. Their line in the sand is Las Vegas, a city with a strong union presence in the service sector. While unionized groceries enjoy 90 percent of Vegas's market share, Wal-Mart is making headway with five Supercenters, five retail stores and four SAM's Clubs. Since March of last year, the union has been organizing in Las Vegas, with some activity in northeast Ohio and Texas. In Vegas, the UFCW hosts a radio show and maintains a Web site, which chronicles Wal-Mart's anti-union campaign and offers a needed arena for counterarguments and open communication among workers. (However, 12 percent of the website's hits come from Bentonville.)

This past November, workers at Las Vegas SAM's Club Store 6382 were set to vote in the third storewide election at a US Wal-Mart. But as the election approached, the company went into a hiring frenzy, disrupting the laboratory conditions required by the NLRB. Watching its support ebb as the company packed the unit with new hires-all of whom were subjected to anti-union videos and meetings-the union filed charges, which resulted in the board's decision to block the election; on March 28, the NLRB issued a complaint against the company, but the best the union is likely to get is another election with little to guarantee that Wal-Mart won't do the same thing again.

And what of the Teamsters? So far, their activity has been limited to two locals in California and Missouri. At a San Bernardino distribution center, a recent election was lost by a swing margin of 28 votes – an impressive result considering management was promising $3 raises in the week preceding the election and that the campaign was the work of a single organizer. Since Wal-Mart's distribution systems are models of efficiency and integral to the company's success, the Teamsters and UFCW might give Bentonville a run for its money if they coordinated their efforts, applying simultaneous pressure by engaging both truckers and retail workers, thus stretching the capacity of the People Division. But in light of Teamsters organizing director John Murphy's stated goal of transforming his department into "a desk and a telephone," and the union's overall stagnation under Jimmy Hoffa, it's hard to imagine they're going to attempt such a conquest anytime soon.

THE UFCW, for its part, has taken a largely top-down approach to the campaign, which has been guided by pressure tactics coming from union HQ in Washington-with some exceptions. "I get members asking me how it's going, how many people have signed cards, and I say what's the point? Why go through a regular election just to get knocked down?" says UFCW organizer Bernie Hesse. "I'm not trying to go store by store; I'm trying to build a social movement." Hesse's Local 789 has launched a campaign called "You Are Worth More" for retail workers in the Twin Cities. Rather than home in on one particular company, Hesse's local is planting roots in the community, establishing itself as a presence among a multiracial work force at metro-area Targets, KMarts and Wal-Marts.

There's no single war-winning strategy for bringing the union to Wal-Mart workers. Given the UFCW's history of bowing to hostile employers and suppressing its own dissidents, it remains to be seen whether the union is movement building or just circling wagons around its most endangered markets. At risk of excessive parade pissing, consider that even if SAM's Club 6382 wins an election, there are still 3,288 more to go. Wal-Mart is likely to be a decades-long struggle, fought by a largely female work force with no union experience. The struggle is now being waged by a vanguard of union lawyers. Ultimately they will have to take a back seat to shop-floor workers, member organizers and, most significant, the communities where workers live. When the lines between union and community collapse, an employer's traditional mode of attack – labeling the union an alien third party – disintegrates, and the campaign becomes less dependent on legal wrangling. Then, when Wal-Mart denies workers access to the union, wrecks an election or fires activist workers, the outrage does not come from a lone UFCW mouthpiece but from a movement.

Given this campaign's stakes – both real and symbolic – a movement is what Wal-Mart workers need. "If these retailers are going to be the jobs of the future, if we've really switched from a production to a service economy, than what is so revolutionary about insisting that they pay a living wage?" asks Bernie Hesse. Millions of associates and citizens may have to ask this question a million more times before a movement becomes something tangible, and not just a feel-good progressive mirage.

John Dicker is a freelance writer based in Brooklyn, New York.

Wal-Mart Wages Don't Support Wal-Mart Workers

By Stan Cox, AlterNet

June 10, 2003

On June 6, Wal-Mart's shareholders converged on Fayetteville, Arkansas for their annual meeting. According to Arkansas Business Online, "The famously colorful event often takes on the feeling of a high school pep rally, as shareholders and company executives perform the 'Wal-Mart cheer.'"

And why shouldn't they cheer? Their company chalked up a record $56.7 billion worth of sales in the first quarter of 2003.

Wal-Mart is the nation's biggest employer, the low-price champion, and a seller of just about everything. A healthy family with a roof over its head could supply virtually all of its other basic monthly needs with one stop at a Wal-Mart Supercenter like the one here in Salina, Kansas. To me, that raised a question: Can a family whose breadwinner works at Wal-Mart afford to supply its minimum needs by shopping there?

Last Sunday, my adult son and daughter joined me for a visit to the Wal-Mart Supercenter in Salina. We spent an hour and a half wandering among the hundreds of red, blue and yellow "Always Low Prices" signs. We checked many of those prices and then went home to do some calculating.

Our conclusion: A single parent employed full-time at Salina's Wal-Mart and raising two children aged 4 and 12 does not earn enough money to supply the family's basic needs by shopping at that same Wal-Mart.

According to the personnel manager at Salina's Supercenter, a cashier earns a starting hourly wage of $6.25. After Social Security and Medicare taxes, the paychecks for a month would total $1,016 for a full-time 176 hours. (That's 40 hours a week, which would put this cashier in a better financial position than the many employees who work 32 or fewer hours a week. Of course, hourly pay rises eventually, but the 2001 PBS report "Store Wars" found that most employees have left by the end of their first year.)

We calculated the amount that our hypothetical three-member family would spend each month if as many of its essential needs as possible were supplied by our local Supercenter. The bottom line: They would need an absolute minimum of $1,136 per month to cover housing, food, transportation, health care and miscellaneous expenses. Despite our best efforts, we exceeded our cashier's monthly income by $120. We couldn't have come even that close had our cashier's family not been eligible for a State of Kansas child-care allowance that covers all but $22 per month in child-care costs for such a family living on so low a wage.

To determine needs, we used published studies on an "adequate but austere" budget for a family with one adult, one preschooler and one school-age child living in Salina. But we slashed some of the published budget items by as much as 38 percent, based on the "Always Low Prices" we found at the Supercenter. And we completely eliminated anything we could do without.

Take a look at the details of our budget and try to decide if you could find a way to cut it and make ends meet.

Living wage campaigns across the country have attempted to determine and advocate for a wage level that can provide a decent life for working families. Living wages are designed to sustain a family over time. Our goal was much more modest. All we asked of our Wal-Mart wage was to get our cashier's family to the end of the month in a central Kansas city of 50,000, assuming they were already settled in a rented apartment or mobile home and had a paid-for car, furniture and appliances. The Wal-Mart wage failed – even at Wal-Mart prices, even with the 10 percent employee discount, and even with employer-assisted health insurance.

Our monthly budget allowed for a USDA-recommended "low-cost food plan" on which we economized further by selecting the cheapest foods in each category. It made for an unappealing and not especially healthful diet. Gas, oil, and repairs for the car – which was used for little more than getting the cashier to work and home – all came from Wal-Mart.

Our cost-cutting left no room for "luxuries": no travel outside Salina County, no cable TV, no home telephone service, no movies, no newspaper or magazine subscriptions, no fees for community sports or classes, no saving at Wal-Mart's in-store bank in case the car had to be replaced, no eating out (except for one meal a month at the McDonald's located in the Supercenter). Most of what's available at the Supercenter was off-limits to us: videos, haircuts, Christmas presents, eye care, tanning sessions, family portraits, bats and balls, small appliances, furniture, bicycles, film and developing.

There is a fundamental and inevitable conflict between the interests of corporations, to whom wages are a cost, and most human beings, to whom wages are a means of survival. Nowhere in this society is that conflict better illustrated than at your local Wal-Mart. Most of its employees and most of its customers depend on their paychecks to pay the bills. But to keep its shareholders in the money, the company depends on hyper-consumption.

Wal-Mart could not survive in a town with good public transportation, where families all grow their own vegetables, cut one another's hair, sew their own clothes, and borrow and lend tools. Like all retailers, it has to move vast quantities of merchandise at an ever-increasing pace. It does it, as the sign in the store says, by "Daring to Save You Even More." And to drive prices to rock-bottom, they have to drive down the wages they pay.

Of course, the wages Wal-Mart pays in Kansas seem princely when compared with those paid by many of its suppliers around the world. Try going to your local Supercenter with the monthly paycheck of a Bangladeshi factory worker who makes shirts for Wal-Mart. You won't make it to the end of Aisle 1.

Here in America, the government implicitly recognizes the insufficiency of Wal-Mart wages. Our cashier's family would be eligible for an Earned Income Tax Credit (EITC) of $4,140 in 2002. That would close the gap between the cashier's wage and bare survival, and provide enough additional income to lift the family just above the poverty line.

EITC, food stamps, Medicaid and state programs like Kansas' childcare allowance are needed because corporations like Wal-Mart refuse to pay their employees a sufficient wage for the work they do. Wal-Mart would not be able to "Rollback" prices the way it does, or pile up its gargantuan profits, without this government subsidy.

In February, Fortune Magazine emphasized the unchallenged dominance of the world's largest corporation: "Wal-Mart in 2003 is, in short, a lot like America in 2003: a sole superpower with a down-home twang."

Well, if Wal-Mart represents both the future of employment and the future of marketing in America, a lot more down-home folks are going to be tumbling into that gap between Always Low Prices and Always Low Wages.

Stan Cox is a plant breeder/geneticist and writer living in Salina, Kansas.

Stores Follow Wal-Mart's Lead in Labor; Competitors Struggle to Match Savings From Non-Union Workforce

Greg Schneider and Dina ElBoghdady - Washington Post Staff Writers
November 6,  2003 - The Washington Post

As a young man, Roy Bukrim found a job that seemed better than working in dangerous coal mines like his relatives: He hired on at the Kroger supermarket, where 27 years later he's head night stocker and supports a wife, two kids and a mortgage.

But Bukrim, 48, figures he wouldn't have that career option today. Young people who take a job there now get minimum wage and no health benefits, then leave after a few months. Bukrim said the future that he saw in grocery work no longer exists. "We've been the generation where that's all changed."

To Bukrim and other workers -- as well as Kroger Co. executives -- the juggernaut driving that change is the store's most-feared competitor, Wal-Mart Stores Inc.

"All we've heard is Wal-Mart this and Wal-Mart that," said Kroger cashier Victoria Marano. "They want to be like Wal-Mart so they can compete."

Wal-Mart, the world's biggest retailer and the nation's biggest private employer, has become so powerful that its practices reverberate throughout the U.S. economy. About as many people work for Wal-Mart -- 1.3 million -- as are on active duty in the U.S. military. Its most recent annual sales -- $245 billion -- are greater than the gross domestic product of Switzerland. It's no wonder the company has more than 3,000 stores in the United States; on Oct. 29 alone Wal-Mart opened 39 stores, and it once opened 47 in a day.

Because it wields enormous buying power, Wal-Mart influences the makers of virtually all household products, dictating everything from pricing to packaging. What's more, Wal-Mart's mania for selling goods at rock-bottom prices has trained consumers to expect deep discounts everywhere they shop, forcing competing retailers to follow suit or fall behind.

The Oct. 23 arrest of 250 illegal aliens working for outside cleaning crews at 61 Wal-Mart stores nationwide underscores another aspect of Wal-Mart's low-price formula: a fervent effort to hold down labor costs. This week the retailer said it has received a "target letter" from a federal grand jury in Pennsylvania, signifying that Wal-Mart itself is under investigation for its role in using illegal workers.

Part of the reason the chain is able to offer a microwave oven for under $30 or a 24-can package of Sam's Choice cola for $3.64 or a gas-powered lawn mower for under $150, for instance, is because it contracts with outside janitorial services -- some of which have questionable hiring practices -- and relies heavily on lower-paid part-time workers, say unions and competitors.

Wal-Mart's vast, non-unionized work force earns a typical wage of about $7 to $8 an hour. Unionized workers at Kroger, by contrast, said they were making between $11 and $13 an hour, with full health benefits. About 62 percent of Wal-Mart workers are eligible for benefits, but less than half of the workforce participates. Critics say the low participation is because Wal-Mart requires steep employee contributions.

As other retailers follow Wal-Mart's lead, workers without technical training are feeling a tightening squeeze. Low-skilled manufacturing jobs are vanishing at historic rates -- West Virginia's coalfield employment, for instance, plummeted from 59,700 jobs in 1980 to 15,700 in 2000. Untrained people entering today's workforce the way Bukrim did three decades ago have dwindling odds of reaching the middle class.

"These are jobs that have historically yielded a middle-class lifestyle. But with a much more lean and mean approach to services, many of those jobs are going by the wayside," said Jared Bernstein, an economist with the Economic Policy Institute.

Nowhere is that shift more evident than at supermarkets, such as Kroger, which have seen Wal-Mart rocket to the top of their industry in only 10 years. Bukrim and 70,000 other unionized workers at the Kroger, Safeway and Albertsons chains in several states -- including West Virginia, California and Kentucky -- are now on strike or locked out in a conflict over wage and benefits changes their employers say are necessary to compete with Wal-Mart.

Some economists argue that the Wal-Martization of the American workforce is simply the free-market system functioning as it should. Gary Stibel, founder and principal of the New England Consulting Group, said Wal-Mart has saved consumers more than $20 billion through its discount pricing. Figuring in Wal-Mart's pressure on other retailers to lower prices, savings top $100 billion, he said.

"In this day and age, the United States needs more companies like Wal-Mart to create jobs, even if not at the highest pay," Stibel said. "The company that makes its mark by taking the cost of manufacturing products and services up will lose, and the country that promotes that will lose."

Wal-Mart morphed from a single store in Rogers, Ark., in 1962 into a retail powerhouse by mastering the art of low pricing in a way that has transformed its competitors, its suppliers and the industries it now dominates -- including groceries, toys and apparel.

Founder Sam Walton pioneered the "supercenter" retail phenomenon. His use of technology such as bar code price scanners and his reinvention of the supply chain, with stores reordering stock only as needed instead of keeping mountains of goods in warehouses, changed the way businesses interact with one another and their customers.

Walton's method of expanding his chain was unique, too. The company emerged from what one analyst called "one of the most backward areas of America" and spread through the rural South by hiring people who were accustomed to farm work. Wal-Mart inspired fervent loyalty from customers by putting its stores in regions other retailers had ignored.

But it also drew condemnation for squashing smaller businesses in its path. Small-town business districts tended to empty out when Wal-Mart hit. Some areas responded by drafting anti-Wal-Mart zoning ordinances that keep out retailers of a certain size.

Today, "Wal-Mart creates its own weather," said John A. Challenger, chief executive of Challenger, Gray & Christmas Inc., a Chicago outplacement firm that tracks retail jobs. "It sets the standards in many ways for retailers throughout the country, which benchmark against them."

Kmart Corp., which dwarfed Wal-Mart only 15 years ago, filed for bankruptcy protection in 2002 and eliminated 57,000 positions in part because it tried to compete with Wal-Mart on prices and failed. FAO Inc., the iconic toy seller, filed for protection from its creditors in part because it did not try to compete with Wal-Mart on prices. Both retailers have since emerged from bankruptcy proceedings. And since Wal-Mart began aggressively expanding into groceries in the past decade, some national supermarket chains have gone bankrupt.

Wal-Mart's pressure to hold down labor costs also helps fuel the national market for undocumented workers, immigrant advocates say, as employers take advantage of laborers who are too fearful of being deported to object to substandard wages and conditions. Rather than hire illegal immigrants themselves, big chains typically turn a task such as janitorial services over to a low-bidding national contractor, which in turn farms the work out to smaller subcontractors. The subcontractors range from established firms that rigorously check workers' immigration status to one-man, fly-by-night operations that knowingly employ illegal workers, labor experts say.

Undocumented workers learn of the companies through word of mouth, foreign-language newspaper advertisements and Web sites. It was a Russian hostel owner in Brooklyn, for example, who directed 24-year-old Russian immigrant Misha Firer to a small company that cleaned a Wal-Mart in Pennsylvania. For two months, the undocumented worker lived in a trailer park and buffed the store's floors from midnight to 8 a.m. for $6 an hour -- $1 of which was seized by his boss, Firer said.

Even though Wal-Mart's roots are outside of food retailing, it's within the food sector that the non-unionized retailer is most affecting labor relations in this country, said Ira Kalish, a global director at Deloitte Research.

"The impact in terms of wage pressures is really in the supermarket industry because that's the one part of retailing that's heavily unionized," Kalish said. "Most others are not. For [a fashion retailer such as] the Gap, for instance, the issue is not so much labor costs as supply-chain efficiency, sourcing and rent."

But for supermarkets, which operate on razor-thin profit margins, labor is perhaps the highest cost of doing business, said Michael J. Silverstein, a senior vice president at Boston Consulting Group.

"The less you pay [for labor], the lower your prices can be," Silverstein said. "The grocery store is a war zone, and the weak are going down fast -- and with them go a lot of jobs."

Wal-Mart's supercenters have labor costs roughly 20 to 30 percent lower than those of unionized supermarkets, according to a study from consulting firm Retail Forward. As a result, groceries at Wal-Mart cost about 15 percent less than the competition, the study said.

Retail Forward concluded that for every Wal-Mart Supercenter that opens in the next five years, two supermarkets will close their doors. That means the supermarket industry could lose 2,000 more stores over the next five years, or 400 a year.

"It's unlikely that any other U.S. food retailer will catch up to Wal-Mart, even through a mega-merger," the report said. By 2007, the chain should capture 35 percent of supermarket industry sales and double the number of its supercenters to 2,250.

Wal-Mart is applying the same heavy pressure on grocery suppliers that it exerts on makers of other consumer goods, leaving them beholden to the retailing giant for a significant part of their revenue. Wal-Mart made up 30 percent or more of U.S. sales for Clorox Co., Gillette Co., Mattel Inc., and Procter & Gamble Co. in fiscal 2002, according to Fitch Ratings.

For retailers, competing with Wal-Mart means not just holding down wages, but curbing health care costs, which are becoming an increasing burden on employers nationwide.

A report by the AFL-CIO, which has tried and failed to organize Wal-Mart workers, said the retailer insures only about 45 percent of its workforce. Wal-Mart workers must pay about one-third of the cost of their health care premiums, while employees at other large companies typically pay 16 to 25 percent, the report said.

The result is that many Wal-Mart workers transfer the health care burden either to their spouse's employer or to government agencies, the report said.

Some employees at Minneapolis-based Target Corp., a non-union company once known for its generous employee benefits, say they believe price competition with Wal-Mart caused their employer to cut benefits as well.

In April, Target rolled out a new health care plan for 2004 that offered generous benefits, but only for employees who averaged more than 32 hours of work each week. Some Target employees say the company then hired more workers and reduced existing workers' schedules so they no longer qualified for the plan.

Wal-Mart workers have complained of similar strategies designed to keep them from qualifying for health coverage.

Lawsuits representing thousands of current or former Wal-Mart employees and focusing on wage and overtime pay as well as sex discrimination are on file around the country, along with dozens of complaints to federal labor regulators.

Wal-Mart defends its practices, arguing that its employees have generous access to insurance and that worker contributions to health care -- $57 per two-week pay period for a family plan -- are in line with the rest of the industry. The company does not quibble with AFL-CIO's wage numbers or health coverage statistics, "but they're only telling half the story," said Mona Williams, Wal-Mart's chief spokeswoman.

Forty percent of the employees who Wal-Mart insures had no medical benefits prior to joining the company, she said. "These are people who would have fallen through the cracks or been on public health rolls," she said, adding that some 62 percent of Wal-Mart's workers are eligible for benefits.

As for wages, Wal-Mart's entry-level jobs "are not designed for someone who is the sole support for a family" but for those looking to advance, she said. About two-thirds of Wal-Mart's managers were once hourly workers for the chain. Employee turnover is 50 percent, better than the 70 percent industry average, Williams said.

Maybe that's why union attempts to organize Wal-Mart employees have failed, Williams said.

"What we need to ask our competitors is: Can they be more efficient? Can they live more frugally?" she said. "Is paying people $15 to $17 [to stock shelves] realistic?"

Some analysts agree, saying Wal-Mart's strategies and success would not be possible without willing workers and the backing of penny-pinching consumers.

"You can't stay non-union unless you're giving people something. On balance it has to work out for employees," said Bernard Sosnick, an analyst at Oppenheimer & Co.

Kroger employees on a picket line this week in Morgantown, many of whom said they were making between $11 and $13 an hour, said they would never work at Wal-Mart. But most said they shop there. In the parking lot of the nearest Wal-Mart Supercenter, on a hilly cow pasture 19 miles south of Morgantown, Vivian Mullins and her daughter, Jennifer, wheeled out a cartload of groceries and said they have sympathy for Kroger workers. But they love their Wal-Mart.

"I applied to work there just the other day," said Jennifer Mullins, 18, currently working in a restaurant. "A lot of my friends I went to school with work there. They think it's great."

Staff writers Kirstin Downey and Michael Barbaro contributed to this report.

"Nigger Dave"

That's what they called him at Wal-Mart. His managers didn't seem to care.

October 15, 2003

Dave Thomas has found that justice is for those who can buy it.

The first time David Thomas was called a nigger, he'd spent just 45 days on the job. Two co-workers had taken to announcing that they hated "that nigger Dave" to anyone who would listen.

Thomas, an even-keeled and courteous man -- the kind who calls you "mister" -- had no idea what he'd done to piss the women off. "I didn't even know these people," he says. But everyone knew they were pissed. "They didn't care who heard it."

Two managers at the Elyria Wal-Mart called him into the office. "Did you hear anything?" they asked. He was told to write it all down. But as the weeks passed, the women continued to pronounce their hatred for "that nigger Dave."

"The first shift heard about it, the second shift heard about it," says Thomas. "People would come up to me and say, 'Are you hearing these things they're saying about you?'" When he asked managers if they were following up, they'd simply reply, "We're handling it in our own way."

But a few months later, it happened again. Thomas was working the overnight stocking shift when, for reasons no one can seem to explain, another woman called him a "black bitch."

"Almost the whole shift saw it," says coworker Denise Taylor. "There were like six or seven people there."

Thomas again went to his managers, who did nothing. So he called a Wal-Mart employee hotline. He went to store manager Keri Brown. He complained to the district supervisor.

"It was like talking to a piece of wood," he says. "That wood is not going to respond back to me. They would say, 'What do you want me to do?'" Brown, who now works at the Wooster store, won't discuss the matter. "Sorry, I can't talk to you about any of that."

But Thomas wasn't about to lie down. He launched a protest, simply refusing to come to work.

It was a militant move for a father of two who seems anything but rebellious. "David is the kind of person who will speak up for himself," says one co-worker, who asked not to be named for fear of retribution. "He never did it in a disrespectful way. He wouldn't call them out in front of anybody. He would pull them off to the side. He was a very hard worker; he wasn't a slacker."

Nor was he asking for much: just the courtesy of not being called nigger on the job.

Yet for all its achievements as the world's largest retailer, Wal-Mart remains a stunningly inept corporation. Judges have fined it so often for hiding and destroying records that it might aptly be called the Hillbilly Enron.

Particularly troubling is its labor history. It's been caught forcing employees to work off the clock. It's being sued by female employees who claim pervasive gender discrimination. (One was told by

her manager that "God made Adam first, so women would always be second to men.") And in California, a movement is afoot to require Wal-Mart to reimburse the state for public assistance.

Assemblywoman Sally Lieber says the company encourages employees to go on welfare to subsidize their poor wages and health benefits.

Wal-Mart's racial history is arguably worse. A jury found the company guilty of firing a white woman because she dated a black guy. The Alaska human rights commission found omnipresent racism at one store; workers would ask a black employee to "smile and show his teeth" to light trucks on the loading dock, among other insults.

Then there's the infamous Cleveland Heights incident. When $1,000 went missing in 1999, a manager conducted bathroom searches of 37 black employees. No white worker was questioned.

It's tempting to conclude that bad wages simply produce incompetent management. The average Wal-Mart employee earns about $11,700 a year (working 30-hour weeks, the company's threshold for full-time). That's $2,000 below the poverty line for a single mother with two kids. And management-recruitment fliers read more like punishment for a 4th-degree felony than they do career opportunities.

Enticements include uneven hours, forced overtime and transfers -- all for a few more cents an hour. It's a system designed to attract the children of a lesser Palm Pilot.

Yet Elyria supervisors were smart enough to fear their exposure with Thomas.

"If you leave your job for 28 days in a protest, any other job you'd be terminated," he notes. Instead, they called him at home, urging him to return, arguing there was no need to file a complaint. He went back to work.

Then it happened again. He was pushing a heavy pallet, when a co-worker walked in front of him. Thomas asked the guy to step around him instead. When they got to the front of the store, the co-worker said, "'Man, I can't stand that nigger Dave,' loud enough for everybody to hear, in front of customers," says Thomas.

Again he went to Brown. Then to district manager Ray Hartman, who said he would investigate.

A month went by. Nothing happened. Thomas called again. Hartman told him there never was an investigation, nor were any witnesses called. (Hartman could not be reached for comment.)

So Thomas went to the regional manager. "All she wanted to know after I told my story was, 'Dave, have you sought legal representation yet?'"

A month later he was fired. The official reason: too many absences. For all his troubles, conventional wisdom suggests that Thomas was sitting on a gold mine. He had been repeatedly called a nigger. There were many witnesses. Store managers had done nothing about it. Three of the four people who slurred him were still on the job. The fourth got fired only after he called a manager a spic, say employees.

Put it all in front of a jury, and you're looking at a monster payday.

But conventional wisdom would be wrong. Thomas is evidence. He filed a complaint with the federal Equal Employment Opportunity Commission, whose rules dictate that a problem must be "severe or pervasive" for it to act. Thomas's case would appear to meet that threshold -- especially since courtrooms across the land are littered with similar cases involving Wal-Mart. But after receiving a letter from the company explaining its side, EEOC case worker Brian Shelton dropped the matter. He never investigated, nor did he call any of Thomas's witnesses.

It's hard to say whether Thomas simply didn't explain his situation well enough, or whether Shelton, overworked and weary of hearing so many false cries of wolf, simply blew it off. EEOC district director Mike Fetzer won't discuss the case, though he admits the agency has "historically been underfunded . . .

Some people refer to it as a triage system."

None of which helps Thomas. He's tried to find a lawyer who will take up his cause, but he can't afford a retainer. Such is the fate of an unemployed man with two kids to feed. Like most people who encounter the law, he's found that justice is for those who can buy it.

These days, he spends his time at home, taking care of the kids. His wife has two jobs, but the best Thomas can get is occasional work resurfacing floors. "It's so hard up here in Lorain County, because everything is shutting down."

There is anger in his voice, but not the acidic tang one might expect. It's more a sense of incredulousness that a man can be screwed so blatantly, repeatedly, and no one will rise to his aid.

"I went to the proper authorities," he says. "Nothing happens. I went to the store manager. Nothing happens. I went to the EEOC. Nothing happens."

This is the true conventional wisdom.

Standing against bias
Stacy A. Teicher Staff writer of The Christian Science Monitor
October 27, 2003

Guess the era:

* A previously coed troupe that entertains fans at sporting events runs 
job ads seeking "males with athletic ability and talent."

* A female employee at a home-improvement store is assigned to a cash 
register, despite previous experience in a lumberyard that would 
qualify her for a sales-floor job (the springboard for promotions).

* A woman asks her boss why men in similar jobs earn more money. His 
reply: They have families to support.

If you said the 1960s or '70s, try again. All three incidents took 
place in the past 10 years. The first two resulted in payments to the 
affected women and agreements by the companies to try to eliminate 
discriminatory practices. The third stems from a lawsuit against 
Wal-Mart now working its way through the courts.

More than 100 women have submitted statements to the US District Court 
in San Francisco, charging discrimination in the form of unequal pay 
and barriers to promotion. If their request to classify this as a 
class-action suit is granted, the class would include 1.6 million women 
who have worked at Wal-Mart since 1998.

That would make it the largest employment class-action suit in United 
States history - one that would have "seismic impact," says Adam 
Forman, an attorney with Testa, Hurwitz, & Thibeault in Boston, which 
is not involved in the case.

The potential for a full battle in court ora gargantuan settlement has 
lawyers and employers alike watching from the edges of their seats. And 
the case could bring sex discrimination to the public's attention in a 
way not seen since Anita Hill's accusations against Clarence Thomas in 
1991 forced a national conversation on sexual harassment.

However the case is resolved, it raises the specter of gender 
stereotypes that many assume had disappeared long ago.

"We don't hear very much anymore of people willing to say women should 
be home with their children, or a man should make more because he's 
supporting [a family] ... but the notion of women not being interested 
[in certain jobs] is still quite pervasive," says Joyce K. Fletcher, a 
professor at Boston's Simmons School of Management and its Center for 
Gender in Organizations.

Those more subtle stereotypes "are so embedded in the culture that it 
just seems like common sense, it doesn't seem like bias," she says.

No one denies women's overall advancement in the past few decades. In 
1966, women constituted 31 percent of employees but only 9.3 percent of 
officials and managers at companies with more than 100 workers, 
according to the Equal Employment Opportunity Commission (EEOC). By 
2002, women accounted for 48 percent of employees and 36.4 percent of 
officials and managers.

But sex discrimination remains the second most common type of complaint 
to the EEOC (after race) - with about 25,000 filed each year, the vast 
majority from women.

One reason sex discrimination persists is that class-action lawsuits 
often end in monetary settlements, without much monitoring of the 
improvements a company is supposed to make afterward, says Michael 
Selmi, a law professor at George Washington University and author of a 
recent Texas Law Review article on key discrimination suits.

But firms can make significant changes if their leaders see value in 
eliminating exclusionary practices that are bad for business, he says. 
"There have to be rewards for diversifying the workforce, for having 
more women in management.... There has to be a commitment that it's the 
right thing to do."

Fair shake' sought

To the women suing Wal-Mart, promotions there have been anything but 
fair. Christine Kwapnoski had been working at Sam's Club (owned by 
Wal-Mart) for 15 years when she became one of the named plaintiffs in 
June 2001. "There have been a ton of guys promoted over me, time and 
time again," she says in a phone interview from her home in Concord, 
Calif. When she asked her manager why men with significantly less 
experience were earning higher pay and promotions, she says he told her 
that the men had families to support. It's a story echoed by other 
plaintiffs, and it especially stung Ms. Kwapnoski, who pays child 
support for a 14-year-old and a 10-year-old.

Within weeks of the lawsuit being filed, Wal-Mart promoted Kwapnoski, 
and this year she entered the management training program. But she 
hopes the lawsuit will help other women, too. "I don't want them to 
just promote women out of fear," she says. "We just want a fair shake. 
I've seen a lot of women managers who were really good who got run out 
of town ... and that's what I'd like to stop."

Women made up about 65 percent of the hourly staff at Wal-Mart, but 
only 33 percent of salaried management - and at each rung up the 
ladder, women's representation drops, according to a report submitted 
by the women's attorneys.

Wal-Mart offers a different analysis. "Wal-Mart does not tolerate 
discrimination against women or anyone else," says Sarah Clark, a 
company spokesman, in an e-mailed statement. "When you look at 
Wal-Mart's growth and the fact that we promote women at the same rate 
they apply for jobs - or better - you can see that Wal-Mart provides 
more opportunities for women than any other employer in the country."

Ms. Clark would not comment specifically on the lawsuit. But in court, 
Wal-Mart presented data to show that any alleged problems were related 
to individual stores and did not represent a companywide pattern.

Traditional roles

Some argue that the label "discrimination" can be slapped onto 
situations too quickly. "Sometimes women make less [money] not because 
of discrimination, but because they've taken time off to be with their 
kids.... Or a woman might decide she needs flex time and that might 
keep her out of a management position," says Charlotte Hays, senior 
editor at the Independent Women's Forum in Washington, D.C.

If companies want to retain more women and see them advance to top 
jobs, Ms. Fletcher says, they may need to examine how those jobs are 
defined. "Is it because it's the best way for getting that work done, 
or is it defined in the way that men have always done it, because of 
their particular life situation in our society?"

In 1973, Sears was charged with not hiring women and men on an equal 
basis for sales-commission jobs, which yielded higher pay. Sears argued 
that most women weren't interested in such jobs. With only statistics 
to go on and no "smoking gun" testimony from women, the case was 
finally resolved in favor of Sears in 1988.

A few years later, anecdotes did accompany statistics in a class-action 
suit against Home Depot's western division. About 70 percent of the 
sales-floor jobs were held by men, while 70 percent of cashiers were 
women - including the one who had worked in a lumberyard. While not 
admitting discrimination, Home Depot settled that and several smaller 
claims for $104 million in 1997. It also made some changes. Instead of 
managers steering people informally into jobs, openings are now posted 

Company leaders should know by now to examine their policies and make 
sure there isn't room for decisions based on stereotypes, says Nancy 
Dowd, a law professor at the University of Florida in Gainesville. 
"Anytime there's a word-of-mouth, informal way that promotions occur, 
that's a huge red flag you've got to deal with.... It might be OK ... 
but you have to make sure the mentoring and opportunity structures are 
truly open and nondiscriminatory."

[Editor's note: The original version of this story included a chart of 
top five sex-discrimination class-action settlements.]

Supervisor defends big box limit 
By Peter Felsenfeld - CONTRA COSTA TIMES
October 28, 2003

WALNUT CREEK - Anti-tax advocates gave Contra Costa Supervisor John Gioia of Richmond a chilly reception Monday as he outlined a controversial measure to limit large retailers.

Foreshadowing what promises to be a bitter political fight this winter, members of the Contra Costa Taxpayers Association said supervisors have placed a sloppily worded referendum on the March 2 ballot to please their union supporters.

"I doubt the supervisors voted for this after a careful, objective analysis," said Henry Alker, president of the Black Diamond Coal Mining Company. "I suspect they are facing very strong pressure from the unions to protect union jobs."

Gioia defended the measure as an important planning tool and a vehicle to protect Contra Costa tax dollars. Supervisors approved it in June, but Wal-Mart soon collected enough signatures to force the board to rescind the ordinance or place it before voters.

The measure would prohibit so-called "big box" stores larger than 90,000 square feet from dedicating more than 5 percent of shelf space to nontaxable items such as groceries. It would only apply to retailers in the county's unincorporated areas. Martinez and Oakland have similar ordinances.

A coalition of labor and community groups says Contra Costa's ordinance helps protect small neighborhood merchants from the jaws of giant supercenters.

Though Wal-Mart is not mentioned in the measure, the retail chain contends it is the target. The store's workers are not unionized.

Gioia, addressing the taxpayer group at the Renaissance ClubSport Hotel, veered away from labor arguments, stressing instead the measure's land-use impacts.

The grocery section of Wal-Mart "does not generate substantial sales tax revenue, but studies show it does add car trips," Gioia said. "Why should taxpayers be stuck paying for road improvements and maintenance for trips these stores generate?"

Wal-Mart's arguments resonated with the county's top tax group. Stores like Wal-Mart make Contra Costa a more affordable place to live by offering discounted items, said association president Larry Lippow.

"Supervisors are placing restrictions on this enterprise when they should be encouraging it," he said.

Afterward, Gioia acknowledged that unions support the law. However, he said its impacts would benefit all Contra Costa residents.

"I agree with many of labor's issues on this, I don't deny it," Gioia said. "But they didn't pressure me."

Cleaner at Wal-Mart Tells of Few Breaks and Low Pay

25 October 2003 - The New York Times 

Every night for months, Victor Zavala Jr., who was arrested on Thursday in a 21-state immigration raid, said he showed up at the Wal-Mart store in New Jersey to clean floors.

As the store's regular employees left at 11 p.m., Mr. Zavala said, they often asked him whether he ever got a night off.

Mr. Zavala, identified by federal agents as an illegal immigrant from Mexico, told the Wal-Mart workers that he and four others employed by a cleaning contractor worked at the Wal-Mart in Old Bridge every night of the year, except Christmas and New Year's Eve.

Now Mr. Zavala feels cheated, saying he worked as hard as he could pursuing the American dream, only to face an immigration hearing that could lead to deportation for himself, his wife, Eunice, and their three children, 10, 7 and 5 years old. He was one of 250 janitors employed by Wal-Mart contractors who were arrested at 60 Wal-Mart stores before dawn on Thursday.

''My family's not happy about this,'' said Mr. Zavala, who said he paid a ''coyote'' $2,000 to smuggle him into the United States three years ago. ''My children do not want to leave and go back to Mexico.''

A federal law enforcement official who spoke on condition of anonymity said yesterday that several current and former cleaning contractors for Wal-Mart, the nation's biggest retailer, were cooperating with the government in its investigation. On Thursday, federal officials acknowledged that they had wiretaps and recordings of conversations and meetings among Wal-Mart executives and contractors.

Federal officials said that as part of the Thursday raid, they searched the office of a middle-level manager at Wal-Mart's headquarters in Bentonville, Ark. The officials said the government believed that Wal-Mart executives knew the cleaning contractors were using illegal immigrants.

Federal officials noted that 102 illegal immigrants working for Wal-Mart cleaning contractors had been arrested in 1998 and 2001 and that 13 Wal-Mart cleaning contractors had pleaded guilty after those arrests. Those pleas remain under court seal.

Wal-Mart said yesterday that it had begun an internal investigation and would dismiss anyone in its work force who did not have proper immigration papers. Wal-Mart also told its officials to preserve any documents that might be relevant to the federal inquiry, which is being conducted by the Department of Homeland Security's division of Immigration and Customs Enforcement.

Wal-Mart officials said that the raid surprised them, and that they had no idea the company's cleaning contractors used illegal immigrants.

They acknowledged yesterday that 10 immigrants arrested on Thursday in Arizona and Kentucky were employed directly by Wal-Mart. Company officials said they had brought these workers in-house after certain stores phased out the use of the contractors for whom the immigrants had worked.

Wal-Mart officials also said the company required its contractors to hire legal workers only.

''We have seen no evidence thus far that anyone in Wal-Mart is involved in any scheme involving illegal workers,'' Tom Williams, a company spokesman, said.

Government officials and Walmart executives declined yesterday to name the cleaning contractors whose employees were arrested.

''These arrests are part of the Immigration and Customs Enforcement mission and part of our continuing commitment to investigate companies that are hiring individuals who are not authorized to work in the United States,'' said Garrison Courtney, a spokesman for the immigration agency.

Federal officials said yesterday that the leading nation of origin for the janitors caught in Thursday's raids was Mexico, with 90. The Czech Republic was second with 35, followed by Mongolia with 22, Brazil with 20. Uzbekistan, Poland, Russia, Georgia and Lithuania each had about a dozen.

Mr. Zavala, the janitor in Old Bridge, N.J., said he got his job shortly after arriving in the United States, when a neighbor asked whether he wanted work cleaning buildings. Mr. Zavala, 28, said he did not know the name of his boss.

Mr. Zavala said he believed that the Wal-Mart managers knew the janitors were illegal immigrants.

''Deep in their minds, of course the store managers knew it,'' he said. ''The other guys from the crew didn't speak one word of English. Of course they knew it, but if you asked them, they'll say 'we thought they were citizens or residents.' ''

Mr. Zavala said the contractor that he and Eunice, his wife, worked for paid them $400 a week each for working 56 hours. That would come to $6.25 an hour if time and a half overtime is included for all hours worked in excess of 40.

''We don't know nothing about days off,'' said Mr. Zavala, whose hometown is Mexico City. ''We don't know nothing about nights off, we don't know health insurance, we don't know life insurance, and we don't know anything about 401(k) plans.''

He said that when he was arrested and taken to a detention center in Newark, immigration officials mocked him for taking a job that paid so little in a state where rents and living expenses are so high. He said that in his 16 months as a cleaner at Wal-Mart, he was given only two nights off.

He said he did not think that the contractor withheld taxes from his pay, raising questions about whether the contractor was making the required contributions for Social Security and unemployment insurance.

Misha Firer, an illegal immigrant from Russia, said he worked for three months last year as a cleaner at Wal-Marts in Ephrata, Pa., and Glens Falls, N.Y., working 90 consecutive days without having a day off.

Mr. Firer said that he earned $6 an hour, working the midnight-to-8 a.m. shift, washing, waxing and buffing floors. He said the chemicals were so strong that some workers had nose bleeds, sore eyes and skin irritations.

''Nobody wanted to take the job,'' he said. ''It was a night job and it paid very little.''

Wal-Mart Raids by U.S. Aimed at Illegal Immigrants 
Published: October 24, 2003

Federal agents raided 60 Wal-Mart stores across the nation yesterday and said they arrested more than 250 illegal immigrants who worked as janitors for outside contractors used by Wal-Mart, the world's largest retailer.

As part of the 21-state raid, the largest immigration crackdown in years, federal agents also searched the office of an executive at Wal-Mart's headquarters in Bentonville, Ark., and removed boxes of documents, company and government officials said.

One federal official, who spoke on condition of anonymity, said that a grand jury was investigating the matter and that the government believed that Wal-Mart officials knew about the widespread use of illegal immigrants. The official said the government had used wiretaps in the investigation and had recordings of conversations among Wal-mart executives and contractors.

Wal-Mart officials were quick to acknowledge the raids and said that the arrested workers were employed by contractors and that Wal-Mart required those contractors to employ only legal workers.

Tom Williams, a Wal-Mart spokesman, said the raid and the allegations that illegal immigrants were used in its stores came as a surprise.

"We've seen no evidence from the Immigration Service that anyone in Wal-Mart was involved in any scheme involving illegal workers," Mr. Williams said.

He said he believed that the manager whose office was raided worked in Wal-Mart's building services division.

The workers who were arrested were finishing the night shift before dawn, said Garrison Courtney, a spokesman for the division of Immigration and Customs Enforcement. Most are from Eastern Europe or Latin America.

Mr. Courtney said federal officials had originally sought to arrest 300 of the janitorial workers when the raids began around 4 a.m. yesterday, but were able to arrest slightly more than 250. The employees now face deportation.

Immigration experts said the arrests of so many illegal immigrants at Wal-Marts across the country demonstrated that these workers have come to play a significant role in the American economy. They often take the low-end, low-paying jobs shunned by not just American workers, but also legal immigrants.

Yesterday's arrests came after a five-year period that saw federal immigration authorities greatly scale back the number of company raids. Particularly since the Sept. 11 terrorist attacks in New York and Washington, federal officials have focused their immigration arrests on facilities, like airports, that might be terrorist targets.

"This is the biggest raid in a few years," Mr. Courtney said. "This is the result of almost a four-year investigation. We're a law enforcement agency, and we're going to enforce the laws."

Federal law enforcement officials said the investigation grew out of earlier raids in 1998 and 2001 when about 100 illegal immigrants were arrested working at Wal-Mart stores in New York, Pennsylvania, Ohio and Missouri. These officials said that after those arrests, 13 Wal-Mart cleaning contractors pleaded guilty to knowingly employing illegal immigrants.

Mona Williams, Wal-Mart's vice president for communications, said: "These federal officials are referring to third-party suppliers that we entrusted to hire legal workers. For them to say that it strains credibility that we're surprised about what happened today, those other actions happened years ago."

Mr. Courtney said that if federal officials found substantial evidence that the cleaning contractors or Wal-Mart officials knowingly employed illegal immigrants, they could face criminal charges, including fines up to $10,000 per illegal worker. He said he did not know the name of Wal-Mart's cleaning contractors or of the Wal-Mart executive whose office was searched.

In a statement, Immigration and Customs Enforcement said, "The investigation is ongoing," and said the arrests were part of "ongoing efforts to ensure that U.S. companies do not employ individuals who are unauthorized to work in the United States."

Wal-Mart officials said the company used about 100 contractors to clean about 1,000 of its American stores. They said they did not know whether one contractor or many employed the arrested workers.

Wal-Mart is not the first company to face immigration issues. A three-year-old lawsuit against several California supermarkets asserts that the supermarkets and their cleaning subcontractors violated minimum wage and overtime laws in using illegal immigrants to clean their floors.

The Mexican American Legal Defense and Education Fund, which filed that lawsuit, asserted that some workers were paid less than the $5.15-an-hour minimum wage and that many were never paid overtime even after working 55-hour weeks.

The cleaning contractors involved in that case often asserted that those workers were independent contractors and not employees and thus were not covered by minimum wage or overtime laws.

Mr. Courtney said he did not know whether Wal-Mart's cleaning contractors had violated wage laws. He said the Department of Labor had not participated in the investigation.

Wal-Mart has 1.4 million employees worldwide and had $245 billion in revenues last year. Each week 138 million shoppers visit Wal-Mart's 4,750 stores.

In recent years, Wal-Mart has frequently been accused of skirting various federal employment laws.

Class-action suits have been filed in more than 30 states charging Wal-Mart supervisors with pressuring employees to work off the clock. In California, lawyers have filed a lawsuit accusing Wal-Mart of discriminating against female employees in its promotions. The lawyers have asked a federal judge in San Francisco to allow the lawsuit to proceed as a class action, potentially creating a class of 1.6 million current and former Wal-Mart employees.

Wal-Mart denies pressuring employees to work off the clock and asserts that it has an aggressive program to hire and promote women.

The raids yesterday were carried out in Alabama, Arkansas, Arizona, Connecticut, Delaware, Kentucky, Massachusetts, Maryland, Michigan, North Carolina, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.

Immigration officials said their investigation focused on forms, known as I-9's, that employers are required to use to determine the eligibility of their workers.

Ms. Williams said the company was assessing the situation.

"We first learned about the raids when store managers at affected stores began calling us," she said.

Wal-Mart Knew of Illegal Workers
The Associated Press
LITTLE ROCK, Ark. Oct. 24, 2003

Wal-Mart had direct knowledge of immigration violations involving its cleaning contractors at stores across the country, federal law enforcement sources said. Federal agents raided Wal Mart's headquarters and 60 of its stores across the nation Thursday, arresting more than 300 illegal workers in an immigration crackdown at the world's biggest retailer.

The workers were members of cleaning crews hired by outside contractors, but federal law enforcement officials who spoke to The Associated Press on the condition of anonymity said Wal-Mart knew of the violations. They cited recordings of meetings and conversations among Wal-Mart executives, managers and contractors.

"We have seen no evidence of this from the INS, and, if that turns out to be true, we will cooperate fully with law enforcement officials," Wal-Mart spokeswoman Mona Williams said.

The workers were arrested as they finished their night shifts at Wal-Mart stores in 21 states. Agents also hauled away several boxes of documents from an executive's office at Wal-Mart headquarters in Bentonville.

An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee recordkeeping regulations.

Wal-Mart Stores had sales last year of $244.5 billion. The company has about 1.1 million employees in the United States, and it uses more than 100 third-party contractors to clean more than 700 stores nationwide, Williams said.

"We require each of these contractors to use only legal workers," she said.

The law enforcement sources said the investigation grew out of earlier probes of Wal-Mart cleaning crew contractors in 1998 and 2001.

All the arrested workers were in the country illegally, said Garrison Courtney, a spokesman with Immigration and Customs Enforcement. They were detained at local immigration offices. Those who had no criminal record were released with instructions to appear before immigration judges.

Wal-Mart is not the first big company to be targeted in an immigration investigation. Six managers at Tyson Foods, based one town away from Wal-Mart in Springdale, were charged in an immigrant-smuggling case in 2001.

One defendant shot himself to death a few months after being charged, and two managers entered guilty pleas early in the case. A jury acquitted the poultry company and three other managers.

Ulysses A. Yannas, an analyst with the investment firm Buckman, Buckman and Reid, said it is too much to expect Wal-Mart to keep track of all of its vendors' workers. But he said the investigation could present a problem for the company.

"It is a question of what else it might bring out. These are long, drawn-out processes," Yannas said.

Top Wal-Mart officials learned of Thursday's sweep when store managers began calling headquarters for guidance in dealing with the raids.

Courtney said agents searched the office of one of Wal-Mart's executives. Williams, the spokeswoman, said they spent several hours in the office of a "mid-level manager" at Wal-Mart's headquarters and carried away several boxes of paperwork.

She said she did not know if any other Wal-Mart administrative offices were searched.

The arrests were made at stores in Alabama, Arkansas, Arizona, Connecticut, Delaware, Kentucky, Massachusetts, Maryland, Michigan, North Carolina, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.

Suzanne Gamboa in Washington, D.C., contributed to this story.

October 6, 2003 - DAILY LABOR REPORT

TEXT: Several claims in a class action brought by widows of former Wal-Mart Stores Inc. employees challenging a program in which Wal-Mart purchased corporate-owned life insurance policies (COLIs) on the lives of more than a thousand employees survived dismissal by the U.S. District Court for the District of New Hampshire Sept. 30 (Rice v. Wal-Mart Stores Inc., D.N.H., No. 02-390-B, 9/30/03).

According to the court, Wal-Mart used the names and confidential medical information of employees in purchasing COLIs without the employees' knowledge or consent.

Vicki Rice and Patricia Keenan brought the action on behalf of a class of New Hampshire citizens whose lives were insured by COLI policies purchased by Wal-Mart and issued by AIG Life Insurance Co. or Hartford Life Insurance Co. The plaintiffs are seeking to recover any life insurance benefits that were paid to Wal-Mart under the program, any premiums paid to the insurer, and any damages that class members suffered as a result of Wal-Mart's use of their names and confidential medical information.

Chief Judge Paul Barbadoro dismissed several of the widows' claims, while allowing other claims to proceed.

Dismissed Claims.

The court dismissed the widows' claim that they were entitled to a declaratory judgment that Wal-Mart lacked an insurable interest in the lives of any class member who was insured in the COLI program. Because the class members were not insurers, they had no ability to raise this challenge, the court found.

The court also dismissed the breach of contract claim, where the widows alleged that Wal-Mart breached the implied duty of good faith inherent in the employer relationship when it used employees' information to purchase COLI policies. The widows did not allege that the COLI policies interfered with Wal-Mart's duty to pay the employees salary or benefits, the court said. "Although Wal-Mart's COLI program may have exposed it to liability on a tort theory, it did not violate Wal-Mart's contractual duties to its employees," the court said.

In addition, the court dismissed a commercial appropriation claim, saying Wal-Mart did not exploit the employees' reputations or prestige when it purchased COLI policies in their names.

Surviving Claims.

The court allowed to proceed the widows' claim of intrusion upon seclusion. This claim requires that the intrusion relate to something private, and Wal-Mart needed to realize that its conduct was offensive, the court said. Rejecting Wal-Mart's argument that the employees voluntarily gave them the information, the court said this did not permit Wal-Mart "to use that information however it desires without potentially intruding upon the privacy rights of its employees."

The breach of fiduciary duty claim also was allowed to proceed. The widows claimed that Wal-Mart breached its fiduciary duty to employees by taking advantage of personal and confidential medical information to purchase COLI policies. The widows' allegations that Wal-Mart abused its relationship by misusing the employees' information and that Wal-Mart profited by this breach of fiduciary duty was enough to sustain this claim, the court said.

The court also allowed the unjust enrichment claim to proceed, because the widows alleged that Wal-Mart was liable in that it took the benefit from the employees without their knowledge or consent.

David P. Slawsky of Upton & Hatfield in Concord, N.H., represented the widows. William D. Pandolph of Sulloway & Hollis in Concord, N.H., and Jeffrey W. Moss of Zevnik Horton in Boston represented Wal-Mart.

Oakland City Council approves ban on 'big-box' grocery stores
By Terence Chea 
October 22, 2003 - ASSOCIATED PRESS

SAN FRANCISCO Oakland has become the latest California community to ban Wal-Mart "Supercenters" that sell discount groceries alongside other bargain goods.

The Oakland City Council voted 7 to 1 Tuesday night to approve a measure to limit the size of "big-box" grocery stores allowed in the city. The ordinance bars discount retail stores with full-service supermarkets that exceed 100,000 square feet, or about 2.5 acres.

The measure targets Wal-Mart Supercenters gigantic shopping centers that average 187,000 square feet, about twice the size of the typical Wal-Mart store. Since introducing the concept in 1998, Wal-Mart Stores Inc. has opened 1,258 Supercenters in 43 states, but none in California.

Starting next year, Wal-Mart plans to open 40 Supercenters in California over the next four years, but the Bentonville, Ark.-based retailer is running into resistance from communities worried about their impact on traffic, open space, jobs and local business.

"Supercenters are going into communities and doing damage to local economies," said Council President Ignacio De La Fuente, who sponsored the Oakland measure with Councilmember Jane Brunner.

"They say they bring jobs and sales tax, but they put local stores out of business," De La Fuente said Tuesday night. "The reality is they drain the life out of our neighborhood commercial areas."

Opponents say Wal-Mart doesn't provides adequate health insurance coverage for its employees, straining local health care services. Labor leaders worry that nonunion Supercenters will pressure traditional supermarkets to lower wages or fire well-paid workers to stay competitive.

Wal-Mart spokeswoman Amy Hill insisted that Wal-Mart helps communities by offering lower grocery prices. She also said that the company offers all employees competitive wages and benefits.

While Wal-Mart found the ban disappointing, Hill said the decision "is not curbing our plans for the state."

"In some respects I think it's unfortunate that the city council or board of supervisors is trying to protect some special interest groups, to the detriment of consumers," Hill said.

Contra Costa County, with nearly one million people east of San Francisco, has passed a similar ban on Supercenters, but Wal-Mart hopes to overturn the measure with a referendum in March. Officials in California's largest city, Los Angeles, are discussing a measure that would block or discourage big-box grocery stores.

The Oakland ordinance does not affect smaller big-box grocery stores, such as Costco and Sam's Club, or large retail stores that don't sell groceries.

Council members said the measure is narrowly focused, and that the city isn't trying to turn away other big-box retailers. The council will vote again on Nov. 4 to confirm passage of the Oakland ordinance.

"It's the largest California city where an ordinance like this has passed," said Daniel Beagle, spokesman for the United Food and Commercial Workers Local 870, which represents grocery store employees in Alameda County. "It's sending a message to Wal-Mart that Oakland doesn't want that kind of predatory competition."

Up Against The Wal-Mart
Jonathan Tasini is the national director of American Rights At Work.

What country has $245 billion in revenues, a population of 1.4 million, is one of the worst abusers of workers' rights and is committed to ruining the economy of the United States? Don't think too hard because this is a trick question—I'm not really describing a country but the economic power and behavior of Wal-Mart.

What made me think of Wal-Mart was the strike by 70,000 grocery clerks in Southern California, now in its second week. From San Luis Obispo in central California all the way down to San Diego, the three largest California supermarket chains—Ralphs, Vons and Albertson—locked out the clerks for demanding wage freezes, cuts in health care and a lower starting pay for new hires. The supermarket chains cite Wal-Mart's five-year plan to open 40 super-centers in California as the main reason they are seeking to effectively drive yet another group of workers out of the middle-class. I don't entirely buy the supermarkets' line—companies are forever citing some economic external threat to justify battering workers, while leaving corporate perks quite generous, thank you.

But, there is a point here—Wal-Mart is a blight on the country. As an employer, it is virulently anti-union, relishes high-turnover as a tactic to keep workers from exercising their democratic rights on the job and it employs more than 70 people full-time to break union organizing efforts. The National Labor Relations Board—no friend of workers—filed more than 40 complaints against Wal-Mart from 1998 to 2002, charging the company with illegally firing workers, intimidating union supporters and threatening workers that they would lose bonuses if they unionized.

It faces the largest sex discrimination case in history with perhaps 700,000 plaintiffs who could be owed billions of dollars. According to a recent article by Steven Greenhouse of The New York Times, Wal-Mart imported $12 billion of goods from China, accounting for a staggering one-tenth of American imports from that country. You can see the evidence in small ways—the company's health plan will not cover child vaccinations.

It's a company that takes a chunk out of people, not once but twice in a vicious economic cycle. Workers shop at Wal-Mart for obvious reasons—low prices. Those low prices encourage the trade of goods from countries where workers labor in slave-like conditions (i.e., Wal-Mart keeps buying up more cheap goods). But the low prices also drag down wages in the United States because, as the Southern California grocery strike shows, companies jump onto the bandwagon and demand that workers agree to wage and benefit cuts for real or fictitious competitive pressures.

So, yes, some of our shopping habits end up cutting our own economic throats. But, we should not blame people who shop at Wal-Mart anymore than we should blame workers who work for a company that pollutes the environment. Workers flock to Wal-Mart because they are squeezed every day to stretch a meager paycheck.

But, the point of this rant is not just to flail away at Wal-Mart. It is to say it doesn't have to be that way. As David Morris, a creative thinker on the economy and society (and vice-president of the Institute for Local Self Reliance), points out, people wear different hats in society: wage earners, consumers, citizens and taxpayers. "The hat we need to wear when it comes to Wal-Mart is our citizen hat," he says. "Wal-Mart is as anti-union as any nation around the world but we allow Wal-Mart to set-up around the country and force other employers to cut wages. We should establish rules that do not allow Wal-Mart to compete like that."

Whoa. Rules against union-busting? Rules against firing workers, suppressing wages and widespread discrimination, all passed into law for the common good? Indeed, we have, as a nation, passed trade laws that set some labor standards by which other nations must abide in order to trade with the United States (that those labor standards are often not enforced and are inadequate is another story). Why should the same standards of respect for the right to organize unions that we demand of China not hold true for corporations doing business in the United States?

Finally, there is a powerful alliance to be made here. Labor unions, for obvious reasons, want to halt Wal-Mart's appalling persecution of its workers. Environmentalists are alarmed at Wal-Mart's role in quickening the pace of suburban sprawl. Small businesses are a natural ally because they feel the heavy Wal-Mart boot crashing down on their necks, driving them into bankruptcy throughout the nation. That coalition work has already begun. It should thrive and grow.

Wal-Mart's benefits come under fire 
October 19, 2003

When Pamela Robasciotti was a cosmetics department manager at Wal-Mart, she had to borrow money from her boyfriend or parents to pay for the $25 inhalers she uses to control asthma attacks.

On a wage of $9.27 per hour, every expense stretched her pocketbook. But the prescription cost seemed particularly unfair. Robasciotti already paid about $130 per month for Blue Cross HMO health care coverage.

"They take $130 a month out ... plus the pay wasn't really good," said Robasciotti, a 45-year-old Gilroy resident who worked in the town's Wal-Mart for more than six years. "I just got tired of it."

Robasciotti illustrates Wal-Mart Stores Inc.'s tough approach to benefits, an approach that has its employees paying more for health-care than most workers across the country, including their peers at other large retailers. It's a key part of the Wal-Mart cost-cutting model that has helped the retailer grow into the largest company -- and employer -- in the world.

But Wal-Mart's health insurance strategy is acquiring a growing number of critics. A San Jose assemblywoman claims health benefits are so unaffordable that workers instead sign up for government health care at the urging of the retailer. And perhaps the most visable opponents are the 70,000 striking Southern California grocery workers, who blame the retail giant for forcing their traditional grocery employers to phase out one of the best health benefits packages in the retail industry.

A new law could drastically change Wal-Mart's strategy in California. The retailer will have to pay for a greater chunk of health care premiums under the sweeping health insurance expansion bill that Gov. Gray Davis signed earlier this month. The cost could prompt Wal-Mart to scale back its ambitious growth plans in the Golden State, curb hiring at existing stores or automate jobs, industry observers say.

"Wal-Mart picks its battles strategically," said Gary Giblen, director of research at C.L. King & Associates, a New York investment research firm. "They're going to focus less on an area where they're competing less advantageously."

Research shows that Wal-Mart spends less money on health care coverage than retailers and non-competitors. Wal-Mart spent an average of $3,500 per worker for health benefits in 2002. That's compared with $5,646 per worker for all employers and $4,834 per worker in the wholesale and retail industries, according to Mercer Human Resource Consulting.

Nearly 80 percent of Wal-Mart workers in California have coverage through an HMO. On average, they pay $106 per month for the insurance premium.

That relatively high cost becomes even more expensive considering that Wal-Mart's hourly wage is at the low end of the industry. Wal-Mart will not give exact wage figures, but workers at Bay Area stores say the starting salary ranges from about $8 to $8.25 per hour, although it can go higher if a worker has special skills or experience. By comparison, the lowest paying job at Safeway, Albertson's and other unionized traditional grocer chains starts at $8.39, and Costco starts workers at about $10 per hour. Most importantly, workers at those stores move up the pay scale more quickly than Wal-Mart employees.

Wal-Mart officials say it's unfair to compare Safeway Inc. and Albertson's Inc. store workers to Wal-Mart workers ("associates" in Wal-Mart's parlance) because the retail giant isn't a direct competitor with the traditional grocers. But the only significant difference in the work forces is that Safeway and Albertson's workers are members of the United Food and Commercial Workers, which gives them more leverage to maintain their pay and benefits.

Unionized California grocery stores cover the entire cost of health care premiums for all store workers. These employees pay a $10 co-pay to see a doctor. Branded prescriptions cost them $6; generics cost $3. On top of the $106-per-month premium fee that the average Wal-Mart worker contributes, they also pay $15 for doctor visits, $5 for generic drugs and as much as $25 for branded prescriptions. Wal-Mart has been successful in keeping unions out of all its stores.

At Costco, which is partially unionized, workers pay for 8 percent of their total health care costs, while Wal-Mart store workers chip in about one-third of the cost. A new full-time Costco worker can sign up for benefits in half the time that a comparable Wal-Mart worker can. For part-time workers, Costco employees get their benefits in one-fourth the time.

Wal-Mart does offer health insurance with a monthly premium as low as $26 per month for an individual plan. But under that coverage, the worker pays up to $1,000 per year before the plan starts paying for part of any medical charges.

"Our argument is that our coverage is intentionally planned for those kinds of catastrophic issues," said Bob McAdam, Wal-Mart's vice president of government relations.

Wal-Mart officials say that although their health benefits package may not be as good as some competitors, they do offer a profit-sharing plan, a company-funded 401(k) and ample opportunities for advancement.

More than half of store workers in California subscribe to Wal-Mart's health benefits. McAdam said 40 percent get benefits from other sources including parents or spouses.

But Assemblywoman Sally Lieber, D-San Jose, has a different theory on how those workers are getting their health costs covered. In July, Lieber unveiled Wal-Mart employee hand-outs telling workers how to use an employment verification service when applying for social services like Medicaid, food stamps and temporary assistance to needy families. Lieber called it proof that the retailer is asking the state and federal government to make up for what she calls "poverty" level wages and thin benefits.

"We have been in the worst budget crisis that California has faced since the Great Depression," Lieber said. "In that context, we can't keep large, wealthy corporations on the dole."

The pages in the worker information hand-out explain how to use the Work Number, an employment verification service. If a worker wants to rent an apartment or borrow money, the landlord or lender uses the service to check that the person indeed works at Wal-Mart.

Wal-Mart spells out that workers can use the same service to apply for government assistance. One part of the handout details how a social service caseworker can verify an employee's income and work status to determine whether they'd qualify for assistance.

Lieber said she is working on legislation that would require Wal-Mart to reimburse the state for allegedly providing health care and public assistance to its workers. But so far, there's no evidence this is actually happening.

Lieber has not documented any cases of Wal-Mart workers leaning on social services because of insufficient pay or health benefits. In nearly a dozen Times interviews with current and former Northern California Wal-Mart store workers, only one provided examples of workers using a social service. But that alleged use of food stamps could not be proven.

And whether telling workers how to apply for social services constitutes encouragement is a matter of interpretation. Wal-Mart's McAdam called Lieber's allegation categorically false.

"The fact that it contains that particular reference does not mean we are encouraging them to do that," McAdam said.

Regardless of whether Lieber's allegations have merit, industry experts say it's clear that Wal-Mart workers are squeezed by the pay and cost of health benefits. Former Lafayette resident Martin Levitt consulted with Wal-Mart in the 1970s to help it prevent unions from forming. He later switched sides and now serves as a labor adviser in Las Vegas.

Health insurance is "not a provided benefit," Levitt said. "It's so expensive that the vast majority of Wal-Mart and Sam's Club employees can't afford it." When faced with criticism of its policies, the retailer justified them by saying it was providing jobs, Levitt said.

Wal-Mart's hard-line stance on benefits costs are a key part of its financial success. Industry experts say that labor costs account for two-thirds of a grocer's overall costs. Mark Husson, a food and drug analyst for Merrill Lynch Global Securities, called Wal-Mart's low worker costs its main competitive advantage.

"Wal-Mart is soon going to be the lowest common denominator in the food business, and everyone has to move towards that level," Husson said.

That's already starting to happen. Two years ago, Northern California members of the United Food and Commercial Workers saw their doctor visit and branded prescription drug co-pays double when they renewed their contract with Safeway and Albertson's. UFCW grocery workers went on strike in Southern California because three major grocery chains wanted to shift $1 billion in health-care costs to workers, according to the union. Safeway, Albertson's and Kroger Co. want workers to start paying $5 to $15 per week for insurance that was once free for them.

Many companies are starting to pass health-care costs onto workers because of the soaring price of health insurance. But California grocers are clearly shifting the costs in reaction to Wal-Mart. The retail giant has plans to open 40 supercenters selling fresh groceries in California over the next several years.

The new health-care law could take away part of Wal-Mart's labor cost advantage. SB2 would expand health care to more than 1 million working Californians by requiring companies with 50 workers or more to offer insurance or pay into a state fund that provides it.

Although the bill was aimed at small companies, it impacts Wal-Mart because it requires employers to pay for 80 percent of health-care costs. Right now, Wal-Mart covers about two-thirds of those costs. The measure also requires Wal-Mart to cut about 90 days off its benefits qualifying period for full-time workers and about one year and nine months off for part-time workers.

Wal-Mart said it could not estimate how much the changes would cost the company in California, where it employs 53,000 workers. But industry experts say that they could be significant enough to shift the company's California strategy.

"It could make a big difference in the degree that they expand in California," said Giblen, the supermarket analyst. The retailer could try to get around the cost by hiring fewer workers, having existing employees work more hours, and using machines instead of people for some jobs, he said.

The California Chamber of Commerce lobbied fiercely against the bill, arguing it would kill jobs in the Golden State.

"It imposes a new multibillion-dollar mandate for doing business in the state of California," said Richard Costigan, vice president of governmental relations for the chamber. "It imposes something on Wal-Mart and any other company that's not required in the 49 other states."

But Wal-Mart's McAdam said the law won't deter its interest in growing in California. It's also unclear whether Wal-Mart would be subjected to the measure. Opponents of the law are investigating whether federal laws would exempt Wal-Mart from the mandate because it operates across the country and insures itself. The law doesn't take effect until 2006.

Although politicians have put Wal-Mart's health benefits in the spotlight, local workers say the insurance is not a big topic of conversation at their stores. Plenty of workers say they consider the health costs fair and the coverage ample.

One sales associates said she thinks the $50 per month she pays for her PacifiCare health plan is completely reasonable. After six years working in an East Bay Wal-Mart store, the worker earns $11.25 per hour. The worker did not wish to be identified because Wal-Mart employees are not allowed to speak with the media without corporate authorization.

She said she was not aware of workers opting out of benefits because they're too expensive or leaning on social services.

"Why are people saying that they're outrageous? Because they're not," the worker said. "They're really not."

Robasciotti, the former Wal-Mart employee, now has a measure of comparison. Two years ago she left her Wal-Mart management job to work in a Safeway deli department in Morgan Hill. She moved up to become a manager at the in-store Starbucks, earns $13.50 and pays nothing for her benefits. Now Robasciotti is trying to encourage Wal-Mart workers to form a union of their own.

"It's just changed everything," said Robasciotti. "My dad tells me, 'You should have done this seven years ago.'"

Two supervisors leading charge against 'big box'

County leaders hitting pavement to take their case for opposing large-scale supermarkets to residents 
By Inga Miller, STAFF WRITER 
Monday, October 13, 2003 -

They make odd footsloggers for a campaign against Wal-Mart.

But two Contra Costa County Supervisors will hit the streets to tell residents why large-scale supermarkets can be bad. They plan to hold debates, press conferences and even walk door to door to ask residents to vote down an initiative sponsored by Wal-Mart Stores Inc., the world's largest retailer, aimed at ending restrictions on so called "big-box" retail in unincorporated parts of the county.

"I anticipate (Supervisor) John Gioia and I will be the spokespeople for the ordinance," said Supervisor Chairman Mark DeSaulnier of Concord, who co-sponsored the ordinance with Gioia in June that limits the amount of nontaxable goods that can be sold in stores more than 90,000 square feet.

"I'm out there on many issues, but this is the first time I can recall in recent memory when there has been a referendum on a county ordinance," said Gioia of Richmond.

"This is a referendum by Wal-Mart on a law we passed. So I think it makes sense that if I voted for a law, I should be out there talking to the public about why."

Campaign to continue into March

The two supervisors will raise money and speak publicly about the county's position, DeSaulnier said, up until the March 2 vote. It won't be an easy campaign.

"It's my understanding that if we prevail, we are the first in the country that took this on and won. But first we have to do that," he said.

"They are known for using hardball tactics. I get the distinct impression that this is not just about Contra Costa for them -- this is sending a message to all local jurisdictions saying they don't want to see this happen anywhere else."

If so, Wal-Mart picked an experienced foe.

DeSaulnier was on the Concord City Council in 1992 when Wal-Mart proposed a discount store in that city.

The council deadlocked 2-2, so DeSaulnier called on Wal-Mart to pay for an economic study showing the revenue it would generate for the city. After the study, the council voted unanimously against Wal-Mart.

"It (the study) said that we would most likely net $50,000 per year, but that we wouldn't realize that for 20 years because Wal-Mart would refuse to pay for utility undergrounding and they considered curbs and gutters off-site improvements, which they also refused to pay," DeSaulnier said. "Wal-Mart is very good at this, they get as much as they can from local government, and unfortunately, local government is not always sophisticated enough to understand."

Wal-Mart spokesman Amy Hill said she was not familiar with the study, noting that it dated back 11 years.

Supervisor, contractors butt heads

Already, Gioia has butted heads with contractors in Wal-Mart's campaign. In July, he stood next to paid signature collectors outside stores and asked people to rescind their approval by filling out slips of paper.

He said at one point, a signature contractor put a clipboard in front of his face, barring him from talking to a shopper. Another time he was almost forced from the premises by a store manager, he said.

The campaigners, he reported, made untrue comments about the county's ordinance, like that it would ban any grocery sales at discount stores -- and that it would apply all over the county.

"I was out there and they made a lot of misrepresentations," he said.

Rather, the county will still allow retailers to sell a small amount of groceries in big-box stores. In an outlet of 90,000 square feet, a retailer could sell the goods on 4,500 square feet. Nontaxable goods could be sold on 9,000 square feet in a store twice that size. And the ban only applies in unincorporated areas.

The rationale is that otherwise, the merchants aren't generating enough tax revenue to pay for roads and pipelines needed to support the location. Big-box stores tend to sit on the outskirts of communities, DeSaulnier said, where those services aren't up to par.

"Budgetary-wise, we are looking for businesses to provide revenue rather than add to our net loss," he said, adding he pays taxes as a restaurant owner in Concord. "As small retailers, we actually end up subsidizing these large businesses that then put the smaller business out of business."

Wal-Mart, Driving Workers and Supermarkets Crazy 
October 19, 2003 

n February Wal-Mart will open its first grocery supercenter in California, offering everything from tires to prime meats, and that could be a blessing for middle-class consumers. The reason is simple: Wal-Mart's prices are 14 percent lower than its competitors', according to a study by the investment bank UBS Warburg.

But not everyone is rejoicing about Wal-Mart's five-year plan to open 40 supercenters in California, stores combining general merchandise and groceries that are expected to gobble up $3.2 billion in sales. California's three largest supermarket chains, Ralphs, Vons and Albertsons, are scared, and so are tens of thousands of supermarket workers whose union contracts have put them solidly in the middle class. The three grocers' fears of fierce competition from Wal-Mart and their related drive to cut costs are widely seen as the main reason behind the week-old strike by 70,000 workers at 859 supermarkets in Southern California.

Wal-Mart has already helped push more than two dozen national supermarket chains into bankruptcy over the past decade. That list includes names like Grand Union; Bruno's, once Alabama's largest supermarket chain; and Homeland Stores, formerly Oklahoma's largest. And unionized supermarket workers fear that Wal-Mart's invasion will oust them from the middle class by pulling down their wages and benefits, which, taken together, are more than 50 percent higher than those of Wal-Mart workers. At Wal-Mart, the average wage is about $8.50 an hour, compared with $13 at unionized supermarkets.

"Wal-Mart's superstores are going to have a devastating impact on California's supermarkets," said Burt Flickinger III, a retailing consultant, noting that union wages and prices are higher in California than in most of the country.

Eager to stay competitive against Wal-Mart, Albertsons, Vons (owned by Safeway) and Ralphs (owned by Kroger) have demanded a two-year wage freeze for current workers, a lower pay scale for new hires and greater employee contributions for health coverage. Those employees now pay no health insurance premiums, while Wal-Mart employees often must pay premiums of $200 a month and deductibles of up to $1,000 a year, if they qualify.

With Wal-Mart in mind, supermarkets have engaged in tough bargaining across the country. That has led to a 12-day-old strike by 10,000 supermarket workers in Missouri and a six-day-old strike by 3,000 workers at 44 Krogers in West Virginia, Kentucky and Ohio.

It is hard to underestimate the power of Wal-Mart. It has 1.4 million employees and had $245 billion in revenues last year, equaling 2.5 percent of the gross domestic product. Each week 138 million shoppers visit Wal-Mart's 4,750 stores. Last year, 82 percent of American households bought at least one item there.

Wal-Mart sells 32 percent of the nation's disposable diapers, and it is the largest customer for Walt Disney and Procter & Gamble. It has singlehandedly persuaded music companies to issue sanitized versions of CD's. Its 1,397 supercenters account for 19 percent of the nation's grocery sales, making it the largest grocery retailer. With Wal-Mart planning 1,000 more supercenters in the next five years, Retail Forward, a consulting firm, estimates that Wal-Mart's grocery and drug sales will double to $162 billion, giving it 35 percent of the domestic food market and 25 percent of the drug market.

When Wal-Mart goes like gangbusters into an area, as it plans to do in California, competitors often feel panic. In Dallas, its share of the grocery market has soared to 16.4 percent from 8.5 percent in the past two years, according to TradeDimensions International.

"We have been in business for 68 years, and in that period of time, we have seen dozens of competitors come and go," said Jack Brown, president of Stater Brothers, a supermarket chain in the Orange County and San Diego areas. "However, Southern California has never seen as big a competitive threat as the Wal-Mart supercenter."

Many factors explain Wal-Mart's ability to charge low prices, including economies of scale, the pressures it puts on suppliers and its embrace of imports — it imported $12 billion in goods from China last year, one-tenth of American imports from China.

Another big factor is Wal-Mart's relatively low wages. Its sales clerks average about $8.50 an hour, or about $14,000 a year, while the poverty line for a family of three is $15,060. In California, the unionized stockers and clerks average $17.90 an hour after two years on the job. Mr. Flickinger said wages and benefits for Wal-Mart's full-time workers average $10 to $14 per hour less than for unionized supermarket workers.

"The strike out here involves workers who enjoy decent wages, vacations and health benefits," said Kent Wong, director of the Center for Labor Research and Education at the University of California at Los Angeles. "These things were taken for granted, they made them part of the middle class, but now these workers are threatened with having these things taken away."

A big savings for Wal-Mart comes in health care, where Wal-Mart pays 30 percent less for coverage for each insured worker than the industry average. An estimated 40 percent of employees are not covered by its health plan because many cannot afford the premiums or have not worked at Wal-Mart long enough to qualify.

"What this means is, if I'm a Wal-Mart employee and I hurt my hand and go to the emergency room, who's going to pay for it? The taxpayer is," said Mr. Brown, the supermarket executive. "Wal-Mart's fringe benefits are being paid by taxpayers."

Wal-Mart officials say that their expansion will be a boon for California consumers and that their wages and benefits are competitive. Why else, they ask, would 600,000 workers take jobs at Wal-Mart each year?

Greg Denier, chief spokesman for the United Food and Commercial Workers, said the fear of Wal-Mart's supercenters is the main cause for the California strike, but he argued that the supermarkets have exaggerated the threat as a strategy to squeeze their workers.

"They keep saying they have to do this because Wal-Mart is bringing supercenters to California," he said, "but it's part of a national program to ratchet down wages and benefits."

Yet Wall Street analysts and retailing consultants say the California supermarkets, like others across the country, risk being stomped by Wal-Mart.





American Demographics, Oct 1, 2003

Star Trek II: The Wrath of Khan introduced the Genesis Device, a mechanism conceived to "terraform" lifeless planets. In the wrong hands, if used on those where life already existed, it posed world-shaking destructive power. Here on Earth, a certain Bentonville, Ark., retailer wields a similar transmutative power. Although the evil Khan doesn't have hold of it, many see it as just as dangerous a double-edged sword hanging over our economy.

Wal-Mart is America's favorite store and, among detractors, its most reviled corporation. It is the new downtown, staffed with smiling faces and stocked with items at the best prices. Critics, meanwhile, allege it's a labor nightmare, bilking workers of due overtime pay, firing employees for discussing unionization, discriminating against female staffers and paving over America's small business foundations. Wal-Mart creates 1 in every 20 new jobs in the U.S. and opens a new outlet about every 42 hours, and, by one estimate, sees organized citizen opposition to 1 in 3 proposed new stores. A $244 billion business employing 1.3 million people, operating 3,000-plus stores in the U.S. and a thousand abroad, now accounting for $1 in every $5 spent on groceries, named by Fortune the corporate community's "most admired" company early this year — the Earth has never seen an entity of such leviathan proportions that it can reshape our economic landscape at will.

The company has undertaken its first market research program, presumably to come to grips with proliferating pockets of resistance, which have fought hundreds of proposed stores nationwide. Testimonial TV spots have addressed some of the points on its detractors' litany, including one featuring a female district manager discussing how being part of the Wal-Mart family helps her take care of her own — seemingly an answer to a pending class-action gender discrimination suit filed in California. Wal-Mart declined to comment for this story, but the company is hard-pressed to address the real crux of the anti-Wal-Mart movement. That is, the business practices that have made it so admired are unraveling the fabric of an already ravaged economy.

It may seem like much ado about something seemingly innocuous: a general merchandise store, whose popularity is decided by 138 million American shoppers, not to mention city fathers eager to rezone Wal-Mart into their outskirts. Then there's Al Norman, founder of Sprawl-Busters, based in Greenfield, Mass., who has tracked nearly 200 municipalities that have successfully fended off mega retail development. Since spearheading a fight to keep Wal-Mart out of Greenfield, he has seen a snowballing effect, as many as three to four calls a day, of grass roots groups seeking his counsel.

"Most municipal administrators are lay people, they just think that getting a Wal-Mart is sort of a retail equivalent of shaking hands with Elvis," Norman says. "They can't distinguish between industrial development, which by-and-large is added value, versus retail development, which adds no value. The developer comes to town and pays for all studies to convince the town that they're from Lake Woebegon. But independent impact studies would completely turn development in this country on its head."

A growing body of economic impact research contradicts the developers' rosy win-win scenarios. Kenneth Stone, an economics professor at Iowa State University, has tallied 53 types of businesses with which Wal-Mart competes, and has tracked a startling swath of destruction.

Stone pioneered research on the Wal-Mart factor in Iowa cities with populations of 5,000 to 40,000, tracking sales from as early as 1983, and more recently examined the Supercenter onslaught in Mississipi. In his 1997 study, "Impact of the Wal-Mart Phenomenon on Rural Communites," Stone found that between 1983 and 1996, the average Iowan spent 42 percent more in "department stores," (qualified as "primarily" mass merchants) than in 1983. In men's clothing stores alone, consumer spending eroded by 59 percent in the same period, resulting in the shuttering of 60 percent of these businesses. And, though host communities did see some general growth in transactions overall in the years after Wal-Mart's arrival, 10 years later, host towns lost an average of 4 percent of total sales, some towns of less than 5,000 losing half their retail trade. And, due to the magnet effect of Wal-Mart, sales transactions in neighboring towns declined 15 percent.

"Obviously there's a zero-sum game involved here," says Stone. "If you plop down a 200,000 square foot Supercenter someplace like Ankeny, Iowa (population 27,000), and are expecting your average $75- to $80 million a year in sales, that money doesn't come out of thin air. It comes from somewhere else."

Wal-Mart proponents invariably cite the "democracy of the marketplace," that a company that serves customers better deserves their business more. The logic might work were all things equal, but they're not. One hitch often glossed over is that many municipal administrations are so gung-ho for "economic development" that they defer local taxes and disproportionately subsidize new projects as opposed to reinvesting in existing businesses and infrastructure, according to an exhaustive analysis of "mega retail" chains by Edward Shils, professor emeritus at the University of Pennsylvania's Wharton School.

"Many of the development packages provide that a new 'Big Box' will be able to retain all sales taxes collected for a given number of years in order to help finance the construction and debt costs of the new facility," Shils stated in a 1997 report. "When this happens the local government and the school districts which depend on sales and real estate tax revenues find themselves in desperate financial condition since the small retailers which have been displaced are not providing revenues and sales tax to the schools and property and real estate taxes to the community."

Not only are the profits winging off to Bentonville, but the labor that earns them isn't even building up a healthy tax base for the local community. Various economic impact studies obtained for this story have found that, for every Wal-Mart hire in a new town, it destroys about 1.5 jobs at competing businesses. Further, per its standing policy that a "full-time" job is a 28-hour work-week, the median income of a Wal-Mart employee stands at around $12,000 a year, less than half the national median, according to the National Labor Committee.

Even should workers seek redress, Wal-Mart wields so much clout that the company can simply change the rules of the game. More than 200 major corporations, at the retailer's bidding, have opened offices in Bentonville to better "service the account." Recently, when meat cutters at its Jacksonville, Texas, Supercenter voted to join the national union, the company — whose view of labor mirrors that of JP Morgan — went to meat vendor IBP and demanded "case-ready" meat, i.e. cut and packaged before shipping, thus circumventing meat cutters across all of its Supercenters.

For Wall Street, all this reads as "efficiency," something its denizens slaver over. At Main Street level, however, a Genesis effect is happening, wherein for all the gee-whiz buzz over big boxes, commerce is bulldozed until cities are transmuted into mere colonies of mega corporations. Consumers might live a few cents cheaper in the short run, but as Stone wrote after his first study in 1988, "The money a Wal-Mart drains from the community won't come back; it isn't in the hands of local people who might invest it back in the community. Then you lose a sense of community loyalty, that small town atmosphere, and you are in danger of becoming a bedroom community. You don't have business and civic leaders; you have transient managers."

If Wal-Mart's labor policies seem regressive, the longer-term worst-case scenario may be even more anachronistic: communities whose fortunes are dangerously dependent on a single corporate entity, owing our souls, as it were, to the "company store."

Why Can?t Any AFL-CIO Union Organize Even One of Wal-Mart?s 4,750 Stores?

By Harry Kelber
LaborTalk for October 8, 2003

After years of trying, the one million-member United Food and Commercial Workers, an AFL-CIO affiliate, has been unable to unionize a single one of Wal-Mart's 4,750 supermarkets, despite a heavy investment of money and resources in its organizing campaign.

The best that the union?s large staff of organizers has been able to achieve is its only ?historic? breakthrough back in Feb. 17, 2000, when the meat cutters in the delicatessen department of a Wal-Mart supermarket in Jacksonville, Tex. voted 7 to 3 in favor of the UFCW in a National Labor Relations Board election. The union was unable to capitalize on this toehold victory to organize the entire store.

The UFCW can't blame its organizing failures on the grounds that the nearly one million people who work for Wal-Mart (the world's largest employer) are so happy with their pay, benefits and working conditions that they don't need a union.

The average pay for Wal-Mart employees (they're called ?associates?) is $8.23 an hour or $13,861 a year. That's well below the federal poverty line of $14,630 a year for a family of three.

Wal-Marts health-insurance plan is considerably below par, compared with those in the retail industry. It requires a six-month waiting period for new hourly employees. Its deductibles are as high as $1,000, triple the norm. It raised premiums 50% during the past two years. It does not cover retirees.

In truth, Wal-Mart employees are very unhappy at the variety of abuses they've taken from the company, and they've done something about it. Not by joining the union, but by instituting class action suits ? and winning many of them.

Two years ago, the giant retailer had to shell out $50 million to 69,000 workers in its Colorado stores, whose class-action suit cited overwhelming evidence of an enormous amount of off-the clockwork by employees. Wal-Mart also paid $485,000 to 10 former Hispanic employees in a discrimination suit.

Family members of deceased Wal-Mart employees are suing the company because it took out about 350,000 insurance policies on the lives of its workers, made payable to the company.

On Sept. 24, a California federal judge began considering a plaintiff's petition to include all women who worked at Wal-Mart since late 1998 (a total of 1.6 million women) in a class-action suit that charged that Wal-Mart systematically denied women equal pay and opportunities for promotion. This sex discrimination case could rank as the largest class-action suit ever.

The UFCW might have won the trust of Wal-Mart employees if it had led them in their law suits, but apparently it didn't get directly involved. Even though unionized store employees average about 30% or more in wages and benefits than those at Wal-Mart, UFCW organizers haven't been able to persuade a majority of workers at even one store to join the union.

The abysmal failure at Wal-Mart highlights the fact that AFL-CIO unions in the private sector won't try to unionize scores of corporations with a work force of 30,000 or more. (Remember that General Motors, Ford, Chrysler, General Electric, Westinghouse, U.S. Steel and Bethlehem were organized sixty years ago.) If AFL-CIO unions can?t organize the big companies, how are they to grow?

Since 1992, a total of 13,000 supermarkets, many of them unionized, have shut down, unable to compete with Wal-Mart's price-slashing of consumer goods. Its labor costs are 20% less than those in union food markets.

All the training programs, conferences, strategy sessions, seminars and tons of literature on union organizing haven't made much of a difference. And even if every union is persuaded to spend 30% of its budget on organizing, it won't lead to significant gains in union membership.

As long as the AFL-CIO's horrendous record at Wal-Mart remains unchallenged, workers at other large companies will think twice about joining a union.

What will those union leaders who want to give top priority to organizing have to say about Wal-Mart?

Our weekly ?LaborTalk? and ?Labor and the War? column can be viewed at our Web site www.laboreducator.org. Union members should check www.rankandfileaflcio.org news and information about the AFL-CIO reform movement.

Supervisors look ahead to March

Urban-limit line and Wal-Mart 
By Inga Miller, STAFF WRITER 
Wednesday, October 08, 2003 -MARTINEZ 

Contra Costa County Supervisors were busy with election matters Tuesday -- the election next March.

The board decided to start scheduling community meetings within the next few weeks to discuss putting a measure on the March 2 ballot that would shift control of the county's urban-limit line directly to voters.

As currently drafted by supervisors, the measure would call for an election any time a proposal is made to change the urban-limit line more than 10 acres, presumably to allow development. Smaller movements of the line still would be decided by supervisors.

"We need to get the message out there," said Supervisor Federal Glover, Pittsburg, who proposed the ballot measure.

At the community meetings, residents and local officials in all parts of the county will have a chance to comment on the plan. An alternative presented to supervisors on Tuesday suggests seeking voter approval for changes of more than 25 acres, rather than 10 acres, to allow more leeway.

"We want to hear their opinion on that," said Supervisor Gayle Uilkema, Lafayette.

"We will have a majority of the board at each of the meetings, and that gives the cities the chance to know the whole board is at the meeting and is able to act on their concerns."

Supervisors also opted in a 4-0 vote Tuesday to defend county restrictions on so called "big box" retail developments and put a referendum sponsored by Wal-Mart on the March 2 ballot.

Alternatively, the county legally would be forced to repeal the restrictions, which limit stores to 90,000 square feet when they sell nontaxable goods, such as groceries, on 5 percent or more of their floor space.

"It's important for us to be able to collect tax revenue from these projects that impact our roads," said Supervisor John Gioia, who pushed for the ordinance in June with board chairman Mark DeSaulnier, Concord..

The ban was challenged by Wal-Mart Inc. Opponents of the ban collected more than 40,000 signatures for a referendum, which qualified in July.

"Our option was either to repeal the ordinance or place it on the ballot. And I think it is good public policy to defend our ordinance when we passed it," Gioia said.

The decision was supported by Supervisors Millie Greenberg, Danville, and Glover.

Uilkema, who owns stock in Wal-Mart, abstained from the vote.

The campaign against the referendum "is going to be an incredibly difficult (one)" said DeSaulnier, "but I do think it is the right thing to do."

Wal-Mart aims to roll back ban

Voters will have opportunity to repeal or support ordinance 
By Inga Miller, STAFF WRITER 
Monday, October 13, 2003 -

MARTINEZ -- By popular consensus, another grocery store may be coming to your neighborhood -- a superstore.

Come March 2, Contra Costa County voters will be among the first in the country to decide whether to allow super centers, overturning a county ordinance that prevents the giant discount markets in unincorporated areas.

Sprawling across three to six times the floor space of typical grocery stores, Wal-Mart Stores Inc.'s brand of Supercenters will arrive in California next year. They are the discount giant's answer to grocery shopping melded with their range of other wares from shirts to towels and toys.

County supervisors passed an ordinance in June that bans Wal-Mart and other so-called big-box retail stores exceeding 90,000 square feet from selling groceries and other nontaxable goods on more than 5 percent of their floor space. An initiative to overturn the ban, sponsored by Wal-Mart, was placed on the ballot Oct. 7 .

If it fails, observers say the vote could bolster similar big-box restrictions being debated in Oakland and elsewhere in California.

"I would say it would be an interesting message if a fairly affluent county like Contra Costa sent Wal-Mart packing, because I think it is a place that represents their customer base," said retail location strategist Larry Kosmont, president of Kosmont Co's, Los Angeles.

Kosmont said the election's result could forecast the future of stores across the state that pack vegetables and cereal alongside the regular line of discount merchandise. Its defeat could make Wal-Mart rethink its Supercenter entrance into California.

Supercenters already speckle 43 other states. A Wal-Mart announcement earlier this year outlining plans to open 40 of the markets in California over the next four years sparked debate about the place of giant chain stores in several Bay Area communities. The first Supercenter is on schedule to open this spring in La Quinta in Riverside County.

Contra Costa County officials point to the typical locations of the stores and like businesses on the outskirts of towns. Because customers drive from farther away, roads get more use. And those that specialize in food generate less tax revenue per square foot than stores selling solely taxable goods.

So the centers don't pan out financially, Contra Costa supervisors say.

If voters reject the supervisors' ban, Wal-Mart, Kosmont said, might see it as a green light from consumers.

Wal-Mart is gearing up to for a fierce campaign. Super center opponents -- from local officials wary of building at the county's urban periphery to labor union opponents of Wal-Mart -- are mounting a challenge.

"Depending on how the vote plays out, I think it could have a very significant effect on how Wal-Mart decides it's going to roll out the rest of these stores," Kosmont said. "If voters uphold the ban on super centers, Wal-Mart may have to reconsider what their strategy is. And I think that is what their opponents are hoping for."

Groups from the United Food & Commercial Workers Union to the Greenbelt Alliance and the National Organization for Women have taken positions supporting Contra Costa's ordinance.

Pinole Mayor Maria Alegria said some groups will meet as early as this week to organize against what they call the sprawling nature of super centers that reduce wages and tax bases, snuff out downtowns and clog traffic. Alegria is executive director of FaithWorks, an alliance between union and religious groups.

Since 1988, Wal-Mart Supercenters have been popping up across the country, and now number 1,300. Only about three dozen cities and counties have ordinances limiting the size and scope of the stores -- and few, if any, have actually gone to the ballot box, said Al Norman. He operates a Web site, sprawl-busters.com, that tracks the fight against Wal-Mart across the country.

"I call them the Great American Dust Machine. They grind through the middle class of any community and help destroy the backbone of any small town. Once the small merchants are gone, they don't come back. And those merchants are the only thing that keeps Wal-Mart's prices competitive," said Norman, who has helped a number of anti-big-box campaigns across the country during the past decade.

The bans that are in place amount to corporate protection for major grocery chains, counters Amy Hill, Wal-Mart's public affairs manager for the Western Region.

"I believe special interest groups, particularly the food workers union, has a larger agenda to prevent Wal-Mart stores from bringing Supercenters to California, and Contra Costa is part of their plan to prevent our growth," she said.

"I think that our customers really appreciate the one-stop shopping where they can purchase a myriad of items right under one roof. They can combine what would take a day's worth of driving from errand to errand."

If so, it's at the cost of reducing wages for local residents, said Mike Daley, conservation director for the Sierra Club's Bay Area chapter.

"Livable wages are very much an environmental issue because if you can't afford to live 20 miles from where you work, then that becomes a transportation issue. You have people who work in the Bay Area and live in Fairfield and Vacaville," Daley said.

That view is shared by the United Food Workers Union Local 1179 in Contra Costa County, said President Barbara Carpenter. But she said the union was far from "behind the whole thing."

Daley cited a 1999 study by the Orange County Business Council that estimated Southern California alone could take a $2.8 billion yearly hit if super centers made an aggressive entrance into the market there. The loss stemmed from lower wages paid at discount companies such as Wal-Mart, and fewer benefits.

"When people are making low wages and don't have health benefits, that creates a burden on our already strained health care system," Pinole's Alegria said. "You get employers that don't provide benefits and then their employees rely on the public health system."

Wal-Mart maintains it was never contacted for wage information and Hill said the Orange County study -- conducted by the University of California -- was biased toward labor.

Because a pending lawsuit by six California women accuses Wal-Mart of wage and promotion discrimination, the National Organization for Women can't support Supercenters, California area Executive Director Helen Grieco said.

"I think you will hear a lot of people talk about more global issues -- health care for employees, for example. For me, as a former planning commissioner and land use official, this is a land use decision and a transportation decision and I think it is a good ordinance," said Supervisor Chairman Mark DeSaulnier, one of the ban's sponsors. "I think big corporations can make money under this ordinance. They are right now and they will continue to."

Contra Costa's code passed in a 3-0 vote by supervisors on June 3. In unincorporated parts of the county, it puts a 90,000-square-foot limit on all retail stores where 5 percent or more floor space displays groceries or other nontaxable goods such as pharmaceuticals. The average large grocery store is about45,000 square feet.

The ban doesn't apply to membership clubs such as Costco, which county planners say don't generate as much traffic. But it effectually rules out a Wal-Mart Supercenter.

"It is a direct attack on our business. We have to preserve customer choice," said Hill of Wal-Mart. So the company will appeal to its customers -- the voters, Hill said. "We don't have a specific campaign in place yet, but I think it will encompass many of the traditional campaign strategies, including direct mail."

Within a week of the ban's passage, Wal-Mart started the drive to overturn it. Wal-Mart spent $100,000 gathering signatures for the referendum.

"Wal-Mart always wants to say that this is about Wal-Mart. And I want to make clear this is not about Wal-Mart. This is about the county controlling land use in the unincorporated areas," said the ban's other sponsor, Supervisor John Gioia of Richmond.

"In this case, we want to make sure we recover tax revenue from large-scale retail stores that impose traffic and burden our roads. You don't get tax revenue from a supermarket. And from looking at where these are located, big-box retail stores tend to be built on the outskirts of a city. We are talking about larger traffic volume and increased traffic on our roads."

Wal-Mart hasn't proposed a Supercenter in Contra Costa County. But if it did, opponents speculate it would probably be in the unincorporated outskirts, like Supercenters in some other communities. The company needs about 15 acres to build one.

"In some areas, we tend to build where there is residential growth. Nine times out of 10, the residents come first and we are just bringing our stores to that growth," Hill said. "In a place like Contra Costa, where land is scarce, we look for infill."

An incoming Wal-Mart at the Hilltop Mall in Richmond couldn't be expanded into a Supercenter. And it is unclear, Hill said, whether Wal-Mart would ever create Supercenters at the existing stores in Pittsburg, Martinez and Antioch.

The Martinez City Council enacted restrictions a year ago similar to the county ordinance, so an expansion there is unlikely.

There is talk in Pinole too, about a possible ban, Alegria said.

Since 1998, local laws restricting the size of big-box retail have popped up in different parts of the state. There was discussion in Tracy about possible restrictions at one point, but a grass-roots effort never took off. Wal-Mart is considering bringing a Supercenter to that city.

The California Legislature passed a ban similar to Contra Costa's in 1999. But it was vetoed by Gov. Gray Davis after heavy lobbying from both labor unions and Wal-Mart.

Two local bans have also been rescinded. In Calexico at the Mexican border, and in Inglewood in Los Angeles County, city councils opted to repeal their bans rather than face Wal-Mart at the ballot box.

Where communities defend them, restrictions appear to survive legal challenges. An Arizona Superior Court upheld limits in Tucson on retail outlets100,000 square feet or larger selling nontaxable goods on more than 10,000 square feet.

"I think this ruling is very important to Contra Costa because the judge ruled that an ordinance very similar to Contra Costa's was constitutional," Norman said. The judge ruled Wal-Mart didn't have a standing in the case because it hadn't filed an application yet. "So to some degree, the court left the door open for a challenge in the future."

Wal-Mart isn't planning to get to that point in Contra Costa, Hill said.

"We do not believe we will not succeed. We believe the voters will vote to repeal this ordinance, and I think that will send a message to other communities in Contra Costa that people don't support ordinances like these," she said.

"It's kind of an un-American principle in a way to have a legitimate business comply with zoning and get booted out," retail strategist Kosmont said. "I guess the constituents will have to decide whether it is more un-American to take away land use than it is to provide low-paying jobs."

Wal-Mart's legal tactics raise hackles 
Chip Johnson 
Friday October 10, 2003 
©2003 San Francisco Chronicle

When Wal-Mart Corp. announced its plan to build 40 super-center stores in California, most people thought that meant the company would build in communities that want and need the mammoth facilities.

It didn't.

The nation's largest retail chain didn't grow to 4,200 stores by being nice about it.

In Wal-Mart's push to expand its presence in the Western United States, it's becoming clearer that the company's business proposals aren't proposals at all. It's more like them making an offer the other guy can't refuse.

In Nevada, Southern California, and now in Contra Costa County, the corporate leaders from Bentonville, Ark., have used the company's considerable financial resources to overturn political decisions whenever the system hasn't worked in its favor.

And the Bay Area could be the next battlefield in the Wal-Mart Wars.

The discount retail company has gathered the 27,000 signatures needed to place a referendum on the March 2004 ballot to challenge a county land use ordinance passed last June.

The law, which applies to unincorporated parts of the county, bans construction of big-box stores that devote more than 5 percent of their floor space to non-taxable grocery items.

"It's about us saying that in unincorporated areas we want to make sure we're recovering adequate sales taxes," said Contra Costa County Supervisor John Gioia of Richmond. Such stores often don't generate adequate tax revenues for the noise, air pollution and traffic congestion they create, he added.

It also presents a problem for the company's long-range goals because the core concept of a super-center is to combine a Wal-Mart discount store with a full-service grocery.

For the record, Wal-Mart officials say they gathered signatures because county officials simply ignored the democratic process.

"We felt the board of supervisors did not act with the will of the people, " said Amy Hill, a Wal-Mart spokeswoman from Reno.

The county law was approved in a political "vacuum" and Wal-Mart "owed it to our customers" to challenge the law, she added.

Fair-minded citizens in a few other California cities and Clark County, Nev., also are recent recipients of the retail empire's libertarian beliefs.

In all those cities, Wal-Mart also launched petition drives that either overturned local laws at the ballot box or pressured local officials to repeal them.

In Calexico, a Southern California city of about 27,000, Wal-Mart spent $140,000 to push through a referendum it had placed on the ballot. The referendum passed by a margin of nearly 2 to 1.

In Reedley, where the company wanted to build a 103,000-square-foot super- center, it entered the political fray over a local annexation and rezoning debate. It became a moot point when both measures lost.

Elected officials in Clark County, Nev., also repealed land-use policies under pressure of a referendum vote brought by the company.

Wal-Mart sees the fact some cities have yielded to the company's arguments as proof that the opposition was a thinly veiled cover for political pressure from special-interest groups such as labor unions.

"If union grocery workers have a problem with us, that's fine, but to ban competition is inappropriate," Hill said.

Not all California cities have reacted so negatively to being courted by Wal-Mart, and the company is making in-roads in nearly half a dozen cities across the state.

The state's first super-center store is scheduled to open early next year in the Southern California golf resort city of La Quinta, and that's just a start.

Proposals for the construction of super-center stores, which can be as large as 200,000 square feet, also have been approved in Palm Springs, Palm Desert and Chico, Hill said. Super-store proposals are also moving through the development process in Redding and Gilroy.

Closer to home, store officials have had discussions with Richmond city officials about taking over the abandoned Macy's store at Hilltop Mall.

There are plenty of California cities that would probably welcome a Wal- Mart superstore, but using corporate muscle to wedge them into already overcrowded urban areas is not going to earn them a community service award.

There is nothing wrong with creating new markets -- it's trying to manipulate local politics with corporate pressure that turns me off.

That's not the kind of corporate involvement most communities are looking for.

"What it really comes down to is do you want county planning decisions made by your elected representatives or corporate executives from Bentonville, Ark.?" Gioia asked.

I know the answer.

E-mail Chip Johnson at chjohnson@sfchronicle.com.

©2003 San Francisco Chronicle

 Supervisors look ahead to March

Urban-limit line and Wal-Mart 
By Inga Miller, STAFF WRITER 
Wednesday, October 08, 2003
 MARTINEZ -- Contra Costa County Supervisors were busy with election matters Tuesday -- the election next March.

The board decided to start scheduling community meetings within the next few weeks to discuss putting a measure on the March 2 ballot that would shift control of the county's urban-limit line directly to voters.

As currently drafted by supervisors, the measure would call for an election any time a proposal is made to change the urban-limit line more than 10 acres, presumably to allow development. Smaller movements of the line still would be decided by supervisors.

"We need to get the message out there," said Supervisor Federal Glover, Pittsburg, who proposed the ballot measure.

At the community meetings, residents and local officials in all parts of the county will have a chance to comment on the plan. An alternative presented to supervisors on Tuesday suggests seeking voter approval for changes of more than 25 acres, rather than 10 acres, to allow more leeway.

"We want to hear their opinion on that," said Supervisor Gayle Uilkema, Lafayette.

"We will have a majority of the board at each of the meetings, and that gives the cities the chance to know the whole board is at the meeting and is able to act on their concerns."

Supervisors also opted in a 4-0 vote Tuesday to defend county restrictions on so called "big box" retail developments and put a referendum sponsored by Wal-Mart on the March 2 ballot.

Alternatively, the county legally would be forced to repeal the restrictions, which limit stores to 90,000 square feet when they sell nontaxable goods, such as groceries, on 5 percent or more of their floor space.

"It's important for us to be able to collect tax revenue from these projects that impact our roads," said Supervisor John Gioia, who pushed for the ordinance in June with board chairman Mark DeSaulnier, Concord..

The ban was challenged by Wal-Mart Inc. Opponents of the ban collected more than 40,000 signatures for a referendum, which qualified in July.

"Our option was either to repeal the ordinance or place it on the ballot. And I think it is good public policy to defend our ordinance when we passed it," Gioia said.

The decision was supported by Supervisors Millie Greenberg, Danville, and Glover.

Uilkema, who owns stock in Wal-Mart, abstained from the vote.

The campaign against the referendum "is going to be an incredibly difficult (one)" said DeSaulnier, "but I do think it is the right thing to do."

Wal-Mart drifted into trade unions dispute in China
2003-10-07 16:01 

Wal-Mart, world's No.1 retailer, has become the target of the All-China Federation of Trade Unions (ACFTU), for refusing to establish trade unions in its branches in China.

Before the opening of the Chinese Trade Unions 14th National Congress on Sept. 22, the ACFTU officially urged Wal-Mart to establish trade unions.

"For companies depriving the rights of employees to establish trade unions, we reserve the right of resorting to lawsuits," the ACFTU announced.

Wal-Mart's China headquarters responded the next day that "it had constituted a series of regulations under Chinese laws, especially those that relate to trade unions, offering effective channels to resolve complaints from employees."

"All the legal rights of employees, involving wage rises, promotion, and vacations, have been written in contracts and the company's employee manual," said a Wal-Mart spokesman, reported in the 21st Century Business Herald, a well-known national business newspaper.

According to the ACFTU, participation in trade unions is a basic right of employees in all enterprises in China, enshrined in law, which can not be removed by any organization or individual.

Wal-Mart said that according to Chinese law, a trade union could only be installed at the free request of employees, and since there have been no requests yet, there is no necessity to establish a union.

But the ACFTU contended that although employees of foreign- funded enterprises wish to have local trade unions of their own, they can not afford to raise the issue with their employer for fear of losing their jobs or other benefits.

"And the competition for jobs is so fierce today," a union activist said.

The disagreement also derives from legal differences. A Wal- Mart spokesman explained that there are no trade unions in its branches in other parts of the world either.

But according to Chinese law, a trade union is usually required to be installed at every company of a certain scale. In the United States, workers can establish their own trade unions for the protection of their rights, without organizational affiliations with their specific employers.

Since November 2000 all efforts by the ACFTU to urge Wal-Mart to establish trade unions have been in vain.

"We have contacted Wal-Mart several times," said Feng Lijun, an ACFTU official, "but no progress has been made so far."

Xu Xicheng, vice chairman

Here Comes the Neighborhood
by John Unrein, Baking Buyer
September 1, 2003

When Sam Walton ran for student body president at the University of Missouri in the 1930s, he learned a crucial lesson called the 10-foot rule: Greet anyone within 10 feet with a smile and speak to them directly, preferably by name.

This neighborly attitude made Walton billions.

Now, as Wal-Mart gains familiarity and clout in the food business, the world's largest retailer is ready to cozy up to even more bakery customers through its Neighborhood Markets. These stores are roughly one-quarter the size of a Wal-Mart Supercenter and carry dozens of bakery items such as donuts for 50 cents apiece, loaf cakes for $1.49 and hot French bread for less than a buck. Yet little baking is done at store level.

Most baked goods are shipped from a nearby Supercenter, and analysts say Wal-Mart is wise to recognize these two concepts fit well together. Both are supported by regional distribution centers that keep Wal-Mart stores efficiently stocked.

"Wal-Mart is a stellar brand, and they have proven through the test of time that most everything they do turns to gold," says Ira Blumenthal, a retail analyst and president of Co-opportunities Inc. in Atlanta, GA. "It's only a matter of time until they build strong credibility in food categories, as well."

There are now 53 Neighborhood Markets in eight states. Wal-Mart plans to add 20 to 25 locations during its current fiscal year.

By comparison, Wal-Mart operates 1,356 Supercenters. This discount store-supermarket hybrid was introduced in 1988, and within a decade Wal-Mart had emerged as one of the nation's largest grocers. Today, it's No. 1.

Analysts predict Neighborhood Markets will solidify Wal-Mart's dominant position in the supermarket sector by grabbing new customers in urban areas. New locations are going up in fast-growing markets such as Dallas-Fort Worth, TX, Orlando, FL, and Salt Lake City, UT.

"To get into metros, this is their answer," says Dick Spezzano, a retail analyst and a former perishables executive at Vons supermarkets in Southern California. "You can't get 15-acre blocks in big cities. But there are opportunities in metros to put down 30,000- to 40,000-square-foot stores. The challenge is the Krogers and the Safeways of the world are looking for the same spots, and they'll pay more for location."

Neighborhood Markets, which debuted in 1998, range in size from 42,000 to 55,000 square feet and carry fresh perishables, general merchandise and dry grocery items. Neighborhood Markets typically employ 80 to 100 and offer about 28,000 items.

"Neighborhood Markets are generally opened in areas with existing Supercenters," says Karen Burk, a Wal-Mart spokesperson. "This allows shoppers who want to make a quick trip to the grocery store a convenient, more intimate format. For longer grocery trips, customers can enjoy the nearby Supercenter. Both formats offer a different kind of convenience for our customers."

What Neighborhood Markets lack in production at store level, they more than make up for in merchandising. Bakery departments feature a sparkling clean, upscale look with wooden tables-with extras like mobile heating display units for stocking French bread on the sales floor. Customers just open the door and select what they need.

"The more square feet you have with stuff to sell, the better off you are," Blumenthal says. "The more space you have devoted to baking and production, that's not selling feet."

Another unique feature of the Neighborhood is the "Grab-n-Go" section, where shoppers can buy a donut or cinnamon roll on the honor system by dropping two quarters in the box. Or they can pour their own coffee or soft drinks and pick up a newspaper here. The self-serve price is noted above each product. Not all Neighborhood Markets offer the Grab-n-Go section. Most new locations offer this feature.

"It has been popular in those communities where it is available," Burk says. "Whether it's one-stop shopping at our Supercenters or the Grab-n-Go at our Neighborhood Markets, convenience is definitely a focus for serving our customers."

Some analysts say Wal-Mart has tweaked the merchandising of Neighborhood Markets so much in five years that they've rubbed the original paint off the shelves. One challenge has been to open more aisle space.

"From the stores I've seen, they've got perishables squeezed. You've got to have 6- and 8-foot aisles, so people feel comfortable shopping," Spezzano says. "You want to slow down the shopping trip to expose more products to them. When you squeeze down bakery and produce, that's 70% impulse. Tight aisles and tight displays in the first Neighborhood Market stores worked against them."

But new locations have a more open feel. Plus, bakery selections are on the rise because perishables departments in smaller stores play an even more important role to the gross-profit bottom line. Some inside Wal-Mart are in favor of larger Neighborhood Markets in the future so the stores can boast wider selection.

In July, a new 48,600-square-foot Neighborhood Market opened in Fort Worth, TX.

"They tweak and tweak and tweak. The store gets better each time," Spezzano adds. "It shows you how strong they are. Once they latch on to something, they roll it out."

Blumenthal agrees that it's not a question of if Wal-Mart will expand its Neighborhood Market concept across the country, as it did with Supercenters during the '90s, but when.

"Being relatively slow to get into something is their pattern," he says. "Look at McDonald's. They had two restaurants for eight to 10 years. To me, this is the Wal-Mart way. Wal-Mart knows no other way than winning. They are perhaps the world's leading marketer. They plan well. They research well. Most importantly, they execute well."

Voters may decide on big-box stores
Ballot-box showdown could decide fate of supercenters 

By Inga Miller, STAFF WRITER Tri-Valley Herald
Sunday, October 05, 2003 - MARTINEZ

Setting the groundwork for a ballot-box showdown between Wal-Mart and Contra Costa County, the Board of Supervisors is expected to pick a date Tuesday for an election on its controversial ban on big-box retailers.

The ordinance limits the size of grocery stores and other outlets selling non-taxable goods. Wal-Mart says it is anti-business; the Supervisors defending it say it will keep roadways clear and the county's tax base up.

"I think it's important to go ahead with the initiative process and to try and overcome Wal-Mart's opposition to our ordinance," said Board of Supervisors Chairman Mark DeSaulnier.

If upheld by courts, the county ban will apply to retailers in the unincorporated areas, he said. It limits all retail outlets that sell groceries or other non-taxable goods on 5 percent or more of the floor space at 90,000 square feet .

Thus, the law doesn't specifically target Wal-Mart.

Wal-Mart Inc., though, was the only retailer to challenge the ban when supervisors passed it June 3.

"We believe it is very anti-competitive and anti-consumer," said Amy Hill, Wal-Mart's community affairs manager for Northern California.

In a move that stalled the ban from taking effect, an attorney for Wal-Mart presented more than 40,000 signatures July 2 for a referendum. It qualified for the ballot July 29 with about 30,700 validated signatures, or 4,000 more than required.

The issue could go to the ballot March 2, under a proposal that will be presented Tuesday by DeSaulnier and Supervisor John Gioia of Richmond.

Also, the supervisors simply could decide to repeal the ordinance. Both options are allowable under elections law, according to a county staff report.

"While we certainly would prefer the Board of Supervisors to repeal the ordinance based on the 40,000 signatures we gathered in Contra Costa, we are realistic enough to realize the political pressures," Hill said. "And we fully expect this to be sent to an election."

Supervisor Federal Glover of Pitts-burg also voted for the ban, which passed in a 3-0 vote. Supervisor Gayle Uilkema of Lafayette recused herself because she owns stock in Wal-Mart.

Wal-Mart's supercenters slowly have been moving across the country since 1988, only recently arriving in California. The first is set to open in La

Quinta next year, followed by stores in Bakersfield, Redding, Chico and Hanford.

Only a few dozen communities have restrictions banning them, including the city of Martinez. Citing the amount of traffic the centers could generate to out-of-town sites and the lack of a tax-base from groceries, the county followed suit. Oakland and Fremont also are debating bans.

"There are some communities that limit all stores over a certain size. What Wal-Mart seems to want to do, though, is to make zoning decisions for Contra Costa County from Bentonville, Ark." where they are based, Gioia said.

"Should our zoning decisions be made by local officials in Martinez or in Bentonville by the world's largest corporation?" he asked.

The Board of Supervisors meets at 9:30 a.m. Tuesday in the McBrien Administration Building, 651 Pine St., Martinez.

Wal-Mart CEO: Profitability Driving Supercenter Growth


September 30, 2003

NEW YORK -- Wal-Mart Stores Inc.'s (WMT) store growth next year will continue to be driven by its supercenter format - simply because that is the company's most profitable format, the top executive said.

Wal-Mart said late Monday it plans to open 220 to 230 supercenters in 2004. Relocations and expansions of existing discount stores will account for about 140 of the new supercenters, with the remainder built at new locations. Those openings will dwarf the numbers of new discount stores, slated at 50 to 55. Sam's Clubs will open 35 to 40 locations, including about 20 relocations. Wal-Mart's developing Neighborhood Market format will see only 25 to 30 openings.

"We are satisfied with the returns on the Neighborhood Markets," Wal-Mart President and Chief Executive H. Lee Scott said at the company's annual meeting with analysts at its headquarters in Bentonville, Ark. "But we have a higher - much higher - return on the supercenters, and we are going to spend our efforts in that area."

By the end of this year, supercenters will outnumber Wal-Mart's regular discount stores for the first time, Scott said. Next year, they will outnumber discount stores by at least 100, with more than 1,700 stores.

Wal-Mart executives in the past had forecast limits on the growth of the supercenter format, figuring a given area could support only a limited number of the giant stores, which add full-line grocery stores to the general merchandise offerings of regular discount stores.

Supercenter cannibalization, or competition between stores of a single company, has hurt the company's recent comparable sales by more than a percentage point, and that figure will continue to creep higher as the number of supercenters grows. But Wal-Mart is growing more skilled at locating its stores to reduce customer overlap, for example by using point-of-sale data to determine where a store's customers live.

What's more, "cannibalization improves the customer experience," increasing the convenience of locations, and resulting in shelves that are better stocked at both stores, Scott said. He added that as stores mature, the effect of cannibalization tends to wane.

"We can put more supercenters closer together than we had ever dreamed of in our life," Scott said.

As of August 31, Wal-Mart operated 1,494 discount stores, 1,386 supercenters, 532 Sam's Clubs and 56 Neighborhood Markets in the U.S.

-By James Covert, Dow Jones Newswire

Playboy Focuses on Wal-Mart, Which Doesn't Sell the Magazine

29 September 2003 
The New York Times Late Edition - Final 2 English 
(c) 2003 New York Times Company

The November issue of Playboy takes on Wal-Mart Stores Inc., the world's largest retailer. But no one who shops for magazines exclusively at Wal-Mart is likely to see the article, because Playboy is among the titles it does not sell.

The article, ''God and Satan in Bentonville,'' in the November issue of Playboy, on newsstands Monday, addresses the conservative, no-frills culture at Wal-Mart after a tour of Bentonville, Ark., where it is based.

''Wal-Mart has never been able to square its professed Main Street values -- the greeters at the store doors, the flag-waving patriotism -- with the uncomfortable fact that it's bad news for Main Street wherever it goes,'' Dan Baum writes in the article. Mr. Baum reports that an independent bookstore in town on the verge of shutting down is owned by a daughter-in-law of Sam Walton, the founder of Wal-Mart.

Its ability to filter content for its customers is among the points the article addresses, with such observations as, ''The First Amendment prevents censorship by the government, but Wal-Mart is now so huge that its perfectly legal corporate policies can hinder freedom of choice.''

One evangelist interviewed said he moved to Bentonville ''to fight Satan,'' and explained: ''Satan is a mimicker. God is here, so Satan is here. Wal-Mart started out good, selling things cheap to people who didn't have a lot of money. But that's how Satan works.'' He added, ''The reason the religious right is here in Bentonville is that it's holding off Wal-Mart.''

The retailer cooperated with Mr. Baum by answering his questions and questions from his editors, a spokesman, Tom Williams, said. ''We try to respond to all queries that come to us,'' Mr. Williams said.

Playboy's Web site, Playboy.com, is inviting women who work for Wal-Mart to pose nude for a feature called ''Women of Wal-Mart.''

At Wal-Mart, ''we don't care for it at all,'' Mr. Williams said. ''We think Playboy is exploiting our name to sell the magazine.'' Has anyone signed up yet? Mr. Williams said he did not know. But he added, ''We are confident a lot of the associates are going to see right through it.''

Denver Post:  Should Denver subsidize Wal-Mart?

Susan Barnes-Gelt 
Wednesday, September 24, 2003

The world's biggest corporation wants at least $12 million from Denver taxpayers to replace 20 small shops with a Super Wal-Mart. And tomorrow the Denver Urb! an Renewal Authority will approve the use of its most powerful tool - eminent domain - to evict two Asian supermarkets, Denver's best dim sum restaurant, a barber shop, beauty school, martial arts center and several other small, locally owned businesses.

This co-called "friendly" condemnation means DURA will relieve Wal-Mart and one of the current landowners of the cost and aggravation of negotiating with a collection of immigrant business owners. The threat of condemnation also means all three property owners will get federal income-tax breaks when it's time to pay taxes on their gains.

The multimillion-dollar tax subsidy will close the gap between what the owners are asking for their 20-acre parcel of "slum and blight" and what Wal-Mart is willing to pay. Ordinarily, the negotiation between a willing buyer and seller reflects market value. But Wal-Mart says it won't pay the asking price. The landowners are holding out for top dollar, and DURA is willing to inflate the market.

A dozen years ago, DURA identified this property as "slum and blight" and created an urban renewal district. A few years later, immigrant business owners saw something else: the opportunity to start a business, work hard and achieve the American dream. It's urban renewal without capital letters or a government handout.

Prodded by neighbors anxious for a supermarket and tired of slow revitalization, DURA and the city are ready to meet Wal-Mart's demand for aid.

Mayor John Hickenlooper's campaign message was persuasive: Denver is open for business, especially small business. Though his admini- stration inherited this dilemma, the welfare-for-Wal-Mart scheme raises questions he must answer.

How many jobs will be lost? University of California at Irvine economist Dr. Marlon Boarnet found that for every 100 jobs a Wal-Mart creates, 150 existing jobs in the community are destroyed.

What will the promised 400 jobs pay? Will compensation exceed the $11,900 to $16,202 annual salary the typical Wal-Mart worker earns?

Company spokesman Tom Williams says fewer than half of Wal-Mart's employees are covered by the company's health-care plan. This lack of coverage is further explained by another company spokeswoman, Christi Gallagher: "Our plan is a catastrophic plan. ... There's no cap on major illness or major medical expanses."

Sounds catastrophic all right - both for the employees and Denver Health's emergency room.

Right now, nearly 500 abandoned Wal-Marts litter the landscape nationwide. Like all big-box retailers, Wal-Mart remodels, expands and moves frequently. What happens when the subsidy is paid off and Wal-Mart wants a bigger store? Will the company sign an agreement guaranteeing its participation in the redevelopment of the store? Or will Denver have another decade of blight on West Alameda Avenue and Zuni Street?

The company hasn't submitted a site plan to the city. However, the last plan the neighbors saw places the store at the rear of the property, violating every rule and regulation in Denver's urban design playbook. In return for a handsome handout and shielding the company from existing tenants, shouldn't Wal-Mart abide by the rules and regulations the city requires of developers?

Condemnation and tax subsidy are potent tools demanding substantial public benefit. Their use should translate to long-term, quality revitalization, good jobs with good pay, synergy for neighboring businesses and increased city revenue. When the heavy club of government is used to transfer property from one private owner to another, the public benefits must be transparent and compelling.

A final question for Denver: Are 400 low-paying jobs, cheap goods and a grocery store worth evicting 20 shop owners, undermining local businesses and absorbing the hidden costs of public health and social services? And, 12 or 15 years from now, what will we do with a big vacant box in the middle of a parking lot?

The sales receipts from Wal-Mart go to Bentonville, Ark. The Siu family, owners of the best dim sum restaurant in Denver, banks up the street.

Denver native and civic activist Susan Barnes-Gelt (bs13@qwest.net) served eight years on the Denver City Council and was an aide to former Denver Mayor Federico Pena. Her column appears on alternate Wednesdays.

Is Wal-Mart Too Powerful?
Low prices are great. But Wal-Mart's dominance creates problems -- for suppliers, workers, communities, and even American culture

COVER STORY Business Week
October 6, 2003

In business, there is big, and there is Wal-Mart. With $245 billion in revenues in 2002, Wal-Mart Stores (WMT ) Inc. is the world's largest company. It is three times the size of the No. 2 retailer, France's Carrefour. Every week, 138 million shoppers visit Wal-Mart's 4,750 stores; last year, 82% of American households made at least one purchase at Wal-Mart. "There's nothing like Wal-Mart," says Ira Kalish, global director of Deloitte Research. "They are so much bigger than any retailer has ever been that it's not possible to compare."

At Wal-Mart, "everyday low prices" is more than a slogan; it is the fundamental tenet of a cult masquerading as a company. Over the years, Wal-Mart has relentlessly wrung tens of billions of dollars in cost efficiencies out of the retail supply chain, passing the larger part of the savings along to shoppers as bargain prices. New England Consulting estimates that Wal-Mart saved its U.S. customers $20 billion last year alone. Factor in the price cuts other retailers must make to compete, and the total annual savings approach $100 billion. It's no wonder that economists refer to a broad "Wal-Mart effect" that has suppressed inflation and rippled productivity gains through the economy year after year.

However, Wal-Mart's seemingly simple and virtuous business model is fraught with complications and perverse consequences. To cite a particularly noteworthy one, this staunchly anti-union company, America's largest private employer, is widely blamed for the sorry state of retail wages in America. On average, Wal-Mart sales clerks -- "associates" in company parlance -- pulled in $8.23 an hour, or $13,861 a year, in 2001, according to documents filed in a lawsuit pending against the company. At the time, the federal poverty line for a family of three was $14,630. Wal-Mart insists that it pays competitively, citing a privately commissioned survey that found that it "meets or exceeds" the total remuneration paid by rival retailers in 50 U.S. markets. "This is a good place to work," says Coleman H. Peterson, executive vice-president for personnel, citing an employee turnover rate that has fallen below 45% from 70% in 1999.

Critics counter that this is evidence not of improving morale but of a lack of employment alternatives in a slow-growth economy. "It's a ticking time bomb," says an executive at one big Wal-Mart supplier. "At some point, do the people stand up and revolt?" Indeed, the company now faces a revolt of sorts in the form of nearly 40 lawsuits charging it with forcing employees to work overtime without pay and a sex-discrimination case that could rank as the largest civil rights class action ever. On Sept. 24, a federal judge in California began considering a plaintiff's petition to include all women who have worked at Wal-Mart since late 1998 -- 1.6 million all told -- in a suit alleging that Wal-Mart systematically denies women equal pay and opportunities for promotion. Wal-Mart is vigorously contesting all of these suits.

Wal-Mart might well be both America's most admired and most hated company. "The world has never known a company with such ambition, capability, and momentum," marvels a Boston Consulting Group report. On Wall Street, Wal-Mart trades at a premium to most every other retailer. But the more size and power that "the Beast of Bentonville" amasses, the greater the backlash it is stirring among competing retailers, vendors, organized labor, community activists, and cultural and political progressives. America has a long history of controversial retailers, notes James E. Hoopes, a history professor at Babson College. "What's new about Wal-Mart is the flak it's drawn from outside the world of its competition," he says. "It's become a social phenomenon that people resent and fear."

Wal-Mart's marketplace clout is hard to overstate. In household staples such as toothpaste, shampoo, and paper towels, the company commands about 30% of the U.S. market, and analysts predict that its share of many such goods could hit 50% before decade's end. Wal-Mart also is Hollywood's biggest outlet, accounting for 15% to 20% of all sales of CDs, videos, and DVDs. The mega-retailer did not add magazines to its mix until the mid-1990s, but it now makes 15% of all single-copy sales in the U.S. In books, too, Wal-Mart has quickly become a force. "They pile up best-sellers like toothpaste," says Stephen Riggio, chief executive of Barnes & Noble (BKS ) Inc., the world's largest bookseller.

Wal-Mart controls a large and rapidly increasing share of the business done by most every major U.S. consumer-products company: 28% of Dial (DL ) total sales, 24% of Del Monte Foods (DLM )', 23% of Clorox', 23% of Revlon (REV )'s, and on down the list. Suppliers' growing dependence on Wal-Mart is "a huge issue" not only for manufacturers but also for the U.S. economy, says Tom Rubel, CEO of consultant Retail Forward Inc. "If [Wal-Mart] ever stumbles, we've got a potential national security problem on our hands. They touch almost everything....If they ever really went into a tailspin, the dislocation would be significant and traumatic."

Even so, Wal-Mart appears to be in no imminent danger of running afoul of federal antitrust statutes. The Robinson-Patman Act of 1936 was passed in large part to protect mom-and-pop grocers from the Great Atlantic & Pacific Tea Co., the Wal-Mart of its day. But contemporary antitrust interpretations eschew such David-and-Goliath populism. Giants like Wal-Mart have wide latitude to do as they wish to rivals and suppliers so long as they deliver lower prices to consumers. "When Wal-Mart comes in and people desert downtown because they like the selection and the low prices, it's hard for people in the antitrust community to say we should not let them do that," says New York University law professor Harry First.

CEO H. Lee Scott Jr. and other Wal-Mart executives are aware of the rising hostility the company faces and are trying to smooth its rough edges in dealing with the outside world. But they have no intention of tampering with its shopper-centric business model. "We don't turn a deaf ear to any criticism. We're most sensitive to what the customer has to say, though," says Vice-Chairman Thomas M. Coughlin. "Your customers will tell you when you're wrong."

Wal-Mart cites customer preferences as the reason it does not stock CDs or DVDs with parental warning stickers and why it occasionally yanks items from its shelves. In May, it removed the racy "lad" magazines Maxim, Stuff, and FHM. A month later, it began obscuring the covers of Glamour, Redbook, Marie Claire, and Cosmopolitan with binders. Why did Wal-Mart censor these publications and not Rolling Stone, which has featured a nearly naked Britney Spears and Christina Aguilera on two of its recent covers? "There's a lot of subjectivity," concedes Gary Severson, a Wal-Mart general merchandise manager. "There's a line between provocative and pornographic. I don't know exactly where it is."

Wal-Mart was the only one of the top 10 drug chains to refuse to stock Preven when Gynetics Inc. introduced the morning-after contraceptive in 1999. Roderick L. Mackenzie, Gynetics' founder and nonexecutive chairman, says senior Wal-Mart executives told his employees that they did not want their pharmacists grappling with the "moral dilemma" of abortion. Mackenzie was incensed but tried to hide it. "When you speak to God in Bentonville, you speak in hushed tones," says Mackenzie, who explained, to no avail, that Preven did not induce abortion but rather prevented pregnancy. Wal-Mart spokesman Jay Allen says "a number of factors were considered" in making the Preven decision, but he denies that opposition to abortion was one of them. "If anybody of any belief reads any moral decision [into] that, that's not right," he says.

CULTURAL GATEKEEPER There is no question that the company has the legal right to sell only what it chooses to sell, even in the case of First Amendment-protected material such as magazines. By most accounts, though, Wal-Mart's cultural gatekeeping has served to narrow the mainstream for entertainment offerings while imparting to it a rightward tilt. The big music companies have stopped grousing about Wal-Mart and are eagerly supplying the chain with the same sanitized versions of explicit CDs that they provide to radio stations. "You can't have 100% impact when you are taking an artist to a mainstream audience if you don't have the biggest player, Wal-Mart," says EMI Music North America Executive Vice-President Phil Quartararo.

This year alone, Wal-Mart hopes to open as many as 335 new stores in the U.S.: 55 discount stores, 210 supercenters, 45 Sam's Clubs (UBS ), and 25 Neighborhood markets. An additional 130 new stores are on the boards for foreign markets. Wal-Mart currently operates 1,309 stores in 10 countries, ranking as the largest retailer in Mexico and Canada. If the company can maintain its current 15% growth rate, it will double its revenues over the next five years and top $600 billion in 2011.

That's a very big if -- even for Wal-Mart. Vice-Chairman Coughlin's biggest worry is finding enough warm bodies to staff all those new stores. By Wal-Mart's own estimate, about 44% of its 1.4 million employees will leave in 2003, meaning the company will need to hire 616,000 workers just to stay even. In addition, from 2004 to 2008, the company wants to add 800,000 new positions, including 47,000 management slots. "That's what causes me the most sleepless nights," Coughlin says.

At the same time, Wal-Mart will have to cope with intensifying grassroots opposition. The company's hugely ambitious expansion plans hinge on continuing its move out of its stronghold in the rural South and Midwest into urban America. This year, the company opened what it describes as "one of its first truly urban stores" in Los Angeles, not far from Watts. Everyday low prices no doubt appeal to city dwellers no less than to their country cousins. But Wal-Mart's sense of itself as definitively American ("Wal-Mart is America," boasts one top executive) is likely to be severely tested by the metropolis' high land costs, restrictive zoning codes, and combative labor unions -- not to mention its greater economic and cultural diversity.

A ZERO-SUM GAME? Certainly, Wal-Mart will be hard pressed to continue censoring its product lines using the justification of customer preference. The market for profanity-laced hip-hop may be tiny in Bentonville, Ark., but it is big in Los Angeles. Overseas, the company does not presume to impose a small-town, Bible Belt moral agenda on shoppers. "We adopt local standards," says John B. Menzer, CEO of Wal-Mart's international division. Why, then, should Los Angeles be any different?

The fact is, Wal-Mart doesn't know for certain how the majority of its customers feel about Maxim, or any other magazine, for that matter. It appears that the company makes no scientific attempt to survey shoppers about entertainment content but responds in ad hoc fashion to complaints lodged by a relative handful of customers and by outside groups, which are usually but not always of the conservative persuasion.

On the other hand, the company seldom submits to community groups that oppose its plans to build new stores. The number of such challenges has increased steadily and is now running at about 100 a year. Wal-Mart's "biggest barrier to growth is....opposition at the local level," says Carl Steidtmann, Deloitte Research's retail economist. The Stop Wal-Mart movement has been bolstered of late by a series of academic studies that have debunked the notion that a new big-box store boosts employment and sales and property-tax receipts. "The net increases are minimal as the new big-box stores merely capture sales from existing business in the area," concludes a new study of Wal-Mart's impact in Mississippi. "I see it pretty much as a zero-sum game," says co-author Kenneth E. Stone, an economics professor at Iowa State University.

The most hotly contested battleground at the moment is Contra Costa County, near San Francisco. In June, county supervisors enacted an ordinance that prohibits any retail outlet larger than 90,000 square feet from devoting more than 5% of its floor space to food or other nontaxable goods. Wal-Mart promptly gathered enough signatures to force a referendum, scheduled for March. Complains County Supervisor John Gioia: "Local planning should be done by our locally elected board and not by a corporate office in Bentonville, Arkansas." Robert S. McAdam, Wal-Mart's vice-president for government relations, says corporate-sponsored referenda, which Wal-Mart has promoted elsewhere in California, are "a perfectly legitimate part of the process."

SUPERCENTER NATION Meanwhile, the United Food & Commercial Workers union is stepping up its long-standing attempts to organize Wal-Mart stores, with current campaigns in 45 locations. For UFCW locals that represent grocery workers, the issue is nothing less than survival. The Wal-Mart supercenter -- the principal vehicle of the company's expansion -- is a nonunion dagger aimed at the heart of the traditional American supermarket, nearly 13,000 of which have closed since 1992.

Patterned after the European hypermarket, the supercenter is a combination supermarket and general merchandise discounter built to colossal scale. Wal-Mart didn't introduce the supercenter to America, but it has amassed a 79% share of the category since it moved into food and drug retailing by opening its first such store in 1988. Today, Wal-Mart operates 1,386 supercenters and is the nation's largest grocer, with a 19% market share, and its third-largest pharmacy, with 16%.

Wal-Mart plans to open 1,000 more supercenters in the U.S. alone over the next five years. Retail Forward estimates that this supercenter blitzkrieg will boost Wal-Mart's grocery and related revenues to $162 billion from the current $82 billion, giving it control over 35% of U.S. food sales and 25% of drugstore sales. Market-share gains of such magnitude in a slow-growth business necessarily will come at the expense of established competitors -- especially the unionized ones, which pay their workers 30% more on average than Wal-Mart does, according to the UFCW. Retail Forward predicts that for every new supercenter that Wal-Mart opens, two supermarkets will close, or 2,000 all told.

To the low-price, low-cost operator go the spoils. Isn't that how capitalism is supposed to work? Certainly, the supercentering of America can be expected to result in huge savings at the cash register. On average, a Wal-Mart supercenter offers prices 14% below its rivals', according to a 2002 study by UBS Warburg.

However, those everyday low prices come at a cost. As the number of supermarkets shrinks, more shoppers will have to travel farther from home and will find their buying increasingly restricted to merchandise that Wal-Mart chooses to sell -- a growing percentage of which may be the retailer's private-label goods, which now account for nearly 20% of sales. Meanwhile, the failure of hundreds of stores will cost their owners dearly and put thousands out of work, only some of whom will find jobs at Wal-Mart, most likely at lower pay. "It will be a sad day in this country if we wake up one morning and all we find is a Wal-Mart on every corner," says Gary E. Hawkins, CEO of Green Hills, a family-owned supermarket in Syracuse, N.Y.

For suppliers, too, Wal-Mart's relentless pricing pressure is a mixed blessing. "If you are good with data, are sophisticated, and have scale, Wal-Mart should be one of your most profitable customers," says a retired consumer-products executive. Unlike many retailers, the company does not charge "slotting fees" for access to its shelves and is unusually generous in sharing sales data with manufacturers. In return, though, Wal-Mart not only dictates delivery schedules and inventory levels but also heavily influences product specifications. In the end, many suppliers have to choose between designing goods their way or the Wal-Mart way. "Wal-Mart really is about driving the cost of a product down," says James A. Wier, CEO of Simplicity Manufacturing, a lawn-mower maker that decided to stop selling to Wal-Mart last fall. "When you drive the cost of a product down, you really can't deliver the high-quality product like we have."

Critics also argue that Wal-Mart's intensifying global pursuit of low-cost goods is partly to blame for the accelerating loss of U.S. manufacturing jobs to China and other low-wage nations. "It's hard to tease out, but Wal-Mart is definitely part of the dynamic, and given its market share and power, probably a significant part," says Jared Bernstein, a labor economist at the liberal Economic Policy Institute. The $12 billion worth of Chinese goods Wal-Mart bought in 2002 represented 10% of all U.S. imports from China.

For obvious reasons, Wal-Mart has de-emphasized the "Made in America" campaign that founder Sam Walton started in the mid-1980s to great promotional effect. "Where we have the option to source domestically we do," says Ken Eaton, Wal-Mart's senior vice-president for global procurement. However, he adds, "there are certain businesses, particularly in the U.S., where you just can't buy domestically anymore to the scale and value we need." In recent years, Wal-Mart increasingly has sought additional cost advantages by bypassing middlemen and buying finished goods and raw materials from foreign manufacturers. By contracting directly with a handful of denim manufacturers in Southeast Asia, the company has driven down the retail price of the George brand jeans it sells in Britain and Germany to $7.85 from $26.67. Says Eaton: "The mind-set around here is, we're agents for our customers."

"THE WAL-MART PHENOMENON" Wal-Mart's philosophy doesn't cut any ice with Wilbur L. Ross Jr., a financier and steel tycoon who soon will close on the purchase of beleaguered textile manufacturer Burlington Industries Inc. Ross contends that Wal-Mart is costing Americans jobs "not only as a business strategy, but as a lobbying strategy" -- that is, by using its influence in Washington to oppose import tariffs and quotas and promote free-trade pacts with Third World countries, including the Southeast Asian countries that supply Wal-Mart with denim. "Everybody is now scurrying around trying to find the lowest price points," Ross complains. "It's the Wal-Mart phenomenon."

High on a wall inside Wal-Mart headquarters is a paper banner with a provocative question in big block letters: "Who's taking your customers?" Beneath it, "Wanted" poster style, hang photos of the CEOs of two dozen of America's largest retailers -- Target (TGT ) Kroger (KR ) Winn-Dixie Stores (WIN ) Walgreen (WAG ), and so on. None looks very happy, perhaps because they know that the only way to get off the wall is to fail utterly. Although Kmart (KMRT ) is reorganizing under the federal bankruptcy code, a photo of its CEO continues to hang in Wal-Mart's rogues' gallery and no doubt will remain there for as long as Kmart operates even a single store.

Growth will only add to the clout that the Bentonville colossus now wields. There might well come a time, though, when Wal-Mart's size poses as much of a threat to the company itself as it does to outsiders. "Their biggest danger is just managing size," observes a longtime supplier. Adds Babson College's Hoopes: "The history of the last 150 years in retailing would say that if you don't like Wal-Mart, be patient. There will be new models eventually that will do Wal-Mart in, and Wal-Mart won't see it coming." Right now, though, Wal-Mart's day of reckoning seems a very long way off.

By Anthony Bianco and Wendy Zellner With Diane Brady, Mike France, Tom Lowry, Nanette Byrnes, and Susan Zegel in New York; Michael Arndt, Robert Berner, and Ann Therese Palmer in Chicago; and bureau reports

Chicago Tribune:  Class action no bargain for Wal-Mart

1.5 million could be added to bias suit by women
By Greg Burns Tribune senior correspondent
September 24, 2003

As sex discrimination cases go, the pending lawsuit against Wal-Mart Stores Inc. is nothing unusual except in one respect: Size.

At a pivotal hearing in San Francisco Wednesday, a federal judge will consider arguments about whether the case, brought by a half-dozen individuals, should expand to encompass a staggering 1.5 million of the retail giant's current and former employees.

If U.S. District Judge Martin Jenkins certifies the case as a class action, all the women who worked for the nation's largest employer between the end of 1998 and the end of 2002 could be eligible for back wages. That would make it the biggest-ever class-action litigation involving civil rights, attorneys in the case say.

At issue is whether Wal-Mart, the world's largest private employer, systematically discriminated against women in its pay and promotion policies.

But the sheer scale of the litigation has become the overarching factor. Class-action status for such a large case would break new ground in a controversial arena of the law that critics consider out of control and proponents view as a vital check on corporate power.

Wal-Mart's status as a respected model for other large employers raises the stakes as well, especially with the rise of megacompanies whose practices directly affect hundreds of thousands at a time.

Among its defenses, Wal-Mart has said its adversaries are trying to hold it responsible for a long-established phenomenon in the American workplace: "The undisputed fact, present in virtually every major corporation, that the percentage of women at the lower level is higher than the percentage at the upper level," according to documents in the case.

In the hearing Wednesday, attorneys for the Bentonville, Ark.-based retailer are expected to argue that because its operations are so large and varied, the experiences of a few employees never could be entirely representative. The lawsuit would create conflicts by lumping together in a single class the company's bottom-rung cashiers, for instance, with its 544 women store managers who supervised them.

Since Wal-Mart has so many different departments under one roof, taking action against the entire company is akin to suing "all the shops" on main streets from Alaska to Florida, the company said.

But by pursuing a "too-big-to-sue" defense, "Wal-Mart is seeking a large-company exemption from civil rights law," countered Joseph Sellers, one of several attorneys bringing the discrimination case. "If Wal-Mart can get away with it because of its size and deep pockets, it's going to speak volumes."

The issue of class certification is the most significant hurdle, observers maintain.

Given the "astronomical" resources of Wal-Mart, its low-wage women employees have no practical means besides class-action litigation to enforce their rights, the plaintiffs said in court documents. Wal-Mart "knows that if it can defeat class certification, it will not be held accountable for its conduct."

Logistical nightmare

Yet proceeding with a vast class action would be unfair to Wal-Mart as well as a logistical nightmare for the legal system, countered corporate spokeswoman Sarah Clark. "No court has ever certified a class like this before," she said. "It's simply not possible for the experiences of so few to represent so many."

In practice, certification almost surely would compel Wal-Mart to settle, no matter the merits of its arguments, said Lester Brickman, a law professor at Yeshiva University and a critic of class-action practices.

Even if the company believed it had a strong case, the consequences of losing such massive litigation would be too great a risk to run, he said. The decision on whether to certify the class is "the whole ball game," he said. "There is either a home run or an out."

The case turns on a dispute over the statistical analysis of Wal-Mart's workforce, as defined by dueling expert witnesses. That, attorneys say, is a fairly common approach to sex-discrimination cases.

On the plaintiff's side, the numbers show that Wal-Mart pays women less than men in every part of the country where it operates and in nearly every job, from sales associate to district manager. And although women account for two-thirds of lower-paid hourly workers, they receive only one-third of all promotions into management.

The pay disparity generally rises in more senior posts, with the earnings of male regional vice presidents averaging $419,435 a year as of 2001, or 50 percent more than the $279,772 average for the relatively few women in those high-ranking jobs.

Even among cashiers, male employees earned $14,525 to $13,831 for women, who generally received higher performance ratings.

Until recently, Wal-Mart selected management trainees entirely through a "tap on the shoulder" system, allowing store managers discretion over who was considered, that plaintiffs brand as arbitrary and overly subjective.

As a result, the plaintiffs say, Wal-Mart has maintained a pervasive male-oriented culture typified by an annual retreat for senior management that revolves around a quail hunt.

Wal-Mart flatly disputes the allegation that it discriminates. "Wal-Mart is a great place for women," said spokeswoman Clark. "The plaintiffs have a huge burden of proof to meet."

Statistical analysis

Among the challenges is a competing statistical analysis by a Wal-Mart expert that focuses on how many women who apply for higher positions actually get the promotions. While the plaintiffs say the application process is flawed, "Women at Wal-Mart are more successful than men at securing the positions they seek," the expert concluded.

Of 41,000 applicants to the position of support manager, 46.1 percent were women, and 47.2 percent of those getting the promotions in the period covered by the lawsuit were women, according to Wal-Mart.

Similarly, promotions of women to higher-salaried positions such as store managers exceeded the rate at which women applied. And differences in pay become statistically insignificant when adjusted for factors such as the size and type of store, the company said in court documents.

Judge Jenkins is expected to hear several hours of argument Wednesday, but his ruling could be weeks or months away.

Some advocates for using class-action litigation to bring about change in the workplace see great potential in the case.

"Litigation is so difficult for individuals. In groups, they have more power," said Sheribel Rothenberg, a Chicago attorney who focuses on employment issues. "It's like this generation's unionization. Class actions serve some of the same functions."

But others say that partly because of its size, the case is unlikely to move ahead.

"The policies and data probably do vary by store," said John Beisner, a Washington attorney who specializes in defending against class actions. "It's probably fairly difficult to certify."

Copyright (c) 2003, Chicago Tribune

Arizona Daily Star:  'Big box' ordinance is OK'd by judge

By Eric Swedlund 
24 September 2003

A Pima County judge Friday upheld Tucson's "big box" ordinance, rejecting Wal-Mart's claims that the ordinance was unconstitutional, violated open meeting laws and harmed the retailer.

Superior Court Judge Charles S. Sabalos ruled that "Wal-Mart does not have standing to complain about the legality or constitutionality" of the ordinance the City Council passed Sept. 27, 1999. It limits the size of grocery sections in stores larger than 100,000 square feet and requires such stores to get special approval of plans for dealing with noise, lights and traffic.

Wal-Mart filed suit in October 2000, arguing that new city regulations violated the state's Open Meeting Law because amendments the council made immediately before approving the ordinance were not publicized ahead of time, exceeded the city's power to set zoning regulations and did not serve a "legitimate governmental purpose." The suit said it was designed to protect grocery stores from competition.

In the ruling, Sabalos wrote that the ordinance serves government purpose in mitigating the effects of "economic and aesthetic blighting of residential areas when conveniently located grocery stores within the neighborhood shopping centers, often anchor stores, close their operations due to competition from Big Box establishments."

The judge agreed with all of the city's points, specifically that since Wal-Mart never applied for an exception to the regulations it could not prove harm or challenge the constitutionality of the ordinance, said City Attorney Michael House.

Wal-Mart stole his ideas and employees, businessman says in lawsuit

16 September 2003
The Miami Herald
 A Vero Beach businessman announced a $1 billion lawsuit against Wal-Mart Tuesday, charging the retail giant of a conspiracy to steal his business.
Jeffrey Saull, owner and manager of Tijid and Palm Beach Home Accents, which manufactures, imports and sells office chairs and candles, among other products, said a former partner collaborated with Wal-Mart to steal his design ideas and talented employees since 2002, according in a lawsuit filed in Indian River County. When he confronted Wal-Mart executives about this, they said they would do something about it, but they did not, he alleged.
Two weeks ago Wal-Mart stopped stopped buying products from his firm.
''Why do I want to be David going up against Goliath?'' said Saull, who said he had to lay-off two-thirds of his 50-person staff this month after losing the Wal-Mart account. ``I wonder if Wal-Mart could do this to me, a longtime partner, what they would do to others. This is one mom and pop company Wal-Mart won't be running out of town.''
Suzanne Haney, a Wal-Mart spokesperson, said the company would have no comment until later today.
Willie E. Gary, Saull's attorney, said he expected to win the case. ''We don't come seeking charity,'' he said. ``We want a clean fight. We're prepared for war.''

Wal-Mart set to pay ex-worker $150,000 to settle EEOC suit

13 September 2003 
The Arkansas Democrat Gazette 41 

Wal-Mart Stores and the Equal Employment Opportunity Commission on Thursday settled a year-long suit filed in U.S. District Court for the Eastern District of Texas charging the company retaliated against a worker at a Texarkana store after she filed a sexual harassment complaint in 1999.

The Bentonville company agreed to pay $150,000 to former employee Marcia Mitchell. In addition, Wal-Mart said it would monitor Miller's former boss, Deshun White, the store's bakery manager.

In the suit, Mitchell accused White of subjecting her to a hostile work environment and barraging her with unwelcome comments and touches. When she complained, she was transferred out of the bakery to a job in the hardware department, according to the suit. That job, the suit said, involved heavy lifting.

The EEOC claimed that the transfer was retaliatory, made without proper investigation into Mitchell's complaint and effectively led to her discharge from the company.

Wal-Mart also agreed to post information throughout the store informing employees about Title VII of the Civil Rights Act of 1964, which protects workers from discrimination based on race, color, religion, sex or national origin. Wal-Mart also will provide training for its managers at the Texarkana store.

"We are pleased the company has taken this proactive step to ensure that harassment doesn't happen again, and if it does, they'll act accordingly," said Devika S. Dubey, senior trial attorney for the EEOC in Dallas.

Wal-Mart did not admit guilt in the case. Instead, the company opted to settle, calling the move, a "business decision," said Sarah Clark, a Wal-Mart spokesman.

"We found no evidence supporting allegations that Wal-Mart or any of its associates engaged in any wrongdoing," Clark said.

Clark declined to further describe the decision, saying it was in the best interests of the company's employees, customers and shareholders to settle the case.

She added that Mitchell was transferred out of the bakery department to accommodate her request to work only three days a week. Such a shift was available in the hardware department, Clark said.

Starting this year, Wal-Mart managers must take a two-hour training seminar on sexual harassment law, Clark said. All employees receive information on appropriate workplace behavior in handbooks, Clark said. In addition, all workers receive computer training that focuses on sexual harassment.

"They are required to take it," she said of the computer class.

Wal-Mart has more than 1.3 million employees internationally. The company would not comment on the number of EEOC complaints that have been filed against it. The EEOC does not release information on the number of charges made against a particular company.

In the retail sector nationwide, the commission received 8,272 charge filings in fiscal 2003, which ends Sept. 30. The filings reflect all charges filed by retail industry employees, not just sexual-discrimination complaints. In fiscal 2002, the commission received 9,737 charges. In Arkansas, the EEOC received 230 charges from retail employees so far this fiscal year, down from 310 last year.

In all sectors nationwide, the EEOC received 61,459 Title VII charges in 2002. Of those, 21.2 percent received "Merit Resolutions," a term the EEOC defines as having outcomes favorable to the charging parties or charges with meritorious allegations.

As a last resort, the EEOC said, charges result in litigation against a company. The company currently has two Title VII cases - one in Alabama and one in Kentucky - pending versus Wal-Mart.

San Marcos Wal-Mart story 

By John Berhman

September 12, 2003

SAN MARCOS – In a stunning reversal, Councilman Lee Thibadeau says he will
probably change his vote on a controversial Wal-Mart store approved for
southwest San Marcos.

That would mean a 3-2 vote for the project – which residents who live near
the site have been fighting for months – would almost certainly become a
3-2 vote rejecting it.

"I don't want to put the city through what I think will be a very nasty
campaign," Thibadeau said yesterday.

Thibadeau was referring to a well-organized initiative drive by a group
called Citizens for Responsible Growth in San Marcos, which opposes the
store. It submitted petitions Monday with about 4,400 signatures asking
that the council rescind its approval of the project. If the council
doesn't do that, it will have to put the issue on the March 2 ballot.

"I'd be thrilled if Mr. Thibadeau changed his vote," Laura Meyers, one of
the group's leaders, said yesterday. "It has been our goal all along. The
people don't want this (store)."

Peter Kanelos, a spokesman for Wal-Mart, said he would not speculate on
what the council might do when presented with the referendum – which the
Registrar of Voters has not yet verified has the required 2,421 valid
signatures – or what action Wal-Mart would take.

"What I would like to know is who paid for the collection of the
signatures," Kanelos said, suggesting the Teamsters Union and the grocery
clerks union may have done so.

Wal-Mart has consistently opposed unionization of its stores.

Meyers said most of the money came from contributions from residents and
about 50 signature gatherers were volunteers, while a dozen were paid.
Leonard Miller, also a member of the group, said the manner in which the
signature drive was financed would be disclosed in financial statements
required by the state.

The store would be built on 20 acres at the northeast corner of Rancho
Santa Fe Road and a future alignment of Melrose Drive, in the University
Commons development. University Commons had no plans for the store until
city officials asked that a 300-unit condominium project be eliminated to
make room for one. Wal-Mart had approached the city seeking a site for a
second store in San Marcos.

The council approved the store in August after a 5-2 vote against it by
the city Planning Commission.

Yesterday, Thibadeau said he was impressed with the opponents' efforts and
always had concerns about traffic and noise from the store.

"I give the Wal-Mart opponents credit," he said. "They exhausted the
legislative process, going to the city Planning Commission and the
council. And then going the referendum route.

"I want to do what is best for the whole community. But why put these
people and the city through this whole campaign process?"

But Thibadeau has another motive for not having the potentially divisive
Wal-Mart question on the March ballot.

The same ballot will also contain a measure, financed by San Diego Gas &
Electric, intended to slow or block the city's effort to find another
company to provide gas and electricity in new developments in San Marcos.
The city is planning on placing a competing measure regarding the energy
question on the March 2 ballot.

For more than two years, Thibadeau has been the most vocal supporter of
the city's dumping SDG&E for another company, along with Mayor Corky Smith
and Councilman Mike Preston. They are the same three who approved the

"I think there is a more important battle that will be on that ballot,"
Thibadeau said yesterday, referring to the dueling city and SDG&E

Smith and Preston said though they will reconsider their Wal-Mart vote, as
the referendum would require, they remain supportive.

"I haven't made up my mind yet, but there are still some things that
bother me about this," Smith said. "I still feel that a lot of the people
who are against this don't even live in the city, and they want to come in
and tell us what to do."

Wal-Mart opponents, many of whom live in Carlsbad and unincorporated
areas, counter that getting an issue on the ballot required that they
collect signatures only in San Marcos and that the signatures came from
all over the city.

"I also don't like the idea that their two referendums put the entire
University Commons project in jeopardy," Smith added.

Wal-Mart opponents collected signatures for two measures. One would
prohibit a store on the proposed 20-acre site, the second would prohibit
one on any of University Commons' 416-acre property. Smith said the way
the second referendum is written, the entire 1,224-unit University Commons
project will be put on hold if it passes.

Preston said it "was pretty impressive" that store opponents collected so
many signatures in only 10 days, "but I also don't know if people knew
what they were signing. It was a couple of pretty lengthy documents. I
will rethink the issue though."

City Clerk Susie Vasquez said yesterday she probably will send the
signatures to the county Registrar of Voters next week. That office will
have 30 working days to verify signatures.


Wal-Mart's Standard of Living
15 September 2003
The Washington Post
In his Sept. 10 letter defending Wal-Mart, Jay Allen said the chain's full- and part-time workers were "eligible" for benefits. But that does not mean that these workers can afford the benefits because their "competitive" salaries may not allow for buying into insurance in addition to paying living expenses. Many of the families that the Wal-Mart senior vice president mentioned as living "paycheck to paycheck" include people working at Wal-Mart.
Further, the fact that these families live hand to mouth does not justify the chain's buying clothing and toys from nations that exploit their workers. Wal-Mart could slash its profit margins and buy from responsible nations while still offering good prices.
Mr. Allen said Wal-Mart "[raises] the standard of living for millions of U.S. families every day," but charging someone $2 less for a bag of chips does not raise one's standard of living. However, paying the employee who rings up that bag of chips $2 more an hour just might.
Is Wal-Mart the devil incarnate? No.
But is it a savior, sent down from on high to save the poor and hungry as Mr. Allen would have readers believe? Definitely not.
Wal-Mart union drive heats up; charges filed
Grace Leong THE DAILY HERALD on Saturday, September 13
A union organizing drive at the Wal-Mart Supercenter at 1355 S. Sandhill Road in Orem is intensifying with the filing of unfair labor practice charges against the nation's largest retailer.
The Orem store is the first Wal-Mart in Utah that's accused of federal labor law violations by the United Food and Commercial Workers International in Washington, D.C., said officials with the National Labor Relations Board.
The UFCW International filed charges with the National Labor Relations Board on Sept. 5, accusing Wal-Mart of violating federal labor laws in its efforts to discourage its Orem workers from supporting a petition for an election for union
The NLRB, a federal agency charged with investigating unfair labor practices, said it is now investigating the union's charges. If the charges have merit, the NLRB will issue a complaint against Wal-Mart.
Wal-Mart officials declined to comment on the union's charges about unfair labor practices.
In Las Vegas, where the UFCW's national organizing drive of the giant retailer originated, an administrative law judge, acting on an NLRB complaint, had ruled in January 2002 that Wal-Mart was to post notices at three Las Vegas-area stores pledging, among other things, to obey the law and stop preventing its employees from distributing union materials.
In recent months, organized labor has escalated efforts to unionize Wal-Mart stores after several years of failing to organize a single store.
The Orem store workers now are in the process of gathering the required number of signatures to force a vote. Once 30 percent of the Orem store's 500 workers have signed in support of an NLRB-held election, federal law requires the store to allow a vote on a union.
UFCW alleged in the charges that Wal-Mart violated federal labor laws by surveilling and interrogating workers about their union activities and implementing work policies "intended to interfere with the employees' rights to organize."
Wal-Mart also was accused of "soliciting grievances from employees and granting benefits to employees" who whistle-blew about union-friendly workers, the union said.
The union said Wal-Mart violated federal labor laws by failing to have a union representative or co-worker present during investigatory meetings with its worker, Bret Pope.
Pope, a Wal-Mart worker for more than nine years, said the company allegedly failed to take steps to resolve sexual harassment complaints he had filed with Wal-Mart management against a supervisor and failed to allow a co-worker to be present during meetings he had with Wal-Mart management about his complaints and concerns about being watched.
"They also installed several surveillance cameras at my service desk and asked other workers about my union activities," he said.
Shawn Mansell, a sales clerk at the Orem store for more than three years, alleged Wal-Mart forced workers to attend mandatory anti-union meetings and hired union busters to discourage union support since the organizing drive began in June at the Orem store.
Fueling the organizing drive in Orem is a growing disenfranchisement of many Wal-Mart workers with the company's wage policies and working conditions, the union said. UFCW officials said they fear Wal-Mart would drag down hourly wage standards, charging the average wage for Wal-Mart workers is $7.50-$8.50 an hour, while unionized workers with two or more years of experience earn about $12.51 an hour with an hourly increase of 25 cents annually thereafter.
UFCW Local 711 represents workers in Utah and Nevada, including Smith's and Albertson's grocery store employees in Utah County.
But Christi Gallagher, a Wal-Mart spokeswoman, disputed the union's allegations about wages and benefits.
"Before we go into a market, we do a competitive wage analysis to make sure we're competitive with all retailers, both union and non-union," she said. "We don't start at minimum wage at any of our stores in the country. Our benefits include profit sharing plan, 401(k), stock purchase plans and medical benefits."
Grace Leong can be
reached at 344-2910 or gleong@heraldextra.com.


Wal-Mart exports anti-union stance to China   
 By Richard McGregor in Shanghai                                           
 Published: September 10 2003 14:46
 Wal-Mart has long battled to keep unions out of its stores in the US. Now,  the world's largest retailer has picked the same fight in China.          
 The All-China Federation of Trade Unions, which oversees all workers'  organisations in the country, said it has been repeatedly rebuffed in an   effort to establish unions in Wal-Mart outlets.                           
 The federation says all companies, foreign and local, are required to  establish a union under its supervision, using funds from a 2 per cent  levy on wages.                                                            
 "Many times we have tried to talk to Wal-Mart about this, but they knock   us back with excuses, like the boss is not in, and so on," said an  official at the federation in Beijing.                                    
 "We want to tell them that unions in China are not troublemakers - they  help the company "develop".                                                                                                                                                                                       
 As sceptical as Wal-Mart might be about such claims, Chinese unions have  traditionally been an instrument for the Communist party to control       
 workers, not a vehicle for agitation and strikes, which are almost never   allowed.                                                                                                                        
 The federation said that about 90 per cent of foreign companies had   co-operated with it in one form or another, and it would continue to press  Wal-Mart.                                                                 
 Yuan Jizhong, another federation official, said the "Beijing party   committee had paid great attention to this issue and had held special   meetings about it."                                                       
 "The task is very difficult, but we will carry on," Mr Yuan said.         
 Wal-Mart has 27 stores in China and sources about $10bn worth of goods from the mainland every year, according to US government estimates, or about a tenth of all Chinese exports to the US.                           
 A spokesman for Wal-Mart could not be reached, but a company official in  Shenzhen, Zeng Qiang, told Reuters: "We're not prepared to make a         
 statement at this time."


Wal-Mart sued for labor abuses

Pioneer Press

11 September 2003
Debbie Simonson was asked to straighten up her area of the Wal-Mart store in Brooklyn Park at the beginning and end of her shifts when she worked there in 2000 and 2001. She followed her supervisor's requests to work "off the clock," passing out promotional items to customers, assembling candy bags and clearing carts from the parking lot.
Most often, she didn't get meal or rest breaks, and after she was promoted to supervise cashiers, the store was so understaffed that there was never anyone to relieve them for breaks.
She complained to higher-ups but nothing changed. "They didn't care," she said. "It wasn't a priority."
Now Simonson is fighting back by suing her former employer, the nation's largest retailer. On Friday, she and three other women will ask a Dakota County District Court to give them class-action status on behalf of 63,000 current and former workers in Minnesota. Their lawyers estimate that Wal-Mart workers across the state lost tens of millions of dollars in wages and 500,000 hours of breaks per year since 1998.
Complaints such as these are at issue in similar lawsuits filed across the country against Wal-Mart by its employees. Wal-Mart says there are 37 separate off-the-clock cases seeking class-action status in 29 states.
Wal-Mart is opposing the Minnesota motion for class certification.
"This lawsuit alleges that the plaintiffs deviated from company policy for many highly individualized and personal reasons, which make this case unsuitable to be pursued as a class action," said Christi Gallagher, a Wal-Mart spokeswoman in Bentonville, Ark.
Simonson, Nancy Braun, Cindy Severson and Pamela Reinert contend that employees were forced to work without getting paid in order to meet Wal-Mart's profit and productivity goals.
"It's important to speak up and hold our ground," Simonson said Wednesday. "They have to comply with the law."
In five cases elsewhere, courts have denied the class certification that the Minnesota women are seeking. A court in Indiana recently certified one class action. Two years ago, a class action was certified in Colorado and then settled for a reported $50 million. In late December, a Portland, Ore., jury found Wal-Mart guilty of violating federal and state wage-and-hour laws in requiring employees to work "off the clock."
Gallagher points to Wal-Mart's policy outlined in a handbook that reminds employees to clock in at the beginning of the workday. "Remember that working off the clock is not only against Wal-Mart policy -- it's against the law," it says.
Wal-Mart's policy allows employees a paid rest break for every three hours worked and an unpaid meal period of at least 30 minutes for every six hours worked.
"Wal-Mart's policy is to pay its associates for every minute that they work," Gallagher said. Individual managers who deviate from Wal-Mart policy are subject to disciplinary action, including termination, she said.
Minnesota labor law says workers are entitled to time to use the nearest restroom within each four consecutive hours of work and mealtime for every eight or more consecutive hours worked.
According to the women's lawsuit, Wal-Mart's violations stem from a deeply ingrained corporate culture of maximizing profits as the one and only objective.
Managers feel so pressured to meet ambitious financial goals, the suit says, that they keep down labor costs by altering time cards or getting employees to work off the clock before and after their shifts.
One time clock report from the Apple Valley store shows that one of the sales associates worked 8.28 hours of overtime. On the same report, a handwritten note states: "needs 8.28 hours taken off," according to court records.
Simonson's time records in one case were edited to insert a punch-out time of 6:58 a.m., one minute after she started her day. Braun's store manager at the Apple Valley Wal-Mart asked her to place frozen food deliveries in the freezer before clocking in at the beginning of her shift, the suit says. She also was asked after clocking out in the afternoon to stay for an extra 15 or 30 minutes to help out at the in-store eatery.
Reinert says she frequently was asked to work for 15 to 30 minutes after clocking out at four different Twin Cities Sam's Clubs, where she had jobs in personnel, payroll and as an assistant manager.
Severson said when she went shopping with her kids one day at the Brooklyn Park Wal-Mart where she worked, her store manager asked her to help in the customer service area. She says she ended up working 11/2 hours without being scheduled or clocking in.
The women earned between $5.46 and $10 per hour and worked at Wal-Mart and Sam's Club stores from 1997 through 2001.
"These were the lowest-paid of our working poor," said Jonathan Parritz, one of the plaintiff's attorneys arguing the case. "They were slightly above minimum wage but not much."
Between 15 and 25 Wal-Mart workers a week call Al Zack, an official with the United Food & Commercial Workers union in Washington, D.C. Zack, who is leading the effort to organize Wal-Mart workers nationwide, says one of the top complaints is the "off-the-clock" work.
"Wal-Mart is a different kettle of fish simply because of its size," Zack said, adding that Wal-Mart is extraordinary among retailers in its intense focus on minimizing costs. Managers will do anything, he said, including chiseling 15 minutes off of a time card, to get in line with the numbers.
In the Oregon case, 400 current and former employees joined the litigation. What convinced the jury?
"Hearing similar stories from workers from around the state, who didn't know each other, hadn't met each other but had described the same experiences while working at different Wal-Marts," said James Piotrowski, the plaintiff's attorney in the case. A damages trial is set for Jan. 6.
Attorneys representing the Minnesota plaintiffs said they plan to use statistical evidence as well as an internal audit by Wal-Mart to make their case. They also will use Wal-Mart's own employee handbook and policies to prove that Wal-Mart breached promises to its employees when it failed to pay them for hours worked and to give them rest and meal breaks.
The women in Minnesota also are relying on an important precedent in their case. The Minnesota Supreme Court has recognized that an employer's published policies can create a contractual obligation to its employees.

]Wal-Mart Government Perks Raise Questions

By David Sedore, Palm Beach Post Staff Writer
Sunday, August 31, 2003
MACCLENNY -- On the eastern outskirts of this North Florida town, where U.S. 90 makes a long, slow rise, behemoth trucks turn off the two-lane highway into an industrial park that emerges from the surrounding pine woods.
Their destination is a Wal-Mart distribution center, a sprawling, low-slung building where trailers filled with meats, produce and foodstuffs of all sorts are unloaded, sorted and reloaded for shipment to company stores as far north as Charleston, S.C., as far south as Daytona Beach and as far west as Tallahassee.
For Macclenny and surrounding Baker County, where the biggest employer is a state hospital and No. 3 is a state prison, the traffic means jobs, good jobs. Nearly 700, in fact. The jobs are there because the city leveraged its location and workforce with $8.9 million in corporate goodies -- free land and tax credits -- to beat unknown, unnamed rivals to the north trying to woo the retail giant.
Wal-Mart hopes Palm Beach County officials also will be accommodating, as it looks to build a food distribution center on a tract just west of Royal Palm Beach and Wellington on Southern Boulevard, according to sources familiar with negotiations. Like Macclenny, Palm Beach County faces competition from the north in Brevard County.
But a deal to bag the project raises the question not only of whether the price -- believed to be as high as $10 million -- is worth it but also of whether a county with an already booming economy should still be in the business of paying for jobs.
"I want this project here," says Larry Pelton, president of the Business Development Board of Palm Beach County, the private agency that oversees local economic development efforts. "But we have to be realistic. If it's going to happen, it's going to happen because a private landowner and the company agree on a price that makes the project feasible.
"I have never, nor would I ever, ask the county to ante up $10 million."
Pelton legally could not confirm that Wal-Mart is interested in Palm Beach County, but he did say a major company is looking at the site, now owned by Palm Beach Aggregates. The site offers strong transportation links convenient to all points in South Florida, he says. It's also cheaper to ship from Palm Beach County than Brevard.
The problem is site cost. The Southern Boulevard property is about $10 million more than the Brevard competitor's. Pelton hopes the site owners will work out a deal with the company rather than rely on government to put together a large package of grants and tax credits to get it done. The project is on hold temporarily, which might give the sides more time to work out the numbers.
"I want the project, and I think it's going to bring jobs," says Commissioner Addie Greene, whose district includes Belle Glade, where unemployment is high and good jobs are scarce. "But does it make sense? Do they seem like they need your financial support?
"Give me a break."
Company officials declined to comment on the project.
St. Lucie OKs $1.2 million
St. Lucie County recently agreed to give Wal-Mart $1 million in cash through that county's Job Growth Incentive Fund for construction of a 1.2 million-square-foot regional distribution center that is to be built near Fort Pierce. It will employ about 1,000. The county's also throwing in $200,000 worth of dirt for the site, plus some office space while the center is being built.
St. Lucie is extending a road to the site at a cost of more than $8 million, a project that County Administrator Doug Anderson says was already in the works. It's also extending utilities, but those will also be available to other customers.
Wal-Mart's distribution system, unglamorous as it may sound, is one of the not-so-secret weapons that has put it atop the Fortune 500. It's part of what makes Wal-Mart one of the most feared, and admired, companies in the world.
For the fiscal year ended Jan. 31, Wal-Mart earned $8 billion on revenue of $244.5 billion. It had 1,568 discount stores, 1,258 Supercenters, 525 Sam's Clubs and 49 Neighborhood Markets -- the latter a relatively new concept that sells mainly groceries.
At Wal-Mart's strategic core, however, is the 84 distribution centers that feed those stores. It is rapidly opening new ones to support its breakneck growth and major push into groceries. And populous Florida is clearly in its sights.
Besides Macclenny, Wal-Mart has a regional center in Ridge Manor that handles general merchandise and a food center in Winter Haven. It's planning a regional center in Alachua, although on hold, and is building a food distribution center in Arcadia on the DeSoto County-Charlotte County line.
While building this network of distribution centers, Wal-Mart generally expects, and has gotten, a fair amount of government help. Since the 1980s, the giant retailer has received at least $150 million in municipal, county, state and even federal incentives to open 47 distribution centers in 32 states, according to a study by The Palm Beach Post.
The study is based on government and agency documents, interviews, Wal-Mart news releases and published accounts of distribution center construction and openings.
The $150 million includes only incentives quantified in the reports. That number probably would grow by tens of millions if unquantified breaks, such as government bond financing for construction, and ongoing breaks, such as those given to businesses in enterprise zones, were included.
Many types of incentive
The deals, usually paid out over a period of years, include just about every type of incentive that government can create: cash, free land, tax abatements and credits, money for roads, utilities and worker training. Some use a portion of employees' state taxes to pay construction costs; some use a portion of taxes the company would pay to local governments to finance the project.
Among the more notable deals:
• Lewiston, Maine, provided Wal-Mart with $17 million in state and local incentives in February 2002 for a 400,000-square-foot food distribution center that is to employ 150 workers when it opens in 2005. The package, the largest Wal-Mart has received, included free land and water and sewer improvements.
• Bartlesville, Okla., gave Wal-Mart $9 million for an 893,000-square-foot food center that is to employ 700 after it opens in 2004. Former Gov. Frank Keating attended the groundbreaking, heralding the incentives and the state's new right-to-work law for their part in attracting the center.
• Pageland, S.C., provided $7 million for a food center that opened in 1997 and paid its workers $8 an hour. Neighboring North Carolina bemoaned its inability to compete with South Carolina, but in 2002, Wal-Mart opened centers in Shelby and Henderson; in Shelby, Wal-Mart received $2.1 million.
Biggest offer: $46 million
But the king of deals came from Killingly, a town of 16,400 on the Quinebaug River in northeast Connecticut. It offered Wal-Mart $46 million for a 1.2 million-square-foot center that would have employed 1,000.
James Reck, a member of the town's conservation commission, said opposition to the project first focused on the proposed location and the effects of having hundreds of trucks a day roll through town.
"The site was about a thousand feet from an old-age home, maybe 2,000 feet from an elementary school," Reck said. "It was a bad spot altogether."
Reck filed freedom of information requests with the town and the state seeking details of the incentive package. What he found amazed him: a state grant for buying equipment; funding for utilities and highway improvements; tax credits and exemptions; no property taxes for five years; enterprise zone credits; employee training and more.
"It was all a secret," Reck said. "We just kind of blew the lid off it. The state of Connecticut is in a terrible financial crisis. How can it give one of the largest companies in the world $40 million when it's cutting funds to schools?"
David Flanagan, an unemployed truck driver who lives in the town, has a one-word answer: jobs.
Killingly's unemployment rate has ranged as high as 7.3 percent, third highest in the state, Flanagan says. The town has an industrial heritage, mostly making textiles, and most of the population in the region is blue collar, so a Wal-Mart distribution center would be perfect.
"There's this piece of land that's undeveloped, a prime piece of land that Wal-Mart could use," Flanagan says. "All it would do is help bring in more business."
Flanagan, defending the hefty incentive package, says the state would have reimbursed Killingly for its portion, and other benefits offered would go to any business that would go into that site.
Killingly's zoning board effectively killed the deal in March, when it voted 4-1 against a change in the property's zoning. Flanagan says there's still hope that Wal-Mart will build a center, either at that site or in a nearby town.
Little debate needed
There was little debate, however, in Lewiston over the $17 million package that Wal-Mart received in 2002.
"Certainly, there have been the occasional naysayers who say the town paid too much," says Lincoln Jeffers, Lewiston's deputy director of economic and community development. "We've had a tremendous outpouring of support; the business community has overwhelmingly spoken in its favor."
Much of the money is being spent on projects the city had planned already, Jeffers says. It also was needed to "level the playing field" with competitor sites.
Lewiston is the classic New England town, its fortune based on mills powered by the fast-running waters of the Androscoggin River. The Bates Mill, which helped clothe the Army of the Potomac during the Civil War, once employed as many as 6,000 workers, making it Maine's largest employer.
As the economy sagged, employment at the mill dropped to fewer than 100 by the 1990s. Lewiston leaders turned the mill into a business park and have worked to diversify the region's economy. The city has become a center for financial and health-care services and other businesses; unemployment is about 4 percent, well below the national average.
That raises the question again: Why $17 million for a Wal-Mart distribution center?
"The reason why we're thriving is because we are aggressive," Jeffers says.
But not all Wal-Mart projects require incentives. The company paid full freight, and even helped Raymond, N.H., buy a fire truck when it built a distribution center there in 1996.
It turned down $1.3 million from Apple Valley, Calif.; if it accepted government help, it would have had to comply with the state's prevailing wage law while constructing the building, which would have jacked up costs substantially.
Support is widespread
Support for economic incentives is widespread and crosses both party and ideological lines. But some argue that incentives are corporate welfare and wasteful at a time when many states are starved for cash.
Nebraskans for Peace and Justice, a group founded in 1972 to oppose the Vietnam War, is debating whether to move forward on a ballot initiative to end the state's tax-credit program, which, it says has cost Nebraska $1.5 billion since 1987. Wal-Mart is one the recipients: $5 million for a food center in North Platte.
"They've cut programs for children, for education, four straight times," says Tim Rinne, the group's state coordinator, referring to the legislature. "Big business has never been touched."
He doesn't oppose incentives entirely but says they should be used sparingly.
Robert Lynch, chairman of the economics department at Washington College in Chesterfield, Md., says factors other than incentives determine where businesses put down roots: the cost and quality of the workforce, transportation, cost of housing and quality of life, to name a few. To base the decision on state and local taxes is "completely irrational.
"I don't know this for a fact, of course, but I'd bet they've already decided where they want to go," Lynch says of Wal-Mart's proposed South Florida food distribution center. "They're trying to get the best tax deal they can" for that site.
Barry Atwood, an adjunct government professor at Florida Atlantic University and finance director at Fort Lauderdale-Hollywood International Airport, says incentives work, but it's an unknown just how big a factor they play in a given decision.
"Quite frankly, it's money that's going to be spent anyway," Atwood says. "It's a matter of policy priorities."
Officials in Macclenny, 15 months after the Wal-Mart center opened, say their policy priority was the right one. Few in the town of about 5,000 voice any complaints about the center or the financial package given to Wal-Mart.
"It's been nothing but a plus for us," says Ginger Baker, executive director of the Baker County Economic Development Commission and the Baker County Chamber of Commerce. "They're very, very good neighbors. The rest of the state, where the economy depends on tourism or the airlines, is going through a downturn. Our economy is booming."


Wal-Mart settles EEOC complaint

23 August 2003

Wal-Mart Stores has agreed to pay $140,000 to a black worker whose complaint led to a lawsuit accusing the giant retail company of paying black employees who unload trucks and stock shelves less than Anglo and Hispanic workers.

Under terms of the agreement with the Equal Employment Opportunity Commission, Wal-Mart will pay Billy Simmons, 61, who made the complaint after being passed over for a promotion at the company's Webster store. It will also pay $3,500 that the EEOC will divide between two to four black employees who had received lower raises.

Also, Simmons, who worked at the Webster store for six years, agreed to quit.

Wal-Mart did not admit that it violated any civil rights laws. It also specifically denied all of the allegations by the EEOC and Simmons that it discriminated against employees based on race, according to the consent decree signed by Judge Nancy Atlas earlier this week.

Tim Bowne, the EEOC attorney in charge of the case, said the standard annual raise for unloaders was 4 percent to 5 percent.

Although black unloaders didn't receive a boost of more than 5 percent, some of the Hispanic and white workers got raises in the 15 percent to 27 percent range, Bowne said.

In one year, one of the Hispanic unloaders earned $50,000, more than twice as much as Simmons, Bowne said.

Simmons wasn't given as many overtime hours as some of the Hispanic unloaders, he said.

Black unloaders also started at $7 to $9 an hour and never went beyond $10 an hour, Bowne said. Hispanic and white unloaders, however, started at a higher wage level and got up to $11 and $12 an hour.

Simmons' attorney, Ronald Reynolds, said he couldn't comment because of a separate confidentiality agreement with Wal-Mart.

Wal-Mart spokesman Tom Williams also said he couldn't comment because of the confidentiality agreement.


Wal-mart Urged to Establish Trade Unions in China

August 26, 2003

Wal-mart, the world's biggest retailer, is facing pressure in China to establish trade unions for thousands of employees.

The All-China Federation of Trade Unions (ACFTU), claims the retail giant had ignored repeated efforts by its staff to talk to the company about setting up trade unions.

"We have contacted Wal-mart several times since its branch store opened in Beijing in July, but no progress has been made in establishing trade unions," said Feng Lijun, local ACFTU official.

According to ACFTU officials, they were told by Wal-mart, whichhas not set up trade unions in any of its branches in China, that Wal-mart had established effective channels to resolve labor disputes and there were no trade unions in its United States stores either.

As opposed to most western countries, Chinese workers, including employees of foreign-funded enterprises, usually join trade unions affiliated to their companies. Only a small number of staff of foreign-funded enterprises can join trade unions affiliated to the Foreign Enterprises Service Corporation (FESCO),said Wang Ying, ACFTU official.

According to ACFTU statistics, most foreign-funded supermarkets in Beijing have not established trade unions, which means hundreds of their employees can not become members of the ACFTU.

Feng said it was very hard for individual workers to protect their legal rights without support, especially in foreign companies.

"The best way to protect workers rights is to sign group contracts with employers through trade unions, which can protect workers' rights involving wage negotiation, vacations, and discharge regulations."

According to Chinese laws, all workers have the right to join a trade union, but companies are only required to allow the establishment of a union if more then three workers request it.

Some foreign-funded companies explained that they did not receive workers' requests to have trade unions to join, so they did not think it necessary to establish trade unions.

Although many employees of foreign-funded enterprises wish to join a trade union, they did not want to express their hopes in public, mainly because of concerns over the safety of their jobs, said ACFTU officials.

In Beijing, only 2000 of Beijing's 5000 foreign enterprises have established trade unions. Most foreign enterprises with trade unions are joint ventures, whose trade unions were transferred from the former Chinese factories.

China has revised labor laws to protect workers' rights and punish companies that prevent workers from joining their trade union. "However, we are still facing difficulties in establishing branches of ACFTU in foreign-funded companies like Wal-mart due to their reluctance to be cooperative," said Wang Ying.

The ACFTU was established in 1925 and boasts over 131 million members across the country. (Xinhua )


Wal-Mart opens wallet in effort to fix its image

Constance L. Hays, New York Times
Thursday, August 14, 2003

Wal-Mart, concerned about its public image, is using a consultant to analyze that image and has commissioned radio and television ads to try to reverse criticism from local officials, consumers and others.

It is the first time that Wal-Mart, known for parsimony in its business practices, has invested in reputation research -- using polling techniques, focus groups and phone interviews -- and then spent more money to try to repair the distressing aspects of what it found.

The project began about two years ago at the suggestion of Wal-Mart board members, a company spokesman said, and is continuing. Regular updates are being given to the board, with one scheduled next month. The company's relationships with consumers, employees, bankers and community leaders have all been examined by the consultant, Fleishman-Hillard, a part of the Omnicom Group. Last but not least will be its ties to suppliers, who make and deliver billions of dollars' worth of goods to Wal-Mart stores.

Such an effort indicates concern at Wal-Mart's highest levels about fallout from the company's rapid growth and enormous economic influence. With that ascent has come scrutiny of Wal-Mart's penchant for hiring part-time workers as well as its treatment of female employees, the subject of a pending federal lawsuit, and its resistance to organized labor.

Community opposition to building Wal-Mart stores has been vociferous in some places, and muttering is heard from time to time among manufacturers, who say they are being constantly pressed to sell their goods to Wal-Mart at low prices.

The project found that many people view Wal-Mart as a place of dead-end jobs and that its performance as a corporate citizen leaves much to be desired.

"They didn't see us as involved in the community as they might like," Wal- Mart's chief spokesman, Jay Allen, said. "They didn't give us good marks on listening. Sometimes it was as basic as the parking lot was not clean, and that's not treating the community with respect."

To reverse the impression about its jobs, Wal-Mart is broadcasting three ads nationwide that portray it as a great place to work. Two of the ads feature women who work at Wal-Mart discussing their job satisfaction. "They give you opportunity to advance," says one, a black department manager who persuaded her daughter to give Wal-Mart a try.

Another, a white mother of two who is a district manager in charge of several stores, says, "It's not easy to have a career and a family, but my job makes it a lot easier to do both." As the camera pans over her tranquil home, she says she hopes to "set a good example for my boys, that they can go out and achieve absolutely anything."

The ads, produced by GSD&M of Austin, Texas, also part of Omnicom, are appearing at a time when Wal-Mart is on the defensive over its treatment of female employees. A group of them filed a discrimination lawsuit against the company 18 months ago in federal court in Washington, and a hearing to determine whether the suit should become a class action, covering all of the women working at Wal-Mart, has been scheduled for next month.

So far, the television ads have focused on correcting what Wal-Mart maintains is a false impression about its employment record. But a lawyer for the plaintiffs said he thought the ads were a direct result of the lawsuit.

"The telling thing is that the ads are even here," the lawyer, Joseph Sellers, said. "My sense is that Wal-Mart has never run ads like this before and that the timing is more than coincidental." The lawsuit includes accounts from many women, he said, who claim that they were told that "they were unsuited to management," and from others "who said they were told that, 'The hours are too long. You should be home with your children.' "

Allen insisted that the research, rather than the lawsuit, prompted the ads featuring the women. But he added: "We would acknowledge that we need to get better as an employer. The lawsuit has certainly heightened our awareness of that."

Among bankers, Allen said, Wal-Mart's image included problems that some consumers and local officials had cited, including low-paying jobs. "But it didn't really have an impact on the way they looked at Wal-Mart as an investment," he said. "Their questions were: Can Wal-Mart continue to grow in the United States, and are we well positioned to capitalize on the international opportunities that we have?"

Wal-Mart workers generally gave the company high marks, Allen said. But pay and benefit levels did not get much applause. "People always want to make more money," he said. "Really, what you see for the most part is people want to be treated well. They want to be treated fairly. They want to develop on the job."

The lawsuit contends that women were often overlooked or ignored when it came time to promote cashiers and others to management positions. In January, Sellers said, the company began its first formal system for inviting people to apply for vacancies in an important management-training program. His attempts to find out more about the program were batted away by company lawyers, who said it was "attorney work product" and therefore not to be offered as part of discovery.

"It was clear that they were inaugurating this with the help of lawyers," Sellers said. "The fact that they had such a program is a good first step, but it is hardly more than that. They have shielded it from scrutiny by us."

More television ads are planned around other findings from the Fleishman- Hillard research, Allen said. Among the positives were that many people think Wal-Mart has a good reputation and that "we were easily the first retailer you think of with low prices," he said. "Even people who don't like us or respect us would not argue that we have the lowest prices."

The negatives, though, also caught everyone's attention at the company's highest levels and are now pushing it to make changes.

Getting to Wal-Mart facts not easy task

Published in the Herald News 07/20/03
Ted Slowik 

It's hard to know who to believe in the war of words between Wal-Mart
and unions, who are making Joliet the latest battleground over efforts
to organize workers. Both sides spew so much propaganda, it's difficult
to tell who's telling the truth.

  United Food and Commercial Workers, the union that represents people
who work in supermarkets, wants you to think that Wal-Mart is a greedy
corporation that exploits workers by paying low wages and offering
meager benefits.

  "Behind the yellow smiley-face of the all-American Wal-Mart myth is a
company ... where workplace policies may mean workers need two jobs and
depend upon public support to get by," according to the UFCW's Web

  The company denies that it is anti-union. Its official stance on
unions is stated on its corporate Web site.

  "At Wal-Mart, we respect the individual rights of our associates and
encourage them to express their ideas, comments and concerns. Because we
believe in maintaining an environment of open communications, we do not
believe there is a need for third-party representation," Wal-Mart says.

  Still, there are volumes of evidence about the company's steps to
promote their employees' independence whenever a union attempts an
organizing campaign. Tactics range from anti-union messages posted in
employee break rooms to firing workers who are active in organizing
efforts to shutting down departments or closing stores if an
unionization effort ever is successful, according to several complaints
UFCW has filed with the National Labor Relations Board.

  Wal-Mart counters that unions keep butting in where they are
unwanted. After unsuccessful organizing campaigns in Dubuque, Iowa, and
Las Vegas last year, Wal-Mart quoted a Sam's Club employee in a
company-issued press release.

  "They (the unions) are like vultures. They just keep circling and
circling even though we had 140 associates send them letters asking them
to bow out and leave us alone," the employee was quoted as saying.

  Both sides fight hard, which is why things could get very interesting
in Joliet by early 2005, when the new Wal-Mart is scheduled to open at
Illinois 59 and Theodore Street. While researching the topic, I found
news coverage of the Wal-Mart vs. union battle being waged in

  The board of supervisors in Contra Costa County last month voted to
ban superstores, which are the combined discount/grocery stores that
Wal-Mart typically builds nowadays. In making its decision, the board
cited a study done by the San Diego County Taxpayers Association, a
nonprofit, nonpartisan organization.

  The study showed that poorly compensated workers at big-box stores
would cost taxpayers millions of dollars through the loss of jobs at
other stores and the need for government agencies to provide benefits to
the workers who have none.

  "Even increased sales and property tax revenues would not cover the
extra costs of necessary public services," the San Franciso Chronicle

  Wal-Mart maintains that many of its employees don't need insurance
from the company because they are students, senior citizens or others
who receive coverage elsewhere.

  In Contra Costa County, Wal-Mart collected more than 40,000
signatures and submitting them last week. If 65 percent of the
signatures are deemed valid, then a referendum will be held and voters
will decide whether the anti-superstore ordinance will stand.

  Even if you like shopping at Wal-Mart and don't particularly care for
unions, it's hard to deny that the company's employee policies create
significant social costs for taxpayers. Unions and community-action
groups will no doubt be driving this point home over the coming months
as Wal-Mart prepares to build a second store in Joliet.

Reporter Ted Slowik can be reached at (815) 729-6053 or via e-mail at


Wal-Mart, Worry About Substance, Not Image
Jon Talton
Republic columnist
Aug. 17, 2003 12:00 AM

Dear Wal-Mart: So you're finally concerned about your image. For two years, you've paid a public relations firm to research your reputation with consumers, employees, bankers and community leaders. And, according to the New York Times, "The project found that many people view Wal-Mart as a place of dead-end jobs, and that its performance as a corporate citizen leaves much to be desired."

Now you're commissioning TV and radio ads to try to repair your image. It won't be the first time that executives confused image and substance. Since you've asked, let me tell you why I won't shop at Wal-Mart.

It comes down to those "heartland values" you talk about.

A lack of them.

Fair play is a heartland value. But Wal-Mart is known for clear-cutting the retail landscape. Competing national stores won't even consider locating within three miles of a Wal-Mart Supercenter, and local retailers go out of business. Suppliers are bullied for "everyday low prices," with the result being that many have been forced from business.

Speaking of fair, you're the nation's largest employer, with a million "associates." But relatively few work 40-hour weeks, and a union cashier at Safeway or Albertson's can make twice as much as one of your checkers. Nor is it easy for someone making seven bucks an hour to afford your "pay-for-it-yourself" benefits.

You're facing employee lawsuits. One is from a group of female workers who filed a discrimination suit in federal court in San Francisco. A hearing next month will determine whether it should become a class action covering all women working for Wal-Mart.

Community is a heartland value I always admired. But actual communities, as opposed to the marketing propaganda use of the term, often lose some of their most important assets because of Wal-Mart. Main streets and city squares around America have been turned into ghost towns by Wal-Mart.

The damage has been more than aesthetic: Local companies are more likely to invest in their towns and mentor future leaders with a strong community spirit. Teenage Harry Truman worked in the corner drugstore, not the Wal-Mart Superstore.

Even the suburbs are getting testy. Chandler and south Scottsdale neighborhoods are only the latest to worry about the effect of a 200,000-square-foot store, broiling surface parking lot, traffic tie-ups and destruction of nearby retailers.

Communities are in fiscal crises in part because of rising bills for public health services. Much of this comes from part-time workers who have no choice but to turn to a program such as AHCCCS.

Wal-Mart, I turned away from you with some sadness. I spent a few years near Sam Walton country, and I can understand his dream of giving small towns a retail choice they never enjoyed. But that was then. Walton's dream has grown into a killer of choice.

Why? Your business model never bumped up against the public policies that would keep the free market healthy. Regulations that say you can't control the supply chain and dictate the prices that will kill off your competitors. Laws that give unions a fair chance to organize workers. Zoning that protects the civic health of communities.

If it had, you'd still be profitable. And you wouldn't be so worried about your image.

Reach Talton at jon.talton@arizonarepublic.com or (602) 444-8464.


Anecdotes Abound in Wal-Mart Discrimination Case
By Mark Friedman
Arkansas Business - 8/18/03

For years, Christine Kwapnoski dreamed of becoming manager of one of Wal-Mart's Sam's Club stores. Kwapnoski, who began working for Wal-Mart Stores Inc. of Bentonville in 1986 when she was 22, said she didn't know how to apply for a promotion from her position as cashier and never saw any openings posted around the store. But the Concord, Calif., woman said she constantly hounded her supervisors for the chance.

She watched as mostly male co-workers were plucked from the hourly positions into management slots. Kwapnoski's attorneys say her experience was all too typical at Wal-Mart. The company prefers to promote men over women, her attorneys charge Kwapnoski is one of seven women who have filed suit against Wal-Mart, alleging the Bentonville retailer also discriminates against women by not paying them the same as men. "What we saw operating at Wal-Mart was reminiscent of the way large businesses did things 30 or 40 years ago rather than in the new millennium," said Joseph Sellers of Cohen Milstein Hausfeld & Toll of Washington, D.C., one of six law firms working on the women's case.

The women want their case to receive class-action certification so the approximately 1.5 million women who worked for Wal-Mart at any time since Dec. 26, 1998, could be part of the suit. Wal-Mart has opposed the move, saying the class would be too large to manage. A federal court judge in San Francisco is expected to hear an argument on the issue on Sept. 24. If the judge approves the plaintiffs' request, the case would become the largest employment discrimination lawsuit ever in the country.

Wal-Mart vigorously denies the allegations of sexual discrimination.
"Wal-Mart is a great place for women to work, and isolated complaints do not change this fact," said Mona Williams, Wal-Mart's vice president for communications. "Wal-Mart does not tolerate discrimination against women or anyone else."

In 1997, Home Depot, without admitting wrongdoing, settled a sex discrimination suit covering 25,000 female employees for $104 million. If it loses, Wal-Mart could face monetary penalties that could potentially be in the billions of dollars. The plaintiffs' attorneys haven't mentioned a figure for punitive damages in the lawsuit, and they also are seeking an unspecified amount of money for back pay.

Meanwhile, the complaint is attracting unwanted attention for the world's largest company.
On July 25, the California chapter of the National Organization for Women protested outside of a Wal-Mart in San Leandro, Calif. And NOW launched an "adopt-a-store" campaign, which is sending its activists into Wal-Mart stores to report to customers about the allegations in the lawsuit. As a result of the lawsuit, filed in 2001 in U.S. District Court in San Francisco, Wal-Mart has "picked up the pace" and now posts all open management positions in its stores, Williams said.

After years of waiting, Kwapnoski finally entered the management training program in March. "That's not surprising because companies often engage in what I call lawsuit conversions," Sellers said. "They try to do something for the people who brought the case in the hope that it will make them look less bad when they get to trial. It doesn't mean these women didn't deserve it, but they deserved it a long time ago." Culture Attorney Sellers blames Wal-Mart's culture for perpetuating stereotypes about women and their aptitudes. Women were always welcome to work as cashiers, he said, "but there was a profound mistrust of the fitness of women to serve in management."  

One former vice president of marketing for the Sam's Club division, Rhonda Harper, who was hired from outside the company, described the Wal-Mart culture as a "very tight, deep culture" and "very closed," according to court papers filed in the case on behalf of the women. "I didn't go hunting with them. I didn't go fishing with them," Harper said in a deposition taken for the case. "I wondered if I had been able to do some of the outings if I might have assimilated more quickly into the organization." At the regular Monday executive-level Sam's Club meetings, senior management often referred to the women associates in the stores as "little Janie Qs" and "girls," Harper said. When Harper objected to the terms, "her criticism was not well received and there was no change in the regular use of the demeaning label," plaintiffs' attorneys Jocelyn Larkin and Christine Webber said in court filings. Other women also complained about some of the behavior of Wal-Mart management. 

Melissa Howard, 35, of Indianapolis, said she became a store manager in Decatur, Ind., in June 1998, but was the only female store manager in the district. Occasionally, she said, the district manager held lunch meetings at Hooter's restaurants, where female servers wear revealing uniforms. "During the meeting, I was forced to listen to lots of discussion among the male managers about the waitresses' breasts and butts and which sexual experience they would like to have with them," Howard said. "While it was humiliating to be there, I was reluctant to complain. I knew from attending the annual company meetings that the male managers often went out together to strip clubs after the meeting. It seemed to me to be an accepted part of the culture."

One top-level executive defended the practice of scheduling the lunch meetings at Hooters. Coleman Peterson, executive vice president for people, the company's term for human resources, at Wal-Mart, said it was appropriate for a Wal-Mart district meeting to be held there, if it is considered to be the "restaurant du jour" and "one of the best places to meet and eat" in town, according to court papers the women filed. Williams, the Wal-Mart spokeswoman, said only one woman in the 110 statements filed by women in the case complained about having business meetings at Hooters. "Wal-Mart would not find business meetings at Hooters acceptable," she said. "That's not who we are. That's not how we think." Pay Wal-Mart's corporate headquarters in Bentonville controls everything from the music in the stores to the temperature, but it doesn't monitor what it pays its employees, Sellers said.

The plaintiffs hired Richard Drogin of Drogin Kakigi & Associates of Berkeley, Calif., to study payroll information for each employee between 1996-2001. Drogin found that, for nearly every job, women earned less than men holding the same jobs in every year since 1996. Among hourly workers, women earned about $1,000 less than did men in 2001, his report said. And in management positions, women earned an average of $14,500 less. The differences in pay between men and women could not be explained by seniority or turnover, he said. Women have longer average tenure (4.47 years) than do men (3.13 years) and lower turnover. As for performance, women in hourly positions had sli ghtly higher average performance ratings than did men, Drogin's report said. Wal-Mart disagrees with the conclusions of his report. "Our expert had the same information available and came up with different results," Williams said.

Wal-Mart's expert found in hourly pay, there is no pattern adverse to women and many stores favor women, according to Wal-Mart's attorneys' statements filed in court papers.
"Plaintiffs' positions — that all 3,244 store mangers can be deemed discriminators, and 1.5 million women victims — is incorrect," Wal-Mart said. "At worst, bias exists (if at all) at only a few stores … If Plaintiffs prevailed, women who were not discrimination victims would be unjustly compensated."  Still, the plaintiffs' attorneys blame the discrepancy on the managers, who set pay for each hourly employee.

Company guidelines authorize store managers to adjust starting pay by as much as $2 per hour."But Wal-Mart provides no guidance on what circumstances would justify such an adjustment," Larkin and Webber said in the motion to have the case certified as a class action. "Without proper criteria, inappropriate gender-based factors therefore can, and do, affect any decisions."Sellers said he was shocked to learn that Wal-Mart never studied employee pay before the lawsuit was filed. "They study everything," he said. "They apparently have this striking lack of curiosity about something as basic as whether there is a pay difference [based on] gender or race."

Promotions One way out of the low-pay positions at Wal-Mart is through promotions to management. But Wal-Mart had a very subjective process on who was selected, and it was systematically disadvantageous to women, Larkin and Webber said. Store managers are allowed to apply their own criteria when selecting candidates. "Such unwritten, subjective criteria are particularly vulnerable to the influence of stereotypes," Larkin and Webber said.

Until January 2003, Wal-Mart did not post openings for the management training program, nor did it have any system available for employees to express an interest in the program, Larkin and Webber said. The plaintiffs say this resulted in women being disproportionately employed in lower-paying jobs. They hold about 65 percent of the hourly jobs but only 33 percent of the management positions — "a pattern that is consistent in all 41 regions across the country," Drogin said. "Many senior managers testified that they had no reason to believe that women are less interested in management than are men," Larkin and Webber said. "Indeed, they were at a loss to explain why so few women held management positions." Earlier this year, Wal-Mart implemented a one-time-only opportunity for employees to express an interest in the management training program. Employees were given only one week to apply, Larkin and Webber said. When the plaintiffs' attorneys sought discovery of the documents explaining the development of the new "program," Wal-Mart claimed attorney-client privilege.

Disagreeing with the plaintiffs' study, Williams said Wal-Mart promotes women at the same rate they apply for jobs. For example, if 50 assistant manager positions are open and half of the applicants are women, then women should get half of those jobs, she said.
"And we've actually done better than that," Williams said.Winning If the plaintiffs are going to prevail, they are going to have to show that Wal-Mart engaged in a pattern and practice of discrimination with respect to compensations and promotions.

Some of the key issues will be Wal-Mart's work force data, comparing pay men and women receive who were performing the same jobs during the same time period in the same places, Sellers said. The case will also hinge on examining men and women who were eligible for promotion and who got promoted and who didn't. Sellers said he and the team of lawyers also are going to have to prove managers had discriminatory attitudes that kept women out of management. "We have a lot of evidence suggesting that senior-level managers and mid-level managers viewed women in a demeaning manor," he said. A trial is probably more than a year away.

Meanwhile, the attorneys' fees are rising. Sellers wouldn't say what the fees are other than to characterize them as "substantial." "This is clearly an expensive case on both sides," he said. "We've confronted a very vigorous defense, and it's forced us to spend a lot of time and resources to put our case together." Even if Wal-Mart wins the case, it could suffer a blow to its image. Several newspapers and magazines across the country have written about the lawsuit, with several mentioning the Hooters meetings. And NOW, armed with the reports supplied by the plaintiffs' attorneys, vows to spread the word inside Wal-Marts. While NOW isn't calling for a boycott, consumers will be urged to shop elsewhere, said Rachel Allen, the California NOW spokeswoman. NOW already had given Wal-Mart its "Merchant of Shame" award for not paying its workers enough, NOW said. Williams said she was surprised NOW turned its back on Wal-Mart. "This company has done more to raise the standard of living for women and families than any other single entity in this country," Williams said.

Average Earnings by Gender for 2001

   Job                                      Men              Women          Difference
Regional Vice President             $419,435              $279,772              $139,663
District Manager                             $239,519              $177,149              $62,370
Store Manager                                $105,682              $89,280                 $16,402
Co-Manager                                     $59,535                $56,317                 $3,218
Assistant Manager                         $39,790                $37,322                 $2,468
Management Trainee                    $23,518                $22,371                 $804
Department Head                           $23,518                $21,709                 $1,809
Sales Associate                              $16,526                $15,067                 $1,458
Cashier                                                $14,525                $13,831                 $694


Average Tenure
Average years since date of hire full-time active employees at year-end 2001

Category                     Men                    Women

Total                                3.13 Yrs.             4.47 Yrs.
All Hourly ­                      2.76                     4.39
All Salary                         6.69                     7.39
Sales Associates              2.53                      3.41
Department Manager       5.29                      7.49
Cashier                            1.86                      2.53

Source: Drogin Kakigi and Associates of Berkeley, Calif., filed by plaintiffs' attorneys in U.S. District Court in San Francisco.
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WAL-MART Muzzling Critics
St. Louis Post-Dispatch editorial

WAL-MART'S EMPLOYMENT practices are a legitimate matter for public debate, as much as Wal-Mart may wish otherwise. That's why it's wrong in its attempt to bully St. Louis radio stations into dropping ads sponsored by a union critical of the retail colossus.

Wal-Mart, which likes to wrap itself in the flag, should have more appreciation for a certain bedrock American value: free speech.
Wal-Mart is the biggest retailer in America. It employs nearly a million people. When the great ship Wal-Mart sails into town, smaller competitors are often swamped in its wake. Some sink forever.
Wal-Mart is also firmly anti-union. It has fought off organizing efforts from coast to coast, prompting allegations that it intimidates and fires pro-union employees. In lawsuits filed in dozens of states, Wal-Mart is also accused of denying workers overtime pay. Last December, an Oregon jury found
Wal-Mart liable.
All that makes Wal-Mart's behavior a matter of broad public concern.
Frustrated in their organizing efforts, unions are trying to give Wal-Mart a black eye through bad PR. The United Food and Commercial Workers Union in
St. Louis bought radio ads saying, among other things, that only a third of Wal-Mart workers have health insurance.  That's not true, Wal-Mart says. It claims that half its workers are insured through the company, and many others get health coverage elsewhere. A company lawyer wrote the stations a letter demanding that the ads be stopped. The unstated implication, of course, is that a costly lawsuit will follow unless the stations kowtow.
Let's draw a distinction here. The union isn't selling used cars or a pill to make you look like Arnold Schwarzenegger.
Rather, the union is advocating a position on a matter of public concern.  Free and open debate is in the public interest, and the debate needs some
breathing room. Free speech should be protected, even if there are conflicting versions of the truth being aired.
The legal situation is a bit murky. Sandy Davidson, who teaches communications law at the University of Missouri, says that the station is taking a risk if it continues to run the ad after being told it is
inaccurate. It could be sued for repeating a libel. Obviously, a radio station doesn't have an easy way to determine how many Wal-Mart workers really have health insurance.
Other lawyers think the station is on safer legal ground. But is a station manager, who knows the name of the game is pleasing advertisers, going to
take the chance? Can a company that wants to knock its opponent off the radio merely have its lawyer write an ominous letter?
That's not right. Radio stations already enjoy broad protection for ads sponsored by federal political candidates. We should expand that protection
to ads on all public issues. If statements are libelous, the victims should sue the people that sponsored the ad.
It shouldn't be easy to shut people up.


Wal-Mart Workers Awaiting Union Ruling

Patti Edgar
15 August 2003
Winnipeg Free Press

Residents of a northern Manitoba community will have to
wait longer to find out if Thompson will be on the map for having the
only unionized Wal-Mart in North America.

The Manitoba Labour Board wrapped up two days of hearings Wednesday
that could determine the fate of a union drive at Thompson's Wal-Mart.

The three-person panel heard arguments in City Hall from both the
company and Canada's United Food and Commercial Workers Union on two

The company and the union disagree on exactly who should be in the
bargaining unit -- about 10 of the 150 employees who cast votes in July
are up for dispute.

Wal-Mart is also disputing the conduct of the voting process, arguing a
Canadian Broadcasting Corporation cameraman filming in a store parking
lot may have influenced voters.

The panel returned to Winnipeg yesterday to deliberate but haven't set
a deadline to come up with a decision.

The votes were cast by Wal-Mart's staff at the end of July after a
door-to-door union drive by the UFCW's Local 832. The union represents
16,000 people in Manitoba, including Safeway and Westfair staff.

Wal-Mart is not commenting on the union drive, but UFCW continues to
predict the union's success.

"We are confident of the outcome. It would have been nice if the board
decided, 'Let's open the box and get this show on the road'," said
spokesman Michael Forman.

If the drive is successful, it would create momentum across Canada and
in the U.S. to unionize more stores and improve working conditions for
the giant retailer's 1.4 million employees, he said.

Graham Starmer, president of Manitoba Chambers of Commerce, believes a
successful union drive at the Wal-Mart would only draw attention to a
working environment in Manitoba that he says unfairly favours unions.

The province should be trying to attract businesses and investment to
Manitoba, not drive them away, he said.

Wal-Mart, Aware Its Image Suffers, Studies Repairs
August 14, 2003
Wal-Mart, concerned about its public image, is using a consultant to
analyze that image and has commissioned radio and television ads to try
to reverse criticism from local officials, consumers and others.

It is the first time that Wal-Mart, known for parsimony in its business
practices, has invested in "reputation research" — using polling
techniques, focus groups and phone interviews — and then spent more
money to try to repair the distressing aspects of what it found.

The project began about two years ago at the suggestion of Wal-Mart
board members, a company spokesman said, and is continuing. Regular
updates are being given to the board, with one scheduled next month. The
company's relationships with consumers, employees, bankers and community
leaders have all been examined by the consultant, Fleishman-Hillard, a
part of the Omnicom Group. Last but not least will be its ties to
suppliers, who make and deliver billions of dollars' worth of goods to
Wal-Mart stores.

Such an effort indicates concern at Wal-Mart's highest levels about
fallout from the company's rapid growth and enormous economic influence.
With that ascent has come scrutiny of Wal-Mart's penchant for hiring
part-time workers as well as its treatment of female employees, the
subject of a pending federal lawsuit, and its resistance to organized

Community opposition to building Wal-Mart stores has been vociferous in
some places, and muttering is heard from time to time among
manufacturers, which say they are being constantly pressed to sell their
goods to Wal-Mart at low prices.

The project found that many people view Wal-Mart as a place of dead-end
jobs, and that its performance as a corporate citizen leaves much to be
desired. "They didn't see us as involved in the community as they might
like," Wal-Mart's chief spokesman, Jay Allen, said. "They didn't give us
good marks on listening. Sometimes it was as basic as the parking lot
was not clean, and that's not treating the community with respect."

To reverse the impression about its jobs, Wal-Mart is broadcasting
three ads nationwide that portray it as a great place to work. Two of
the ads feature women who work at Wal-Mart discussing their job
satisfaction. "They give you opportunity to advance," says one, a black
department manager who persuaded her daughter to give Wal-Mart a try.

Another, a white mother of two who is a district manager in charge of
several stores, says, "It's not easy to have a career and a family, but
my job makes it a lot easier to do both." As the camera panned over her
tranquil home, she said she hoped to "set a good example for my boys,
that they can go out and achieve absolutely anything."

The ads, produced by GSD&M of Austin, Tex., also part of Omnicom, are
appearing at a time when Wal-Mart is on the defensive over its treatment
of female employees. A group of them filed a discrimination lawsuit
against the company 18 months ago in federal court in Washington, and a
hearing to determine whether the suit should become a class action,
covering all of the women working at Wal-Mart, has been scheduled for
next month.

So far, the television ads have focused on correcting what Wal-Mart
maintains is a false impression about its jobs. But a lawyer for the
plaintiffs said he thought the ads were a direct result of the lawsuit.

"The telling thing is that the ads are even here," the lawyer, Joseph
Sellers, said. "My sense is that Wal-Mart has never run ads like this
before, and that the timing is more than coincidental." The lawsuit
includes accounts from many women, he said, about being told that "they
were unsuited to management," and from others "who said they were told
that the hours are too long, you should be home with your children."

Mr. Allen, the Wal-Mart spokesman, insisted that the research, rather
than the lawsuit, prompted the ads featuring the women. But he added:
"We would acknowledge that we need to get better as an employer. The
lawsuit has certainly heightened our awareness of that."

Among bankers, Mr. Allen said, Wal-Mart's image included problems that
some consumers and local officials had cited, including low-paying jobs.
"But it didn't really have an impact on the way they looked at Wal-Mart
as an investment," he said. "Their questions were: Can Wal-Mart continue
to grow in the United States, and are we well positioned to capitalize
on the international opportunities that we have?"

Wal-Mart workers generally gave the company high marks, Mr. Allen said.
But pay and benefits did not get much applause. "People always want to
make more money," he said. "Really, what you see for the most part is
people want to be treated well. They want to be treated fairly. They
want to develop on the job."

The lawsuit contends that women were often overlooked or ignored when
it came time to promote cashiers and others to management positions. In
January, Mr. Sellers said, the company began its first formal system for
inviting people to apply for vacancies in an important
management-training program. His attempts to find out more about the
program were batted away by company lawyers, who said it was "attorney
work product" and therefore not to be offered as part of discovery.

"It was clear that they were inaugurating this with the help of
lawyers," Mr. Sellers said.

A Wal-Mart spokeswoman, Sarah Clark, called the January change "an
enhancement" to a program already in place.

More television ads are planned around other findings from the
Fleishman-Hillard research, Mr. Allen said. Among the positives were
that many people think Wal-Mart has a good reputation and that "we were
easily the first retailer you think of with low prices," he said. "Even
people who don't like us or respect us would not argue that we have the
lowest prices."

The negatives, though, also caught everyone's attention at the
company's highest levels and are now pushing it to make changes.

"We need to do these things," Mr. Allen said. "At the same time, we
can't change who we are. We can't change what makes Wal-Mart Wal-Mart."

Wal-Mart Discrimination Case Has Revolving Door

By Susan Beck
5 August 2003
The Recorder
It could be the largest employment discrimination case ever.

Dukes v. Wal-Mart Stores, 01-2252, alleges that the nation's leading
private employer denies equal pay and promotions to women. With more
than 700,000 possible plaintiffs, and damages that could run into the
billions, it's a plum of a case.

But behind the scenes, Wal-Mart's defense team may have hit some bumps
in the road. Even before a class certification hearing was held, two
major law firms had exited the case.

When the complaint was filed in U.S. District Court for the Northern
District of California in San Francisco in June 2001, Wal-Mart was
represented by veteran employment lawyer Gilmore Diekmann Jr., of
Seyfarth Shaw's San Francisco office.

Soon after, Wal-Mart brought in Jones Day, which it selected as lead
counsel after interviewing several firms. The team was led by the
coordinator of Jones Day's litigation group, Cleveland partner John
Strauch. In April 2002, Seyfarth formally withdrew.

Then, in December, Paul, Hastings, Janofsky & Walker partner Nancy
Abell entered the fray and took the lead. Four months later Jones Day
filed a motion to withdraw, which the court granted.

A Wal-Mart spokeswoman says the company does not discuss its selection
of counsel. Likewise, none of the defense attorneys would comment on the

Lead plaintiffs lawyer Brad Seligman claims these changes have helped
his clients. Seligman, who heads a Berkeley foundation called The Impact
Fund, notes that Paul, Hastings had the unenviable task of parachuting
into a discovery process that was almost over. "They had enormous
catch-up they had to do," he said.

The firm had less than a month to prepare for the depositions of some
senior executives.

"We were quite pleased with how the last set of depositions went,"
Seligman says.

"We don't see it that way," responds Wal-Mart spokeswoman Mona

Of course, none of this will make any difference if Wal-Mart can defeat
class certification. A hearing on this issue, originally set for July
25, has been pushed back to Sept. 24.

Susan Beck is a senior writer for The American Lawyer magazine and is
based in San Francisco. Her e-mail address is sbeck@amlaw.com.



4 August 2003
The Oregonian

Summary: An appeal says planners misread traffic effects, land- use
needs and more in rejecting a zoning request

Round 2 of Wal-Mart vs. Oregon City begins on Sept. 3.

That's when the City Commission expects to hear Wal-Mart's appeal of a
Planning Commission decision that denied land-use changes requested by
the company.

The Planning Commission in June said Wal-Mart had failed to show the
city needs more commercial land and more retail services, and didn't
adequately address potential traffic problems.

Wal-Mart wants to build on 14 acres on Molalla Avenue directly across
from Hilltop Mall. Twelve acres are in a commercial zone, but Wal-Mart
said it must have 2 acres that now are zoned for housing.

In an appeal filed Friday, Wal-Mart says the June decision was flawed
because the Planning Commission:

* Came to the wrong conclusions about the effect of traffic and the
amount of land the city needs for housing, and also overlooked the lack
of large vacant retail sites in Oregon City.

* Disregarded the potential benefits such as new jobs, increased tax
revenue, road improvements and consumer demand for the low- priced
products the store will sell.

* Failed to consider conditional zoning, which would link the
residential zone change to Wal-Mart's project. The residential zoning
would change only if Wal-Mart built the store.

Portland lawyer Greg Hathaway, who represents the company in Oregon,
declined to comment on the appeal.

Wal-Mart also said its store would replace Dale's Auto Wrecking - - an
eyesore the city would like to eliminate.

The Younger family of Oregon City, which owns the wrecking yard and
some of the residential land, also filed an appeal. The Younger appeal
includes some of the issues Wal-Mart raised.

Bob Stacey, executive director of 1000 Friends of Oregon, a land- use
group, said Wal-Mart faces an uphill fight.

"Land-use law in Oregon puts a high priority on making sure there is an
adequate supply of buildable land for housing needs inside urban growth
boundaries," Stacey said.

Wal-Mart also is appealing a denial by the Hillsboro Planning
Commission and faced opposition in Hood River, Lebanon, Salem, La Grande
and Central Point.

"In case after case, small Oregon cities are deciding the adverse
effects of super-sizing it outweigh the advantage of getting the store,"
Stacey said.


Manufacturers Accuse Retailers of Damaging           Economy by Selling Chinese Goods

By Rob Varnon, Connecticut Post, Bridgeport
Knight Ridder/Tribune Business News
3 August 2003
Aug. 3--A group of Connecticut manufacturers Friday charged America's
largest retailers with compounding the manufacturing crisis by selling
large amounts of Chinese-made products.

Wal-Mart spokesman Bill Wertz said the company buys its products from
American manufacturers whenever it can, but its first concern is for the

"We want to make [our customers'] hard-earned money go as far as it
can," Wertz said.

Wal-Mart was among a handful of large retailers mentioned by
manufacturers who were venting their anger during a rally Friday in New

Bruce Thompson, vice president of Projects Inc. of Glastonbury, said
the Chinese are "attempting to crush us economically" by flooding the
American market with cheap goods and destroying the manufacturing sector
in the United States. He said Wal-Mart, Target and other big box stores
aren't helping by selling Chinese goods. Thompson and other
manufacturers started MAD in the USA, a group that is proposing a slew
of governmental policies that includes a Buy American campaign.

The group was formed to come up with policies to reverse national
trends in the sector. Manufacturing has lost more than 2 million jobs in
the last two years and has seen 34 consecutive months of job declines,
according to both government and private sector reports. One of the
group's proposals is to label all products that sell for more than $15
with information on where the product and its components are made.
According to the group, some products may be mislabeled "Made in
America" because the products are assembled in the United States, when
the majority of the components are made in other countries.

But Wertz said one of the problems Wal-Mart faces is that there aren't
American companies that can provide the products it wants. He said
globalization has taken a big toll on U.S. manufacturing, and Wal-Mart
is concerned about it.

"We do have an interest in U.S. manufacturing doing well," Wertz said.
He said unemployment and a sluggish economy hurt Wal-Mart's business,
too, but that dealing with manufacturing's problems will be a
complicated task.

Wal-Mart recently set up an export office, according to Wertz, to help
U.S. manufacturers sell their products overseas. He said a number of
American-made products are popular overseas, and Wal-Mart wants to help
manufacturers get into foreign markets. While manufacturers focus on
foreign trade agreements and other policies, Wertz said Wal-Mart's main
concern is selling affordable products. He said people need to remember
that any solutions to the manufacturing crisis that raises prices in
stores may not be a good thing for the economy.

As to the idea of labeling products, Wertz said it might hurt some of
the manufacturers Wal-Mart buys products from, but Wal-Mart is a
retailer and doesn't make any products.

Thompson and other manufacturers, however, claim that if the American
consumer knows where his or her goods are coming from they will pay
higher prices for American products.

To see more of the Connecticut Post, or to subscribe to the newspaper,
go to http://www.connpost.com/


Family sues Wal-Mart for medical bills
The Associated Press
KANSAS CITY, Kan. -- A former Wal-Mart employee is suing the company,
the Children's Miracle Network and Children's Mercy Hospital, claiming
they withheld money raised to cover medical expenses for treatment of
his son's congenital heart defect.
Frank and Amy Arena, parents of Joey Arena, filed a lawsuit Friday in
U.S. District Court in Kansas City, Kan., seeking damages exceeding

Wal-Mart said Monday that all but $2,700 of Joey Arena's surgery had
been paid for by insurance and an employee-funded trust fund. Wendy
Sept, a Wal-Mart spokeswoman, said the family knew that a June 29, 2002,
fundraiser wouldn't raise money directly for their family.

"We're really sorry if there was any misunderstanding, and we think
everyone was trying to do the right thing for the Arenas," Sept said.

The lawsuit claims the fundraiser was promoted as the "First Annual
Joey Arena Dance for Health Day" and "A Special Event for a Special
Little Boy!" Jason Davey, the Arenas' attorney, wrote that the Arenas
disclosed their son's medical information because they expected to
receive money directly. Davey, of Brian W. Costello law firm, also wrote
that volunteers told donors their contributions would help pay for Joey
Arena's medical expenses.

"Children's Mercy did not use the funds in any manner that could
reasonably be calculated to have directly benefitted" Joey Arena or his
parents, Davey wrote in the lawsuit.

Joey Arena underwent surgery in May 2002, when he was 15 months old.
The lawsuit estimated the successful operation cost more than $500,000.

Sept said the surgery cost about $100,000, and all but $3,700 was
covered by Frank Arena's health insurance. Sept said Frank Arena
received a check for $1,000 from the Wal-Mart Associate in Critical Need
Trust and, without giving notice, stopped going to work at the Wal-Mart
Supercenter in Shawnee the next day. His employment was terminated 12
days later, Sept said.

Sept said Wal-Mart donated a total of $8,200 to the Children's Miracle
Network in 2002, including a $1,000 grant from the Wal-Mart Foundation.
Sept said Wal-Mart was auditing the fundraiser to determine whether the
company made money after covering costs, which included promotional

Jan Murfield, director of the Children's Miracle Network in Kansas
City, Kan., said the group never raises money for individual children.
Instead, Murfield said, donations are split between the pediatric unit
at KU Medical Center in Kansas City, Kan., and Children's Mercy in
Kansas City, Mo.

Murfield wouldn't discuss the Arena case.

Children's Mercy referred questions to the Children's Miracle Network.


Retailer's potential stirs zeal over bill               Would it foster Wal-Mart banks?

26 July 2003

In September, when Congress returns from its recess, the House of
Representatives is likely to vote on a bill that, depending on its final
language, could either help or hinder Wal-Mart Stores Inc.'s ability to
break into the financial services business.

Opponents of the measure in its current form say it could allow the
Bentonville retailer to open its own bank nationally. They question
whether a large commercial company like Wal-Mart could apportion credit
impartially, and they worry that banking deposits could be used in
nonbanking areas of the company's business, unnecessarily putting funds
at risk.

While Wal-Mart has attempted to get into banking several times in the
past, the company said it has not decided on a course of action to
broaden its financial services offerings. Opponents have used the
specter of a Wal-Mart bank to try to craft the measure to their liking.
The retailer says it remains neutral on the matter.

As originally written, a section of the proposed Financial Services
Regulatory Relief Act of 2003 - House Resolution 1375, introduced by
Rep. Shelley Moore Capito, R-W.Va.- would have allowed owners of
industrial loan corporations to open branch offices nation- wide.
Industrial loan corporations are like banks except they don't offer
on-demand checking accounts. Industrial loan companies only exist in
five states.

In 1999, Congress determined banks are not allowed to be owned by
commercial companies, when it passed the Gramm-Leach Bliley Act.
However, the last banking overhaul left out industrial loan companies,
which can be owned by nonbanking companies such as automakers or

The bill garnered considerable attention from opponents of Wal-Mart
Stores Inc., who believe the retailer wants to buy an industrial loan
company so it can open banking branches in its stores nationwide.

A coalition consisting of the National Grocers' Association, the
Independent Community Bankers of America and the United Food and
Commercial Workers union led the push for language in the bill that
would place restrictions industrial loan companies.

Federal Reserve Chairman Alan Greenspan also weighed in against the

Last summer the California Legislature put the kibosh on Wal-Mart's
intended purchase of Franklin Bank, an industrial loan corporation in
that state. In August, California Gov. Gray Davis, a Democrat, signed
into law a measure making it illegal for industrial loan companies to be
owned by commercial firms.


Rep. Paul Gillmor, an Ohio Republican, said an acceptable compromise
has been reached on the matter of industrial loans. Under language to be
incorporated into the bill, companies that own industrial loans would be
barred from branching nationally if they generate more than 15 percent
of their revenues from nonbanking activities.

The change would put the branching requirements for industrial loans in
line with other banks.

"Wal-Mart was asking to be treated differently than everybody else,"
Gillmor said.

Wal-Mart officials said the company has not filed an application with
state banking agencies to purchase an industrial loan institution.

"Internally we haven't made a decision," about whether to acquire a
financial services company, said Erik Winborn, Wal-Mart's director of
national government relations.

Although the company lobbied members of the House Financial Services
Committee, Winborn said, Wal-Mart had not taken a position on the
section of the regulatory relief bill covering industrial loan
companies' ability to branch nationally.

Winborn called the debate on industrial loan companies a "live issue,"
noting that the measure has several supporters on the Financial Services
Committee and must be approved by the full House before being considered
in the Senate.

"Our critics have been making inaccurate assumptions" that Wal-Mart
wants to buy an industrial loan company and then open retail branches in
its stores, Winborn said.

The reason the retail giant tried to buy Franklin Bank last year,
Winborn said, was to use the industrial loan for internal transactions,
not retail banking.

At the time, Wal-Mart said it used third-party banks to process debit
card purchases, at a cost of less than 1 cent each. Each month, the
retailer processes more than 35 million debit transactions.


Still, opponents of commercial ownership of banks worry that the
retailer will use a change in the ability of industrial loan companies
to branch to open a national bank. They ask what would have happened if
Enron, the energy trading firm that withered into bankruptcy after its
leadership made a slew of unethical decisions, had owned a bank.

"If a commercial business is not doing very well, it is very tempting
to upstream money from the financial institution for other uses" within
the company, Gillmor said.

Others think Wal-Mart is unfairly being represented as a bogeyman.

"They're trying to frighten people," said Peter Wallison, a fellow at
the American Enterprise Institute, a Washington think tank that promotes
freemarket policies.

Noting that securities firms own retail banks, Wallison claimed the
notion that banking and commerce are separate under current law is a

"We want to keep Wal-Mart out of the banking business," said Ron Ence,
director of legislative affairs at the Independent Community Bankers of
America in Washington. Not only would a Wal-Mart bank stymie smaller,
regional banks, Ence said, but it could also hinder local communities

"If Wal-Mart owned the bank, deposits might not stay in the local
area," Ence said. "They might go back to Bentonville."


Lawmaker, women's groups hit Wal-Mart
The retailer denies it pushes its workers to go on welfare.

By Cathleen Ferraro -- Bee Staff Writer - (Published July 24, 2003)

Wal-Mart Stores Inc. came under fire Wednesday from a California
politician who alleged the company does not offer affordable health
insurance and instead encourages employees to sign up for welfare, food
stamps and other government subsidies.

The retailer, based in Bentonville, Ark., vehemently denied the claim.

"In no way does Wal-Mart encourage associates to apply for public
assistance, and anyone who states otherwise is misinforming the public,"
said Sarah Clark, a Wal-Mart spokeswoman.

About 50 percent of the retailer's 1 million employees nationwide have
health insurance through the company, Clark said, with Wal-Mart paying
for two-thirds of coverage.

The company estimated about 40 percent of its work force has health
coverage through spouses, parents, second jobs, Medicare, school or
another source.

At a Capitol news conference Wednesday, Assemblywoman Sally J. Lieber
and representatives of state and national women's groups condemned what
they called Wal-Mart's low wages, saying the company's health plan is

The Santa Clara Democrat said she plans to introduce legislation in the
next two months that would force companies offering inadequate wages and
health benefits to reimburse California for the cost of covering public
assistance expenses used by their workers.

Lieber also distributed copies of information she said Wal-Mart gives
employees about how to use an Internet-based service for employment and
income verification if workers apply to a social service agency.

"We're in the middle of painful cuts at the Legislature to programs for
people who need it the most because of this state budget crisis," said
Lieber, "while Wal-Mart, one of the largest and wealthiest corporations
in the world, facilitates through its low wages ways for employees to
access public assistance programs, to get on welfare. That's pretty much
a smoking gun."

The giant retailer denied that it directly distributes to employees
information on theworknumber.com, an Internet service used for proving
employment status. Instead, Wal-Mart hands out such information to store
personnel managers, who have the option to share it with workers.

"It could be used to verify employment when applying for public
assistance," Clark conceded, "but it also can help with verification of
employment when applying for car loans or mortgages, too."

Lieber said Wednesday that Senate Bill 2, dubbed the "pay or play"
legislation and introduced earlier this year by Senate President Pro Tem
John Burton, D-San Francisco, would also improve employee access to
health benefits.

SB 2 would require employers to offer health insurance to their
California workers or pay into a purchasing pool where employees could
get coverage. The bill is now in a conference committee for language

Wal-Mart would not estimate an average hourly wage for its California
employees. But Lieber said her staff's research showed it was roughly
$8.50 an hour for full-time workers in California.

At that wage, a single employee with no dependents would earn take-home
pay of $1,215 per month, if working a 40-hour workweek. Wal-Mart
officials said the company offers medical insurance plans that would
cost between 2.1 percent and 5.4 percent of a single person's monthly

Wal-Mart workers, approached outside the Natomas store, did not wish to
discuss details of their benefits package. But five of six employees
said they received health insurance through the company. None would give
his or her full name or estimate what percentage of their paychecks go
to health insurance.

Statewide, Wal-Mart operates 170 namesake stores, Sam's Clubs and
distribution centers employing some 55,000 people. Worldwide, it
operates 4,400 stores with 1.4 million employees.

Last year Wal-Mart earned $8 billion on sales of $244.5 billion.

Getting to Wal-Mart facts not easy task

Published in the Herald News 07/20/03
Ted Slowik 

It's hard to know who to believe in the war of words between Wal-Mart
and unions, who are making Joliet the latest battleground over efforts
to organize workers. Both sides spew so much propaganda, it's difficult
to tell who's telling the truth.

  United Food and Commercial Workers, the union that represents people
who work in supermarkets, wants you to think that Wal-Mart is a greedy
corporation that exploits workers by paying low wages and offering
meager benefits.

  "Behind the yellow smiley-face of the all-American Wal-Mart myth is a
company ... where workplace policies may mean workers need two jobs and
depend upon public support to get by," according to the UFCW's Web

  The company denies that it is anti-union. Its official stance on
unions is stated on its corporate Web site.

  "At Wal-Mart, we respect the individual rights of our associates and
encourage them to express their ideas, comments and concerns. Because we
believe in maintaining an environment of open communications, we do not
believe there is a need for third-party representation," Wal-Mart says.

  Still, there are volumes of evidence about the company's steps to
promote their employees' independence whenever a union attempts an
organizing campaign. Tactics range from anti-union messages posted in
employee break rooms to firing workers who are active in organizing
efforts to shutting down departments or closing stores if an
unionization effort ever is successful, according to several complaints
UFCW has filed with the National Labor Relations Board.

  Wal-Mart counters that unions keep butting in where they are
unwanted. After unsuccessful organizing campaigns in Dubuque, Iowa, and
Las Vegas last year, Wal-Mart quoted a Sam's Club employee in a
company-issued press release.

  "They (the unions) are like vultures. They just keep circling and
circling even though we had 140 associates send them letters asking them
to bow out and leave us alone," the employee was quoted as saying.

  Both sides fight hard, which is why things could get very interesting
in Joliet by early 2005, when the new Wal-Mart is scheduled to open at
Illinois 59 and Theodore Street. While researching the topic, I found
news coverage of the Wal-Mart vs. union battle being waged in

  The board of supervisors in Contra Costa County last month voted to
ban superstores, which are the combined discount/grocery stores that
Wal-Mart typically builds nowadays. In making its decision, the board
cited a study done by the San Diego County Taxpayers Association, a
nonprofit, nonpartisan organization.

  The study showed that poorly compensated workers at big-box stores
would cost taxpayers millions of dollars through the loss of jobs at
other stores and the need for government agencies to provide benefits to
the workers who have none.

  "Even increased sales and property tax revenues would not cover the
extra costs of necessary public services," the San Franciso Chronicle

  Wal-Mart maintains that many of its employees don't need insurance
from the company because they are students, senior citizens or others
who receive coverage elsewhere.

  In Contra Costa County, Wal-Mart collected more than 40,000
signatures and submitting them last week. If 65 percent of the
signatures are deemed valid, then a referendum will be held and voters
will decide whether the anti-superstore ordinance will stand.

  Even if you like shopping at Wal-Mart and don't particularly care for
unions, it's hard to deny that the company's employee policies create
significant social costs for taxpayers. Unions and community-action
groups will no doubt be driving this point home over the coming months
as Wal-Mart prepares to build a second store in Joliet.

Reporter Ted Slowik can be reached at (815) 729-6053 or via e-mail at



Wal-Mart's New Slogan: Union Made?

Evan Hessel, 07.23.03, 8:00 AM ET

Coming to a Wal-Mart near you: Unions.

Founder Sam Walton built the retailer on the premise that happy
employees made for happy customers. The formula worked. Wal-Mart (nyse:
WMT - news - people ) is the nation's largest retailer, ringing up
$244.5 billion in sales last year alone.

But these days, blue-vested Wal-Mart greeters are far from cheerful.
They have filed more than three dozen separate lawsuits in 30 states
accusing Wal-Mart of violating federal wage-and-hour rules, sex
discrimination (see Wal-Mart's Women Troubles) and threatening workers
involved in union activities.

Meatcutters at a Jacksonville, Texas, store won the right June 18 to
unionize, making them the first employees to collectively bargain in the
company's 41-year history. The fight ends a three-year struggle for one
of the biggest unions in the nation, the 1.4-million member United Food
and Commercial Workers.

The UFCW is strategically attacking Wal-Mart in markets where the
retailer is planning to expand: the heavily unionized Northeast,
Mid-Atlantic and California, territory where Wal-Mart has already opened
20 new stores this year. Having exhausted sites in small-town America,
Wal-Mart is rolling into urbanized areas with plans to open or expand
300 new stores in fiscal 2004. "When you win a union election in one
store, you see that domino effect. Soon they're all going to fall," said
Leonard Purnell, director of organizing for UFCW Local 1776 in

Wal-Mart earned $8 billion last year. But the retailer remains hooked
on new store openings to help fuel its growth both domestically and
internationally. Overall sales have slowed from 12% annual growth in the
mid-1990s to the current 10% annual growth. Increasingly, it is looking
like some of those new stores will be staffed by union employees.

Not surprisingly, Wal-Mart soft-pedals the labor issue. "Our associates
would rather save their hard-earned dollars and talk to their
supervisors and managers than pay someone else to do that for them,"
said Wal-Mart spokeswoman Christie Gallagher.

The retailer says it pays its 1.1 million U.S. workers competitively,
treats them fairly and allegations in lawsuits are aberrations. Maybe
so, but if recent developments are an indication, Wal-Mart could have
some problems dispelling negative public relations.

Hourly workers have filed 40 separate lawsuits alleging store managers
systematically forced them to work off the clock, according to
Wal-Mart's April quarterly report. On Tuesday, a California judge
postponed indefinitely a hearing to decide if 1.5 million women can be
added to a lawsuit by seven current and former female Wal-Mart
associates alleging that the retailer systematically paid women lower
wages and denied them promotions. And in Villa Rica, Ga., Wal-Mart
settled a lawsuit alleging store managers spied on employees and
threatened them for soliciting for the union in their free time.

In Wal-Mart's home state of Arkansas, the state Supreme Court
overturned a lower court's decision in June banning UFCW workers from
entering Wal-Mart stores.

The decision gave momentum to UFCW national unionization drive underway
in 26 states. More than 200 UFCW members stormed a Saddle Brook, N.J.,
Wal-Mart in November as part of the UFCW's effort to organize workers in
areas where Wal-Mart is opening stores.

All this is likely to add up to some big numbers for Wal-Mart.
Employees at the retailer currently earn an average of $7.50 per hour,
which is $2 to $3 less--a whopping 20% to 30%--than unionized
counterparts at Target (nyse: TGT - news - people ) and Kmart (nasdaq:
KMRT - news - people ). A typical Wal-Mart employee earns $18,000
annually and either isn't eligible for or cannot afford premiums on
health or pension benefits.

Wal-Mart's past success has been tied to superior logistics, keeping
costs low and driving volume. Wal-Mart doesn't have a lot of headroom to
absorb higher wage costs. A typical Wal-Mart does about $53.7 million in
sales with an operating margin of about 7.5%, surely not enough to cover
a 20% to 30% boost in wages without raising prices. Wal-Mart could
always trim staff, but what would that do to its prided customer

This might be good news for competitor Target. But it's a bad omen for
investors paying 30 times 12-month trailing earnings for the retailer's
stock, which closed yesterday at $56.90, up 94 cents.


Guatemala on front line of Wal-Mart price war
July 17, 2003
By Greg Brosnan

VILLANUEVA, Guatemala, July 17 (Reuters) - This ring of shantytowns
outside Guatemala City, where the smell of raw sewage hangs in the air
and armed gangs prowl at night, is a world away from the bright lights
of Wal-Mart aisles in suburban United States.

Even so, impoverished workers assembling clothes in a factory here that
supplies the chain's low-priced "Faded Glory" label, are among frontline
troops in what analysts see as a looming global price war in the U.S. apparel
manufacturing sector, led by the world's biggest company.

Apparel-exporting nations are holding their breath for a lifting of
world garment export quotas in January 2005, which they say will see
companies like Wal-Mart Stores Inc. (WMT.N) shift more
manufacturing to Asian countries with rock-bottom wages. Some fear heavy
job losses in places like Villanueva.

Textile trade groups estimate China could gain control of 65 percent to
75 percent of the U.S. apparel market within a few years after the
quotas are lifted, and have pressed President George W. Bush to restrict imports.

Like most of its competitors, Bentonville, Arkansas-based Wal-Mart has
outsourced much of its apparel manufacturing to regions like Central
America where wages are a fraction of those in the United States.

Every morning thousands of rural migrants who scrape a living on the
outskirts of this rambling city of 3 million inhabitants, pour out of
Villanueva's muddy hills into some 20 export-processing plants, or
"maquilas," mostly producing clothes for U.S. retailers.


Guatemala's 233 mostly Korean-owned maquilas are granted government tax
breaks for providing more than 100,000 jobs.

Since springing up in the 1980s they have become a major source of
employment for often illiterate migrants from Guatemala's countryside
who have flocked to the city in search of work, many of them Maya
Indians who fled a 36-year civil war that finally ended in 1996.

"The industry has contributed in a big way to the economic development
of the country," said Luis Oscar Estrada, head of Guatemala's maquila
trade association.

But critics who accuse maquila owners of labor abuses say that as
retailers like Wal-Mart increasingly switch production to poor
countries, workers and their families are simply trading rural poverty for urban misery.

"Instead of living in the countryside, we're living beside a garbage
dump in houses on the edge of ravines," said Mary Mejia, a former
maquila worker who runs the Villanueva office of the American Federation
of Labor and Congress of Industrial Organizations (AFL-CIO).


Wal-Mart does not disclose suppliers and no Guatemalan maquila would
admit to being on its payroll or grant this reporter a visit or

But a seamstress in her mid-20s earning $4.33 for a basic day's work at
Villanueva manufacturer Yu-Jin, said she was one of 250 workers that
stitch together clothes for Wal-Mart's "Faded Glory" line at the factory. She
said her job was her family's economic lifeline.

Sitting in the small, windowless room she shares with her husband and
infant son in a grubby tenement building where nine families compete for
a single shower, she said the hard work was stressful and the money -- although
in line with Guatemala's minimum wage -- is meager.

"It's enough money for food, nothing else," she said, speaking on
condition of anonymity for fear of being fired.

But the seamstress, whose husband also works in a maquila, said making
clothes for Wal-Mart was a dream job compared with the years spent
toiling for a pittance as a household maid, previously among the only options open to
a young woman arriving in the capital from a rural village.

Labor groups have criticized Wal-Mart for refusing to adopt United
Nations standards on working conditions, saying the world's biggest
company has a responsibility to set the standard on workers' rights.

Wal-Mart contends it is a leader through its own factory certification
standards, which require suppliers to meet conditions such as banning
child labor.

"We have made a commitment to helping improve working standards around
the world on a grass-roots, factory by factory basis," Ken Eaton, head
of Wal-Mart's global procurement division said in a written response to
questions from Reuters.


Many fear a massive shift of manufacturing to Asian countries in 2005
when the World Trade Organization is slated to lift garment quotas.

"It would be a complete disaster for our economy," said Guatemalan
Economy Ministry official Leticia de Ovando. "There would be mass
unemployment and far less money coming in."

Eaton said he "wouldn't want to speculate" on whether Wal-Mart would
shift more production to China in 2005.

"Today, the quotas probably restrict us from purchasing more goods from
China, but several years from now the situation could well be
different," he said.

Eaton said a Central American free-trade agreement, now under
consideration, could make factories there more attractive, and noted
that Wal-Mart "would never want to have all our eggs in one basket" by sourcing too much from China.

"We have stores today in Mexico and South America, and speed to market
is very important to us, which helps make Central America attractive to
us as a source of supply," he said.

The maquila trade association's Estrada said Guatemala's maquilas could
never compete with Chinese wages but were already honing themselves to
stay competitive by speeding up delivery times to the United States.

To the Wal-Mart seamstress, for better or worse, that means more work.
She said managers had recently announced a rash of late-night overtime
to complete yet another rush order.

She said women in the United States who bought such a garment on a whim
might wear it casually without any thought to its origins -- or just
toss it aside without trying it on.

"They don't know how much we've suffered to make it," she said.

(With additional reporting by Emily Kaiser in Chicago)

07/17/03 18:29 ET

Posted July 13, 2003
Wal-Mart contests Manitoba union vote process

THOMPSON , MAN. - Workers at a Manitoba Wal-Mart store cast ballots in a significant vote Friday, one that could result in the the retail
giant's only unionized employees in North America.

The United Food and Commercial Workers Union (UFCW) claims it has the
support of more than 50 per cent of the 130 eligible workers at the
store in Thompson.

But Wal-Mart says it contests the conduct of the voting process,
including coverage by the media. Wal- Mart claims a CBC cameraman was
too close to voters while taping footage from the store's parking lot,
and could have influenced the voters' decisions.

In a statement, the company says: 'Wal-Mart is concerned that the
integrity of the voting process in Thompson is protected. Under Manitoba
law, there is no electioneering permitted at a workplace or polling
station on the day of a vote.'

That means the ballot box will remain sealed and the votes will not be
counted until the courts and labour relations board sort the matter out.

However, the UFCW says CBC's presence was not influencing anyone and
called the entire process fair.

Colin Trigwell, organizing director with the union, denounced the move.
'It's terrible. To me, it's another stall tactic in delaying the
democratic process,' he said.

The Manitoba Labour Relations Board did not return phone calls to the
CBC, but a board representative said Thursday there is no law
restricting the media from covering any labour vote in the province.

The union vows this delay will not slow down its drive to unionize all
Wal-Marts in the province.

Written by CBC News Online staff -June 28, 2003
Copyright 2003 Canadian Broadcasting Corporation - All Rights Reserved

** Wal-Mart: The Godzilla of grocers **

A survey by Big Research shows that Wal-Mart is truly the biggest retailer in the world and still growing

By Garrett Glaser

July 10 — With $50 billion a year in grocery sales, by 2006, Wal-Mart is estimated to supply almost 12 percent of all food sold in the U.S. — and the world’s largest retailer isn’t showing any signs of slowing.

 ACCORDING TO ONE retail report, Wal-Mart is the top-rated store for consumers.
       Every month, a company called Big Research in suburban Columbus, Ohio surveys 20,000 consumers around the country about their shopping habits. From data gathered last June, the report shows Wal-Mart was the customer favorite.
       Wal-Mart is the the biggest retailer in the world, and it’s growing even bigger, causing tremendous change along the way. In the supermarket industry, some would say an upheaval.
       “They’re obviously the 800 pound gorilla in the grocery business right now,” says Gary Drenik, CEO of Big Research. “They’re number one with all consumers 18 and over in our surveys. They’re also number one with women shoppers, number one with incomes under $50,000, and also number one with people over $50,000 and even $75,000.”GROCERY GODZILLA?
       Other numbers are even more mind numbing. Consider this:
* Forty-five percent of women who buy apparel at Wal-Mart also buy their groceries there.
* Forty-seven percent of men do the same.
* Forty-two percent of people buying childrens’ wear do the same.
* And a whopping 80 percent of the people who go in to buy beauty aids and cosmetics are now also shopping Wal-Mart for the majority of their food purchases.
       Even with those numbers, there still is a strong disagreement on the significance of Wal-Mart’s growth into groceries. A recent report from Merrill Lynch says, “We continue to believe that new sales and market-share data do not support the bear argument that Wal-Mart is the root of all food retailers’ problems.   And Meredith Adler, who follows food and drug retailing for Lehman Brothers, agrees that plenty of people don’t shop only on price. “There is an equation — a value equation that every customer has in their mind that includes a lot of things besides just price.”
       Adler says that within the equation, consumers consider many things, such as how far a store is from their home, the quality of stores’ products, the stores’ assortment and how many things they purchase at the store?


Wal-Mart gets chilly reception in U.S. cities

STOUGHTON, Wis., July 10 (Reuters) - Main Street
in this town of 12,500 near Madison, Wisconsin,
looks like thousands of others, except perhaps for
the Norwegian flags lining the road, a tribute to the
immigrants who settled the area.

There's an antiques shop, a little drug store, a movie
theater, and down the road, there's a Wal-Mart.

People around here like the small-town feel, but they
also like their Wal-Mart -- they just don't want to see it
getting any bigger. So they're putting up a fierce fight
against Wal-Mart Stores Inc.'s (WMT.N) proposal to
build a new supercenter on local farmland.

"There's a Wal-Mart in town now and it's very well
liked, but it's a little one," said Larry Peterson, who
helped organize local opposition to the proposed

"The proposal that Wal-Mart is making is one of
these megastores. It would change us from a local,
self-sufficient town to a regional shopping hub," he

Wal-Mart, the world's biggest company, is banking on
supercenters to drive domestic revenue and profit
growth over the next few years. The stores, some of
them as large as four football fields, carry a full line of
groceries along with clothing and other goods usually found in its

The retailer dominates rural and suburban markets,
but as it bumps up against more urban areas -- with
plans for increasingly large stores -- resistance is

Wal-Mart plans to open more than 200 supercenters
in the United States this year. For the first time in
Wal-Mart's history, U.S. supercenters in 2003 will
outnumber the smaller discount stores that do not
carry a full line of groceries.

The retailer opened its first supercenter in 1988, and
is now the biggest grocery seller in the world. The
idea is, customers may only visit a discount store to
stock up on diapers or detergent a couple of times a
month, but they'll need bread or milk twice a week.

                     "UFF-DA WAL-MART"

Peterson's anti-supercenter group calls itself "Uff-da
Wal-Mart," using a Norwegian expression of
displeasure to reflect the community's roots. A city
council hearing earlier this week on an ordinance
that would block large retail development for six
months drew a standing-room-only crowd, nearly all
of them opposed to large-scale new development.

"People live in the town because of its tone and its
culture and its history," Peterson said. "They don't live
here because they want rapid access to lots of
shopping malls."

Wal-Mart's Stoughton proposal calls for a 180,000-square- foot store on
farmland on the outskirts of town, dwarfing the 40,000-square-foot
existing store. Residents would rather see Wal-Mart expand at its
current location, or perhaps open a small grocery store on the other
side of town.

Stoughton isn't alone in its Wal-Mart opposition.

Dallas, Texas, recently denied Wal-Mart's request to
build a massive supercenter with retail floors on top
of a parking structure. New Orleans also turned down a proposal for a
supercenter, and dozens of other communities are trying to muster enough
supporters to block new Wal-Mart developments.

For its part, Wal-Mart says it wants to work with
communities, and has enough expansion opportunities that it should not
have to force its way
into an unwilling area.

It regularly modifies its stores to meet local tastes,
whether it means adding stables in Pennsylvania's
Amish country, where shoppers often arrive by horse
and cart, or extra-spicy salsa in communities with
large Hispanic populations.

In some places, Wal-Mart has found residents much
more amenable than the local politicians.

In California, for example, where Wal-Mart plans to
open dozens of supercenters in the next few years,
some local governments have passed ordinances
blocking megastores that derive more than 25
percent of their revenues from food sales.

But in at least two cases, Wal-Mart has rallied
sufficient resident support to override the ordinances.

                     GOING VERTICAL

The next hurdle for Wal-Mart is how to build stores in
densely populated urban areas. The retailer has one
store on the edge of Philadelphia and several around
Los Angeles, but None in Chicago or Manhattan.

"As they start to move more and more into urban
areas, it's a different real estate game. You have to
start thinking about multilevel stores, which are less
convenient to consumers," said Michael Collins,
partner with consulting firm Bain & Co.

The answer may lie underneath a soccer stadium in
Dalian, China, where Wal-Mart has built a multilevel
store. Wal-Mart has also opened a three-level store
in the Baldwin Hills neighborhood of Los Angeles
this year, so the retailer is clearly considering that
model for U.S. expansion.

But going vertical can be problematic. Wal-Mart's
supercenters work because customers like the
convenience of stopping in for basic grocery items,
but are often tempted to also pick up higher-margin
items like clothing.

If groceries are on the ground floor, how many
customers would venture upstairs to check out the
more profitable merchandise? And if the groceries
are on a higher floor, will it still be convenient enough
to lure customers away from other grocery stores?

"People hate to go up," said Thom McKay, a vice
president with architecture and consulting firm RTKL.
"They may go up one level if they know there's food
there. They're more likely to go down than up,
especially if they can see down."

Wal-Mart's three-level store in Los Angeles has
shopping cart escalators so people can bring their
fully-loaded carts between floors, but McKay said the
novelty quickly wears off, and the escalators can
become an annoyance rather than a convenience.

The second option is going small -- at least by Wal-Mart standards. The
retailer runs about 100
Neighborhood Market grocery stores that include
pharmacies and photo finishing booths, but little in
the way of general merchandise.

Those stores could easily find their way into major
urban areas, but Wal-Mart plans only a handful of new ones this year,
in part because it doesn't have
enough store managers to open as many as it would
like. The retailer said it was happy with the smaller
stores, but supercenters are the priority for now.

Make a point of writing your Senators and member of Congress today
opposing legislation to allow industrial banks to open branches in other
states and avoid state regulation, and authorizing ILCs to offer
checking accounts.

Big retailers could become interstate bankers Wal-Mart may gain new power in finance


8 July 2003
Detroit Free Press
You already can buy groceries, school supplies and lawn mowers at
mega-department stores, not to mention that puppy the kids have been
begging for. Now Congress is considering allowing retail behemoths to
handle your checking and savings accounts, too.

The change could create the First National Bank of Wal-Mart. How about
Sears Bank & Trust? Or Volkswagen Commerce Bank?

Banks inside supermarkets and some department stores have become
commonplace. But those are existing banks partnering with stores. A bill
before Congress would make it possible for retailers and others to own
their own bank with branches all over the country.

The proposed changes in federal banking laws would blur the lines
between commercial enterprises and financial institutions by allowing
companies to buy entities known as industrial loan companies (ILCs) and
branch them out to other states.

ILCs are niche financial institutions that exist in only a handful of
states such as California, Utah and Nevada. Current federal law doesn't
allow ILCs to move beyond state lines, but the proposed law would lift
restrictions on such moves and eliminate states' abilities to restrict
out-of-state banks from setting up shop.

Any business could buy an ILC, but it is Wal-Mart Stores -- the world's
largest company with $244 billion in sales -- that many bankers cite as
their greatest fear. Wal-Mart is the Incredible Hulk of commerce, and
small banks say it's a juggernaut that could level competitors.

"Wal-Mart would have the potential to bring, if not the Black Death, at
least the plague to thousands of community banks," said Kenneth
Guenther, president and CEO of the Washington, D.C.-based Independent
Community Bankers of America .

More than bankers are worried about some of the changes Congress is
considering. A bill that has passed the House and is now before a Senate
committee would allow financial institutions to pay interest on business
checking accounts, something they cannot currently do. Giving ILCs that
power is a mistake, according to Federal Reserve Chairman Alan

The "amendment would alter the structure of banking in the United
States," he warned in a letter to the chairman of the House Financial
Services Committee. Doing so for ILCs would run counter to laws
"prohibiting the mixing of banking and commerce," he said.

Federal Deposit Insurance Corp. Chairman Donald Powell does not agree
that ILCs are a threat to other financial institutions. In a May speech
to banking supervisors, he said, "While I understand the anxiety some
people have on this issue, fear of competition should not be the
compelling argument in formulating good public policy."

Because ILCs are creations of state governments, what they are allowed
to do varies from state to state. In general, they were created with
limited lending abilities to serve areas traditional banks had

While they are not supervised by the Federal Reserve, there are 51 ILCs
that carry FDIC insurance, giving them government backing for up to
$100,000 per account and making them subject to FDIC examinations. They
are also subject to regulation by their chartering state.

Many companies use them to provide financial services related to debit
and credit card operations.

"A lot of things are being said about ILCs, but the record and the
facts and the picture that we have speaks to their safety and
soundness," said Rep. Jim Matheson, D-Utah. His state has 24 ILCs
insured by the FDIC, and he supports lifting restrictions on them.

More reach by ILCs would offer businesses and ultimately consumers more
financial options, he said: "These institutions are regulated by the
FDIC. There is a strong separation between the ILC and the parent

Guenther, of the community bankers group, still sees problems. "It's a
fundamental principle -- banking and commerce ought to be kept
separate," he said.

Banks owned by commercial enterprises would compete for customers with
all banks in a market where they're located, but smaller,
community-based institutions could be the most vulnerable to the

A multibillion-dollar institution, such as Bank One or Detroit-based
Comerica in the Midwest, offers a range of personal, commercial and
investment banking services that an ILC would probably not try to match.
But an ILC could be vying for many of the same customers that keep
smaller banks in business.

Last year Wal-Mart made an offer to buy Franklin Bank of California ,
an ILC. Its efforts were stymied when California lawmakers prohibited
non-financial institutions from buying ILCs. Owning an ILC in southern
California could have affected more than Wal-Mart customers in the
Golden State. For example, Wal-Mart could have used the bank to handle
debit transactions for all its stores, reducing the company's costs.

While Wal-Mart has some financial services already in place -- payroll
check cashing, money orders and transfers -- it has no plans to purchase
an ILC, said spokesman Tom Williams.

About 20 percent of Wal-Mart's customers don't have a bank account, so
there is a demand for those services, Williams said. In addition, about
800 of the 3,500 Wal-Marts and Sam's Club locations have bank branches
in the stores. Those are banks that Wal-Mart has a contract with to come
in and offer services.

Sears, Roebuck & Co. owns a Utah ILC, but the retailer has not lobbied
to expand the powers or reach of the institution, said spokesman Chris
Brathwaite. "We're focused on a number of things, and this isn't one of
them," he said.

Opposition to Wal-Mart more than just a 'few'

Jim Becker,Citizens Against Reckless Development (C.A.R.D.), Honolulu, HI
HonoluluAdvertiser.com - July 5,2003                                                                  

To my amazement, Wal-Mart's hired guns are still peddling the canard that opposition to the planting of the world's largest box store in the middle of Ke'eaumoku residential neighborhoods comes from a few malcontents with "selfish motives." (An interesting choice of words from the world's largest company, which faces a monster lawsuit from its 700,000 women employees for discrimination in pay and promotion and just lost a mammoth suit for working its people thousands of hours of unpaid overtime.)

We "few" include U.S. Rep. Neil Abercrombie (who once represented the district in the City Council), former Lt. Gov. Mazie Hirono (who once represented it in the House), state Sen. Carol Fukunaga (who represents it now), state Reps. Scott Saiki and Ken Hiraki (whose districts meet at Ke'eaumoku Street), City Councilwoman Ann Kobayashi and Mayor Jeremy Harris, who says the project will generate intolerable traffic gridlock, pollution and noise 24/7, kill local businesses and result in a net loss of jobs and tax revenues.

How "few" is a few?

Add in the U.N. Environmental Center, the former director of the city Department of Planning and Permitting, several unions, environmental groups, retail establishments, a top law firm and some 1,300 people who have signed an invitation to join Citizens Against Reckless Development - not some airy-fairy "we like cheap socks" petition - and a similar number demanding a traffic impact study before the gridlock and poisonous air.

Some few.

As for selfish, we treat the women in all our organizations equally; we all work countless hours of unpaid overtime to fight this blatant case of corporate greed.

Wal-Mart probed over fuel tanks
Retailer possibly violated state tank laws

Sun staff writer 

July 2, 2003
The Florida Department of Environmental Protection is investigating
more than a third of Florida's Wal-Mart facilities for possible
violations of the state's petroleum storage tank laws, agency officials
said Friday.

Since 1998, regulations have required most above-ground fuel tanks used
by gas stations, auto-repair facilities and other service providers to
be registered with the state at the time of their installation. Many
Wal-Marts, including supercenters with oil-and-lube operations, and
retail stores with backup power generators, have on-site fuel storage

Businesses with tanks on their property also must prove they have the
financial resources to pay for a cleanup if a spill occurs.

But in as many as 75 Wal-Mart locations statewide, DEP officials said,
the company appears to have failed to comply with one or more of
Florida's tank laws.

The oversight means that for as many as five years, the environmental
agency was unaware of the company's on-site fuel sources and unable to
ensure they were operating properly.

"If the state doesn't know it's there, and there is a leak from the
system, and the leak enters Florida's ground or surface water, it could
be an expensive cleanup and have potential impacts to human health,"
said Marshall Mott-Smith, administrator of Florida's storage tank
regulation division.

Daphne Moore, a Wal-Mart spokeswoman, said the retailer is working with
the state to address the concerns.

"It is a situation that we are aware of," Moore said. "We hired an
outside consultant to regulate all the tanks and evaluate all the tanks
as well."

Moore said that varying regulations between states led to the company's
failure to comply with Florida laws.

"Once we became aware of the need to register these tanks we did so,"
she said.

Roughly 92 percent of the state's drinking water is supplied by
groundwater. To protect this valuable yet vulnerable resource, Florida
has adopted some of the toughest petroleum contamination prevention and
cleanup laws in the country. In 1983, Florida become one of the first
states nationwide to regulate above- and below-ground storage tank

Today, all of the state's regulated tanks are required to provide
secondary confinement — in essence a tank within a tank — to ensure
against accidental leakage.

To enforce state laws, DEP contracts inspection duties to private
businesses or governmental agencies in all 67 counties. In most cases,
inspectors are pulled from the ranks of local environmental offices. In
Alachua County, staff with the Environmental Protection Department
conduct the reviews.

But the annual regulatory compliance checks mandated by the state are
impossible to perform when tank owners fail to register them, DEP
officials say. With Wal-Mart, because the company never informed the
environmental agency when the tanks were installed, state inspectors
were unaware of their existence, Mott-Smith said.

On Friday, officials with the storage tank regulation division would
not release the locations of the stores under investigation, citing
legal issues. But Mott-Smith said stores under review included
supercenters — which often have Tire and Lube Express services — as
well as smaller retail stores.

Wal-Mart stores that sell food and require refrigeration typically have
above-ground fuel tanks inside their stores to power backup generators,
he said.

Tim Ramsey, Alachua County's tank program coordinator, said
Gainesville's two Wal-Mart stores had not been included in the state

Mott-Smith also said that none of the stores being investigated had
shown evidence of past or present leaks. However, failure to comply with
Florida's financial responsibility requirements could bring fines of as
much as $5,000 per violation, he said.

A meeting is scheduled with the state's tanks program supervisors this
week to discuss how to proceed.

Greg Bruno can be reached at 374-5026 or greg.bruno@gvillesun.com.

    Oregonians battle Wal-Mart

                                                       Statesman Journal file

The lines are long at a Wal-Mart Supercenter in Cool Springs, Tenn. A few Oregon cities are challenging Wal-Mart expansion plans, saying the retailer hurts other local businesses.

Retail goliath’s spread meets resistance locally and across the state.

The Associated Press
June 30, 2003

HILLSBORO — Somewhere in America, a Wal-Mart store opens almost every day. During the next 18 months, the retail giant plans to add eight to the 27 already in Oregon.

Six more Oregon stores are scheduled for expansion.

However, some towns are digging in their heels against the spread, saying the stores are unsightly, add to traffic, are out of character with their communities and run local business out, contributing little but low-paying jobs.

The world’s largest retailer thinks that Northwest consumers want the stores and their low prices.

In four Oregon cities, opponents have won land-use battles or stalled plans for the stores.

Opponents have organized schoolchildren, created Web sites and allied themselves with competing grocers and their unionized workers.

Wal-Mart doubled the size of its store in Woodburn this year, and has plans to do the same to its store on Lancaster Drive NE in Salem. The company also is planning to build a 203,000-square-foot Supercenter next to Lowe’s on Turner Road SE.

In the past two months, planning commissions in Hillsboro and Oregon City have rejected Wal-Mart proposals. In Hood River, opponents have delayed Wal-Mart’s plans and in Lebanon, opponents have taken the company’s plans to the Oregon Land Use Board of Appeals. Wal-Mart also faces opposition in Salem, La Grande and Central Point.

The Arkansas company had nearly $245 billion in worldwide sales last year.

“Wal-Mart is almost like a political party: Either you love them or you hate them,” said Allan Miller, a professor of marketing at Towson University in Maryland.

The Hillsboro store would be 142,865 square feet and could expand to more than 210,000.

Vincent Dimone, whose house backs the property, launched the opposition by going door-to-door with 500 fliers.

Dimone and other opponents got a crash course in Oregon land-use law and found that the loss of their property value was not considered under state law.

Instead, opponents should stress noise, traffic, loss of trees and other development criteria.

Parents, teachers and students of a nearby private school joined the fray against the store, and students picketed.

Wal-Mart sent 30,000 mailers to Washington County residents and hired a public relations firm.

The two major issues for the Hillsboro Planning Commission became compatibility with the neighborhood and traffic.

Commissioners unanimously rejected the plan in May. The retailer has appealed to the city council.

In Hood River, where the company is proposing a 185,000-square-foot Supercenter to replace an existing store, opponents formed the nonprofit Citizens for Responsible Growth.

The store would be the first thing motorists driving from Portland would see of Hood River, the group says.

Kate Huseby, co-chairwoman of the opponents’ group, says she doesn’t want Hood River to lose hometown businesses to an international behemoth. They have raised $53,535 for their struggle.

Wal-Mart wants to build a 188,000-square-foot Supercenter in Lebanon on the Santiam Highway along the Santiam Wagon Road, a pioneer trail.

The owners of two local grocery stores and Friends of Linn County primarily focused their opposition on sprawl and the loss of grocery jobs that pay $13 to $14 per hour to Wal-Mart jobs that pay little more than minimum wage.

The planning commission and city council approved the land-use applications. Opponents have appealed to the state’s Land Use Board of Appeals.

Oregon City opponents included neighborhood associations, the owners of nearby Hilltop Mall and the United Food and Commercial Workers unions. They, too, contended that traffic would flood crowded roads while the city would lose housing, family-wage jobs and livability.

Wal-Mart flooded households with fliers.

The Planning Commission rejected Wal-Mart’s plans, saying that the company failed to show that Oregon City needs the store and had not adequately addressed the traffic question.

Wal-Mart plans an appeal.

As long as Wal-Mart continues to grow in Oregon, legal battles are not likely to stop. Central Point city officials say they feel bullied by Wal-Mart.

“I don’t like being run roughshod by people who think they know what’s best for us,” said Tom Humphrey, city planning director.

Copyright 2003 Statesman Journal, Salem, Oregon.
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Monday, June 30, 2003 (SF Chronicle)
Women and Wal-Mart
Ruth Rosen

WHEN BETTY DUKES first learned about Sam Walton, the founder of Wal- Mart,in a sociology class, she never imagined she'd become the lead plaintiff
in a sex-discrimination suit against the giant retailer. "I learned in
that class that Sam Walton had a profound vision and started Wal-Mart on a
faith venture. I have always deeply appreciated his visionary spirit and
his efforts to reach for the stars."
   As an employee at the Pittsburg store, Dukes had great dreams for her own
future. She would work hard and take seriously the challenge to get "all
the training and tools to reach your goals with a great company like
   But that's not what happened.
   "I was denied the training I requested to obtain promotions within the
company. When I complained about unfair treatment, I was unfairly
disciplined, demoted and forced to accept a pay cut. Moreover, I observed
men receive promotions to positions over and over again."
   Dukes' name is now associated with what may turn into the largest
employment discrimination case ever brought against a private employer, in
this case, the world's biggest retailer. On April 29, lawyers for women
suing Wal-Mart asked the U.S. District Court in San Francisco to certify
the case (Dukes vs. Wal-Mart Stores, No. C-01-2252 MJJ) as a class-action
suit that would represent a whopping 1.7 million women who have worked at
Wal-Mart since Dec. 26, 1998. A hearing on the motion for class
certification is scheduled for July 25.
   "I am participating in this case," Dukes writes in her sworn testimony,
"in order to insure that young women such as my nieces and other women are
treated fairly at every Wal-Mart store. The time has surely come for
equality for women . . ."
   Wal-Mart employs more than 1 million people who work in more than 3,400
   stores. Although women make up more than 72 percent of the Wal-Mart sales
force, they hold only one-third of the management jobs. Men hold 90
percent of Wal-Mart's store manager positions and only one woman is among
Wal-Mart's 20 top officers.
   Is this just a coincidence? Dukes doesn't think so. Nor do the other 110
women who have contributed sworn statements to the lawsuit and worked in
184 different stores in 30 states. They charge Wal-Mart with systematic
discrimination against women in pay, promotion and job assignments. The
suit also accuses the giant retailer of paying women 37 cents an hour less
than men for identical jobs.
   Reading these women's complaints is like visiting a corporate culture
stuck in the 1950s: Male managers force their female counterparts to
attend meetings at strip clubs or Hooters restaurants; they tell female
employees they don't need promotions or equal pay because "men need to
support their families;" and senior management regularly refers to women
employees as "little Janie Qs" and "girls." In keeping with its
conservative policies, the health insurance Wal- Mart offers its employees
doesn't cover contraception. Women consumers suffer limited choice as
well: The store refuses to dispense emergency contraception, or the
   Fortunately, the women of Wal-Mart have an ally in their battle. On June
22, the National Organization of Women, which has dubbed Wal-Mart a "merchant of shame," kicked off an "adopt a store" campaign to educate shoppers
about Wal- Mart's exploitation of its women employees. Thousands of NOW
members are visiting stores, wearing buttons that read "Wal-Mart Always
Discriminates"-- a play on the retailer's famous slogan, "Wal-Mart --
Always the Lowest Prices." NOW activists are also handing out palm-size
cards to shoppers that ask: "Wal- Mart: Always Low Prices, But Who Pays?"
Kim Gandy, President of NOW, says, "Consumers across the country need to
be able to spend their dollars with a clear conscience. Wal-Mart doesn't
afford us this option."
   Joining NOW is the Coalition of Labor Union Women, which has mobilized its
20,000 members to participate in the campaign.
   Also involved is the United Food and Commercial Workers' Union, whose
members work at competing retail stores and earn $2 to $3 an hour more
than Wal-Mart workers with equivalent jobs. The union is all too aware of
Wal- Mart's union-busting tactics. During the last four years, the
National Labor Relations Board has filed 40 complaints against Wal-Mart,
accusing managers in nearly 30 stores of coercing, intimidating and firing
employees who showed any interest in joining a union.
   Susan Phillips, UFCW vice president, calls the women's campaign a "direct
way to bring an economic message both to consumers and workers in the
stores." That way, "shoppers will make informed choices about whether they
want to support that kind of discrimination."
   For most women, working at Wal-Mart offers a dead-end job that barely
covers the necessities of life. On average, a "sales associate" earns
$6.10 an hour, or $13,688 annually if she works full time. Not
surprisingly, many Wal- Mart workers live below the poverty level, use
county pulic health services and -- at least half of them -- qualify for
the federal food-stamp program. In other words, taxpayers subsidize
Wal-Mart's profits by paying for the federal, state and county assistance
that Wal Mart's workers require to survive.
   Women are not the only workers who are underpaid. Men are, too. With any
luck, the growing battle against sex discrimination and for union
representation will force the giant retailer to grasp that womens' and
workers' rights, are, in the new millennium, called human rights.

   E-mail Ruth Rosen at rrosen@sfchronicle.com.

Mishandling check costs Wal-Mart $130,000

By Bill Estep

27 June 2003
The Lexington Herald Leader

Problems with the handling of a $34 check resulted in a lawsuit verdict
of $130,000 against a Wal-Mart store yesterday.

A federal jury in London awarded the money to Mary Waddle of Pulaski
County to compensate her for emotional distress and other damages she
suffered because of problems that started after her check to the
Wal-Mart store in Somerset was returned, said her attorney, Thomas
Carroll of Monticello.

Carroll said Waddle, a pharmacy technician at the Wal-Mart, wrote the
check to the store in September 2000. The store's bank incorrectly
stamped the draft with the notation that Waddle had no account and
returned the check, her attorney said.

Waddle did have an account and showed Wal-Mart that the check had been
returned in error. The store ran the check back through and got paid,
Carroll said.

However, Wal-Mart had reported the returned check to database services
that keep track of bad checks as a resource for businesses. A year
later, another business refused to take a check from Waddle, showing
that Wal-Mart had not rescinded or corrected its report, Carroll said.

Waddle spoke to Wal-Mart managers about correcting the database. But
managers later testified that once a check was paid, the store had no
way to get into the system and correct mistakes, Carroll said.

Waddle sued the store under the federal fair credit reporting act. The
store has an obligation to be as accurate as possible, Carroll said.

Waddle had never bounced a check, Carroll said, and she suffered
emotional distress that required medical treatment and medication
because of the incident. She took medical leave and has not gone back to
the store.

The jury ruled Wal-Mart had willfully violated the federal law and
awarded Waddle money to cover her emotional distress, injury to her
reputation, lost wages and impairment of her ability to earn money,
Carroll said.

"I think it was a fair verdict," Carroll said.

Wal-Mart's attorney in the case, Jim Roark of Hazard, was not available
for comment on whether the store will appeal.

Management at the Somerset Wal-Mart referred questions to the
Bentonville, Ark., headquarters, but a spokesman was not available


Wal-Mart poised to take on apparel sector

CHICAGO, June 26 (Reuters) - Down the hall from
the office of Wal-Mart Chief Executive Lee Scott, a
poster tacked to the wall reads: "Who is taking our business? Kohl's."

  Not Target Corp. (TGT.N), the second-largest U.S.
discount chain, or Paris-based Carrefour (CARR.PA), the world's
second-biggest retailer, but mid-priced department store chain Kohl's
Corp. (KSS.N) -- a company whose annual revenues are smaller than U.S.
sales taxes paid by Wal-Mart Stores Inc. (WMT.N).

  Wal-Mart, the world's biggest company by revenues,
has always made a point of keeping a close eye on
competitors -- even much smaller ones.

  "They are maniacally focused on the consumer and
the competition," said Michael Collins, a partner with
consulting firm Bain & Co.

   But singling out Kohl's could spell trouble for the
fast-growing department store chain, and it signals a brewing price war
in the U.S. clothing sector, analysts say.

"Wal-Mart indicating that Kohl's is stealing their
business means that they are intent on going after
the apparel retailing market just as they've gone after the food and
drug retailing markets," said Bill Dreher, retail analyst with Deutsche

Dreher rates Kohl's shares "sell," and Wal-Mart's "buy."

Kohl's did not return calls seeking comment.

Wal-Mart has built up an arsenal of name-brand
clothing to compete with Kohl's and other
department stores, many of which are already
struggling with slack demand and diminishing traffic
at shopping malls.

This month, Wal-Mart is rolling out an exclusive line
of low-priced Levi's jeans, and it has a deal with
Carter's for baby and children's clothes. Both are
major brands for Kohl's.

  Wal-Mart said the most expensive pair -- the "plus"-sized denims --
will sell for just under $25. That compares with around $29 for the
lowest priced pair available on Kohl's Web site. Internet stores were
offering Levi's classic 501 blue jeans for as little as $39.95.

  In another ominous sign for the apparel industry,
Wal-Mart is opening two stand-alone clothing stores
in Britain this fall to showcase its George fashion
line, which is already being sold in stores in the
United States and elsewhere. The retailer said it will
study the two stores for at least a year before
deciding whether to open more.


Competing with Wal-Mart is rarely a pleasant
experience because the world's biggest retailer uses its size to exert
pressure on suppliers and buy goods cheaper than most of its competitors

Only a decade after getting into the grocery business through its
supercenters, Wal-Mart is the largest player and has crushed
competitors' profits. Toy retailers and drug stores are also feeling the
pinch as Wal-Mart undercuts them.

Wal-Mart founder Sam Walton offered some advice
to competitors in his autobiography published in 1992, the year he
died: "They need to avoid coming
at us head-on, and do their own thing better than we
do ours," he wrote. "It doesn't make any sense to try
to underprice Wal-Mart on something like toothpaste."

Indeed, Kmart Holding Corp. (KMRT.O) tried to match Wal-Mart's prices
and ended up in bankruptcy
court. It emerged from Chapter 11 protection this
spring and vowed to stick to its pricing strategy of
offering steep discounts on selected items every
week, but not challenging Wal-Mart head-on.

                 COSTCO NEXT

Wal-Mart's strategy relies on building a dominant
market position and using its size to squeeze lower
prices out of suppliers. But that's a tricky proposition
when Wal-Mart isn't the biggest player.

Its Sam's Club warehouse stores trail Costco
Wholesale Corp. (COST.O), and Wal-Mart seems
determined to change that. In a presentation to
analysts this month, Wal-Mart said it was in the
process of "establishing price leadership" at Sam's
-- corporate speak for a renewed price war, analysts

Wal-Mart is turning up the heat even more by
combining Wal-Mart and Sam's buying power on
purchases from suppliers. Buyers for Sam's and
Wal-Mart stores are negotiating deals together for
the first time, a move Wal-Mart thinks will bring down
prices even further.

In one early example of the new team effort, Sam's
Club stores will carry Levi's classic red tag jeans, a
deal worked out as part of Wal-Mart's negotiations
for lower-priced Levi's at its discount stores.

Richard Galanti, Costco's chief financial officer,
declined to comment on whether the company
noticed increased pricing pressure, but said Costco
was up to the challenge.

"We've competed with Sam's and Wal-Mart for 20
years effectively and will continue to do so," he said
in a telephone interview. "We continue to grow our
Thursday, June 26, 2003 (SF Chronicle)

Wal-Mart wars
Ruth Rosen
June 26, 2003
   WOULD YOU LIKE a Wal-Mart "supercenter" store to move into your community?
Think of the low prices and the convenience of one-stop shopping! You just
park once and get whatever you need -- groceries, drugs, plants, toys,
dog food, even eyeglasses.
   Sounds great, doesn't it? So why have nearly 200 communities refused to
allow such big-box stores to enter their lives? Do they know something we
   To find out, I embedded myself in the Wal-Mart wars that have recently
broken out in Contra Costa County. What I learned, in a nutshell, is that
Wal- Mart's nonunion, big-box stores drag down other workers' salaries,
destroy downtown businesses, prevent smart-growth development and increase
traffic congestion. What really surprised me though is that we, the
taxpayers, end up subsidizing Wal-Mart stores by paying for the health and
retirement needs of its workers.
   Wal-Mart has announced its intention to open 40 new supercenter stores --
each the size of four football fields -- in such fast-growing California
suburban areas as Contra Costa County.
   But Contra Costa County has fought back. A year ago, Martinez prevented a
traditional Wal-Mart store from expanding into a supercenter that could
sell groceries. On June 3, the county Board of Supervisors voted to ban
such supercenter stores from unincorporated areas of the county.
   In making its decision, the board cited a study done by the San Diego
County Taxpayers Association (SDCTA), a nonprofit, nonpartisan
organization. It found that an influx of big-box stores into San Diego
would result in an annual decline in wages and benefits between $105
million and $221 million, and an increase of $9 million in public health
costs. SDCTA also estimated that the region would lose pensions and
retirement benefits valued between $89 million and $170 million per year
and that even increased sales and property tax revenues would not cover
the extra costs of necessary public services. "Good jobs, good pay, and
good benefits should be the goal of an economy," SDCTA concluded, "and
supercenters are not consistent with that objective."
   Wal-Mart, as is its custom, has launched a counterattack against Contra
Costa's ordinance. The company parachuted in platoons of
signature-gatherers who are stationed outside discount stores and asking
shoppers to sign a petition that would place the board's decision on a
ballot. If they collect 27, 000 legitimate signatures, Wal-Mart could
reverse the board's ban.
   In response, a coalition of community groups have mobilized to defeat Wal-
Mart's counterattack. But they face a formidable enemy. Over the last 40
   Wal-Mart has grown into the nation's biggest employer and the world's
largest retailer. Every two days, Wal-Mart opens another superstore. It
has more people in uniform than the U.S. Army. Last year, it banked about
$7 billion in profits.
   The troops fighting Wal-Mart's invasion of Contra Costa County include the
Gray Panthers, small businesses, dozens of churches, the National
Organization for Women, and environmental and smart-growth activists.
Young people, recruited by the Association of Community Organizations for
Reform Now (ACORN),
   fan out daily to discount stores and try to convince shoppers not to sign
Wal- Mart's petition. They even carry cards that allow voters to withdraw
their signature if they have already signed the petition.
   The generals in charge of this community resistance are union leaders.
John Dalrymple, director of the Contra Costa Central Labor Council, admits
they face an uphill battle. The giant retailer is infamous for its
take-no- prisoners, anti-union policies. Wal-Mart's ability to offer such
low prices, as any union member will tell you, has been achieved by paying
its workers -- or "sales associates" -- low wages, offering unaffordable
health coverage and no retirement benefits and importing most of its
products from developing countries, some of which use child and prison
   The United Food and Commercial Workers (UFCW) Local 1179, located in
Martinez, is headquarters for the war against Wal-Mart. Barbara Carpenter,
the union's president, comes from a family whose members have worked for
decades at retail companies that provided decent wages, affordable health
benefits and pension plans. "It's about saving the American dream," she
told me.
   Wal-Mart, she points out, lowers wages among working families and crushes
family businesses. "It not only pays workers less than most of its retail
competitors, two-thirds of workers don't have health-care coverage -- a
cost taxpayers are picking up across the country."
   Did she say taxpayers? That's right. We, the customers, get such low
prices and convenient shopping because we, the taxpayers, subsidize
Wal-Mart profits by paying for county public health services, food stamps
and social services for its retired employees.
   So should you shop at Wal-Mart? To make up your mind, consider this: If
you earn a livable wage or are protected by a union, you can probably buy
all your monthly needs at Wal-Mart. But that's because the average
Wal-Mart employee, who earns about $15,000 a year, cannot do the same.
   Convenience and cheap prices, it turns out, come with hidden costs.
   E-mail Ruth Rosen at rrosen@sfchronicle.com

Monday, June 23, 2003
Wal-Mart at critical juncture
Sex bias plaintiffs seek class status.

By Sue Reisinger

Lawyers for Wal-Mart Stores Inc. and a group of women employees are
engaged in a courtroom fight that, if the employees win the upcoming
round, could result in the largest sex discrimination suit ever.

If certified as a class action, the case would include 1.5 million
Wal-Mart employees and could theoretically result in compensatory and
punitive damages totaling hundreds of billions of dollars, according to
lawyers on both sides.

"No court has ever certified such a class," Wal-Mart said in a 60-page
brief filed on June 12 in U.S. district court in San Francisco. "If this
court were to certify anything like the requested class it will be in
uncharted waters, going where no court has ever gone."

U.S. District Judge Martin J. Jenkins will hold a hearing and is
expected to rule on the certification issue on July 25.

Seven California women—who all worked at Wal-Mart stores in
California—claim in a 2001 suit that Wal-Mart, including its Sam's
Club division, systematically discriminates against its female employees
by denying them promotions, access to training and equal pay. The lead
plaintiff is Betty Dukes, who worked part time, then full time as a
cashier in Wal-Mart's Pittsburg, Calif., store and then was promoted to
customer service manager in 1997. She claims Wal-Mart discriminated
against her by passing her over for promotion and then demoted her when
she complained. Dukes v. Wal-Mart Stores Inc., No. C-01-2252 MJJ.

Wal-Mart is asking that if Jenkins grants certification he immediately
allow an appeal to the 9th U.S. Circuit Court of Appeals.

Wal-Mart is the world's largest business, with 3,244 U.S. stores, more
than $230 billion in annual revenue and 1.3 million employees. The suit
could affect not only wages in the retail industry but also the entire
U.S. economy, according to lead plaintiffs' counsel, Brad Seligman.

Seligman said his studies found that "the patterns of discrimination at
Wal-Mart are remarkably uniform throughout the country—urban and
rural, the deep South and North, every one of 45 regions of Wal-Mart, in
every state." Seligman is executive director of the Impact Fund, a
nonprofit group in Berkeley, Calif., that supports litigation on civil
and human rights, the environment and poverty.

The plaintiffs' studies claim that some 70% of Wal-Mart's hourly
employees are female but women hold fewer than 33% of store management
jobs, and fewer than 15% of store manager positions. Women make up an
average of 56% of management positions at Wal-Mart's main competitors,
the plaintiffs contend.

Wal-Mart's lead counsel, Nancy L. Abell, a partner in the Los Angeles
office of Paul, Hastings, Janofsky & Walker, did not return repeated
messages, nor would Wal-Mart's legal department comment.

Mona Williams, vice president of corporate communications, said from
company headquarters in Bentonville, Ark., "Our company prohibits
discrimination of any kind. While there may be isolated instances of
unfairness in any large organization, there is no basis for finding
systemwide discrimination at Wal-Mart."

More than 100 other women workers from 34 states have added their
declarations of alleged discrimination to the plaintiffs' pleadings. The
court has accepted complaints from former employees going back to Dec.
26, 1998.

Williams said that for every plaintiff's claim, she could furnish a
female Wal-Mart employee to say the company treats women fairly.

Commonality is key

Federal courts have long held that a motion for class certification
should not involve examination of the merits of the case, most recently
in a decision by the 2d Circuit in Caridad v. Metro-North Commuter R.R.,
191 F.3d 283 (1999). In the Caridad case, which involved allegations of
sex and race discrimination, the court reaffirmed that plaintiffs
seeking class certification must meet each of the requirements of
Federal Rule 23—the three so-called "nexus" requirements of
commonality, typicality and adequacy in Rule 23(a) and the requirement
of manageability under Rule 23(b).

Most of Wal-Mart's brief addresses those four requirements. It argues
that the suit lacks commonality because the class of plaintiffs is too
broad and diverse: Most of the plaintiffs are, or were, hourly employees
who worked at different jobs, at different stores and under different
managers. It also says the potential class of employees presents
different issues as to why they felt discriminated against.

The brief states that Wal-Mart is really nine different businesses
ranging from supercenters to neighborhood markets, with different
management structures and diverse pay plans. It says none of the seven
plaintiffs, for example, worked in the grocery division, listed as one
of the nine separate businesses.

Wal-Mart also claims there is no typicality because there is no
"typical" class representative who shares a common experience with all
members of the class. It then argues there is no adequacy because in
some cases female supervisors were both the victims and the perpetrators
of alleged discrimination.   

And the Wal-Mart brief claims numerous manageability problems,
especially in determining damages: "Plaintiffs here ask for back pay for
1.5 million people. Such an undertaking cannot possibly be manageable."
It adds that a demand for punitive damages presents similar
manageability problems and would require examination of each
individual's case.

On the other side, the plaintiffs argue that there are questions of law
and fact involving Wal-Mart's policies and practices common throughout
the company's stores, and that these practices cause women at Wal-Mart
to be paid less and to be promoted less often than similarly situated
male employees.

The 'same' interests

The seven plaintiffs claim they adequately represent the class because
their interests and the interests of the class are the same—proving
the existence of Wal-Mart's general practice of gender discrimination in
compensation and promotion. And, they argue, typicality is satisfied
where the plaintiffs have suffered from the defendant's general policy
of discrimination in compensation and promotions.

The plaintiffs also argue that class treatment is manageable and
superior to other methods of litigation because, "it would be far more
costly for each individual female employee of Wal-Mart separately to
seek discovery of Wal-Mart's policies, obtain data concerning personnel
decisions, and have a multitude of different experts analyze such data
for each individual case. Moreover, separate lawsuits would require
analysis of the same evidence by a multitude of courts and juries."

With commonality such a key issue, Wal-Mart went on to claim in its
brief that its store managers are autonomous, and that its own
statistical analysis concludes that in four of the stores where
plaintiffs worked, women succeeded at a higher, not lower, rate than men
in comparable positions.

But, Seligman said, Wal-Mart's own data show that there is commonality
and grounds for class certification. He said the data reveal that women
in every major job category at stores across the country have been paid
less than men with the same seniority in every year since 1997, even
though the female employees, on average, have higher performance ratings
and less turnover than men.

"The judge doesn't have to decide which statistical model is correct,
only that there is a question about statistics that justifies class
certification," Seligman said.

Wal-Mart's defense that every store is autonomous "is so beyond what
everyone knows about Wal-Mart that it is incredible....Wal-Mart is
uniquely centralized. It is fanatic about control of the stores—from
the thermostat of every single store, to the music it plays, to its
inventory and employee records," he said.

While corporate defense attorney Heather Gatley said the factual claims
should deeply concern Wal-Mart's counsel, she predicted that the
plaintiffs will have an uphill battle in getting the case certified as a
class action.

"Decisions were made by different managers in different locations,"
said Gatley, vice chairwoman of the labor and employment practice at
Miami's Steel Hector & Davis, who is not involved in this case. "There
is a huge time period, multiple kinds of claims and a huge geographic
area. If I were a judge, I would not certify this case." She predicted
that any decision to certify would be overturned on appeal, especially
in the current political climate that has Congress looking at ways to
restrict class actions.

But another attorney, also not involved in the litigation, said numbers
and geography alone don't preclude a class action.

Judson Miner, a plaintiffs' attorney with Chicago's Miner, Barnhill &
Galland, said, "The fact that decisions impact each person differently
doesn't matter. The key is common issues. Does the policy permeate the
system? Is there evidence to link the stores together?"

Besides the suit's charges, Wal-Mart is also battling its own
reputation as a somewhat ruthless employer and litigator. For example,
since 1994, the U.S. Equal Employment Opportunity Commission has filed
16 suits against Wal-Mart for violating the Americans With Disabilities
Act—the most against any U.S. company, according to a spokesman.

The EEOC would not disclose if it has any sex discrimination complaints
pending against Wal-Mart. An EEOC spokesman said the agency granted the
California plaintiffs the right to sue Wal-Mart shortly after they filed
an EEOC complaint. Attorneys said it is not unusual for plaintiffs with
a strong case to proceed in court before any EEOC investigation.

Win or lose in court, many observers believe that the plaintiffs' suit
could forever change how Wal-Mart deals with its female employees.

But Seligman wants to ensure that change. "The single most important
thing is winning class certification," Seligman said. "It's either seven
women or 1.5 million women. If it's seven, then that is nothing to

Wal-Mart collects ink for county referendum

By Sandy Kleffman
24 June 2003

Wal-Mart has begun gathering signatures in the hope of overturning a
Contra Costa County ordinance barring super-size retail centers from
opening full-service grocery stores in unincorporated areas.

The firm will spend about $100,000 trying to qualify a referendum for
the ballot, said Wal-Mart community affairs manager Amy Halley Hill.

"It's a matter of principle," she said. "These types of ordinances are
anti-competitive and anti-consumer and we will fight them tooth and

The dispute mirrors battles throughout the country over retail giants.

Supporters like the bargain prices and convenience. Opponents counter
that those benefits often come at the expense of smaller retailers and
employees who receive low wages.

"They just shouldn't have a super center that's the size of 15 football
fields," said Liz Perlman, an organizer for the East Bay Alliance for a
Sustainable Economy, which opposes the Wal-Mart petition drive.

County supervisors approved an ordinance June 3 that applies only to
retailers with stores in excess of 90,000 square feet in unincorporated
portions of the county.

It bans such super centers from devoting more than 5 percent of their
floor space to the sale of nontaxable items such as groceries.

The measure, similar to restrictions approved by Martinez, won strong
backing from labor unions and social-justice groups.

But Wal-Mart and other opponents accused county supervisors of being
discriminatory, harming consumers and interfering with the free market.

Wal-Mart must turn in 26,487 valid signatures by July 3 to qualify a

County supervisors would then have the option of repealing the
ordinance or placing it on the ballot, probably for the March 2004

Supervisors John Gioia and Mark DeSaulnier said Monday they believe the
board would place it on the ballot if the petition drive qualifies.

"I think we'll fight them very vigorously," DeSaulnier said. "I think
when people in Contra Costa hear the whole story, they won't be terribly

DeSaulnier predicted that grocery chains and labor unions would
campaign to uphold the ordinance.

Wal-Mart hired National Petition Management, a Sacramento company, to
gather the signatures.

On Sunday, Gioia went to Wal-Marts in Martinez, Pittsburg and Antioch
to listen to what the petition circulators are saying.

Some gathered signatures for or against a recall of Gov. Gray Davis at
the same time they circulated the Wal-Mart petitions, he said.

He added that several people gave out wrong information by stating that
the ordinance applies countywide or would ban existing Wal-Marts from
selling groceries.

Instead, the ordinance applies only to areas that lie outside city
limits and thus are governed by the county. It would not apply to
existing stores within city boundaries.

"They're being a bit loose with the facts," Gioia said. "It's clear
that people signing the petitions are not being told the full and
accurate story."

EBASE and ACORN, community groups that support the ordinance, have been
monitoring the petition drive and setting up their own information
tables alongside the signature-gatherers.

"We've been representing our side of the story," Perlman said. "They've
got these paid signature-gatherers from out of town. They're basically

Although Wal-Mart has no plan to open a store in unincorporated Contra
Costa, the company wants to keep its options open, Hill said.

She noted that in Nevada's Clark County, commissioners repealed a
similar ordinance after Wal-Mart qualified a referendum.

"We would never enter into this unless we believed there was a real
opportunity for us to be successful on the ballot."

Wal-Mart Supercenters spread across Wisconsin
11:58 PM 6/22/03
Marv Balousek Wisconsin State Journal

RICHLAND CENTER - Bev Fink, who has run Ed's Family Foods with her
husband, Ed, for 15 years, said she wasn't prepared for the volume of
business they lost when the Wal-Mart Supercenter opened in Richland
Center several years ago.

"We were really surprised at how much we did drop," she said, adding
that a comfortable living turned into a struggle for survival.
Promotions, discounts and home delivery for the elderly have since kept
Ed's open, she said.

Supercenters with groceries, pharmacies, vision centers and sometimes
gas stations represent Wal-Mart's second wave. Supercenters have opened
this year in Delavan, Green Bay, Manitowoc, Oshkosh and Wausau. Another
Wal-Mart Supercenter will open soon in Portage. More are planned in
places that include Jefferson, La Crosse, Neenah-Menasha - and Stoughton in Dane

Wal-Mart has an option to buy property just outside Stoughton, but the
company hasn't yet filed any papers to move the project forward.

If the company does move ahead, it could face a lot of local
opposition.  Stoughton Mayor Helen Johnson said Sunday that the City
Council will look at a moratorium on the development of "big-box stores"
in the next few weeks.

Johnson, who is opposed to a Supercenter, said the city wants time to
write ordinances that would require impact studies by developers who
want to bring big stores to the city. She worries most about the non-economi mpacts of a Superstore, including how it might change the atmosphere of the
city of roughly 12,000. 

"People have concerns about small businesses, but we can't legislate
competition," she said. "My biggest concern is traffic and storm-water

Johnson said she and city planner Rodney Scheel will meet this week
with Wal-Mart officials to plan a public meeting on the proposal.

A group called Uff Da Wal-Mart has formed to oppose the project.

Nationwide, the company plans to open more than 200 Supercenter stores
during its current fiscal year.

Critics say the first wave of smaller Wal-Mart stores that sprouted
across America during the 1980s and early 1990s drove smaller hardware
and clothing stores out of business. They fear Supercenters will be the same death
knell for local grocery stores and pharmacies.

A 1999 impact study of a proposed Wal-Mart Supercenter in a Virginia
community by economist Thomas Muller estimated the store would increase
community property values by $3.5 million, while threatening the
property of competitors worth $8 million to $10 million. He said the
store would create about 246 mostly part-time jobs while threatening 248 jobs, many full time, at other businesses.

With nearly a million employees, Wal-Mart is the nation's largest
private employer. It's also Wisconsin's largest employer with 21,271
workers, according to the Wisconsin Chamber of Commerce Foundation and the

During the fiscal year ending in January 2002, the company spent about
$918 million with in-state suppliers, paid $23 million in state and
local taxes and accounted for $128 million in sales taxes, according to company

John Bisio, Wal-Mart regional community affairs manager, said the
company has no master strategy of where it will open Supercenters.
Instead, he said, store locations are based on point-of-sales data that map where the customers are - when a store is serving too many customers, it's time to
build another one.

Proposed Supercenters have aroused vocal opposition in communities like
Stoughton, Jefferson and Viroqua, where a Supercenter is operating.
Zoning restrictions and the city's master plan kept a Supercenter out of
Fort Atkinson. But Bisio said the company faces opposition in a minority
of its target locations.

"Even where there's outspoken opposition, we've found there's a pretty
significant number of folks - the silent majority - that does recognize
the merits of the project," he said. "I think some of this reserve is
good. I think people want to be sure they have certain guidelines in

Bisio, who's based in Indianapolis but plans to visit southern
Wisconsin this week to work on the Stoughton project, said Wal-Mart
stores bring many more customers to towns, which benefits other merchants.

"Instead of predicted bankruptcies and foreclosures, Wal-Mart has had a
very positive effect on communities," he said. "It helps a community
become more of a hub for retail and services."

That's not much comfort to Linda Peterson, who runs Trappings, a gift
and clothing store in downtown Richland Center. Peterson said she's
careful about the books she carries because Wal-Mart sells some of them
for less than she can, despite the discounts she gets from suppliers.

Janet Neefe of The Clothes Horse said she's able to compete with
Wal-Mart by offering a different quality of clothing.

Before the smaller Wal-Mart store opened, Richland Center had downtown
hardware, discount general merchandise and small department stores.
Those have been replaced with specialty shops like Trappings or The Clothes

"I don't think it does a small town any good," Neefe said of Wal-Mart.

- Matt Hagengruber contributed to this report.


Can $250 Billion Wal-Mart Think Small?
Sat June 21, 2003 05:11 PM ET
By Emily Kaiser
BENTONVILLE, Ark. (Reuters) - From its nondescript headquarters in a
remote corner of Arkansas, Wal-Mart Stores Inc. WMT.N decides whether to
buy T-shirts made in Guatemala or Guangdong Province, and if stylish
clothes from its British stores will sell in Brazil.

Love or loathe it, Wal-Mart is the world's biggest company by revenues,
and the decisions made in Bentonville affect economies on five
continents and dictate prices at other discounters, department stores
and grocery chains.

Economists say Wal-Mart single-handedly lowers U.S. inflation by
driving down prices at its stores. The company says it raises the
standard of living by saving customers billions of dollars that they can
spend elsewhere.

"They are the driving force behind what is a natural economic rule --
which is, over time, the price of goods and services come down," said
Michael Collins, a partner with consulting firm Bain & Co.

Wal-Mart's strategy is simple: buy and sell goods cheaper than the
competition. Unlike most retailers, it doesn't run sales, instead
promising its lowest price at all times.

Its stores do so much business that the register tape for one day's
sales would stretch 2,670 miles -- or almost from New York to Los
Angeles. More than 130 million customers worldwide visit a Wal-Mart
store each week.

Wal-Mart accounts for roughly 9 cents out of every retail dollar spent
in the United States, excluding autos. The U.S. Federal Reserve phones
Wal-Mart executives to check up on sales as a gauge of the nation's
economic health.

But critics contend Wal-Mart squeezes its suppliers so hard that they
can't afford to pay workers a living wage, and its anti-union stance
makes it a top target for labor groups.

Wal-Mart faces dozens of U.S. lawsuits, alleging that the world's
largest private-sector employer forces people to work unpaid overtime
and discriminates against women.

Its massive supercenters -- some the size of four football fields --
have drawn fire from environmental groups and anti-sprawl activists who
say the stores contribute to flooding and gobble up green space.


Analysts estimate Wal-Mart's sales could top $600 billion by 2011, and
some say $1 trillion is not out of the question. For its fiscal year
that ended in January 2003, sales were $244.5 billion, three times its
nearest competitor's.

But size may prove to be Wal-Mart's Achilles heel. Founder Sam Walton
worried about his company becoming so large it could no longer function

"The folks who come after me are eventually going to have to face up to
this question. Even by thinking small, can a $100 billion retailer
really function as efficiently and productively as it should? Or would
maybe five $20 billion companies work better?" Walton wrote in his
autobiography, published in 1992, the year he died.

Jay Allen, a Wal-Mart spokesman, said it's hard to know what Walton
really meant when he wrote that, but the idea of thinking small is still
alive and well in Bentonville.

"He left that on the culture. The leadership and people who are
successful here still focus on what needs to be better today," Allen

Wal-Mart executives regularly quote from Mr. Sam's -- as they still
refer to him -- book, and his philosophies remain an integral part of
the corporate culture: the customer always comes first, treat your
people well, think small, drive down costs.


So far, Wal-Mart has proved it can manage its massive operations from

All of Wal-Mart's U.S. regional managers are based in Bentonville, but
every Monday, they board one of Wal-Mart's 27 airplanes and head out to
visit stores -- something Sam Walton, a pilot, used to do regularly.

The managers return to headquarters for a 7 a.m. Thursday sales meeting
in a conference room with a dozen chest-high tables and no chairs.
Removing the chairs -- an idea Wal-Mart picked up from its British Asda
division -- cut meeting times in half because no one got too

Every Saturday morning at 7:30, managers review the week's performance
and go over any new products or marketing ideas that could affect sales.
Stores implement changes over the weekend, when most other company
headquarters are closed.

But there are indications that the personal touch of Sam Walton's age
is fading as Wal-Mart's reach extends around the globe, with stores in
10 countries and suppliers in many more.

The discrimination lawsuits and tales of union-busting and poor working
conditions all tarnish the founder's image of small-town, good Christian

Ironically, the company that prides itself on good values has angered
religious investors over what they consider to be poor treatment of
employees and those who work in its suppliers' factories.

The Rev. David Schilling, director of global corporate accountability
for religious investors group International Council on Corporate
Responsibility, said Wal-Mart has a responsibility to be a good
corporate citizen, and that means treating its people better.

Nitin Nohria, a professor at Harvard Business School and author of a
recent book on successful management methods, said the company still
reflects Sam's values -- for now.

"As we go through multiple generations, CEOs who had no contact with
Sam, then this much power in the hands of someone who doesn't share in
the values of the company can be a problem," he said.


Protesters Rally Outside Wal-Mart
by Aruna Jain
Staff Writer

June 19, 2003
A coalition of community and labor activists gathered near the Wal-Mart
in Bowie Thursday afternoon to protest what they assert is the
retailer's anti-union policies, low wages and poor employee benefits.

Members of United Food and Commercial Workers Local 400, who are not
employees of Wal-Mart, but who represent 40,000 workers in the
mid-Atlantic region, organized the protest to urge Wal-Mart to agree to
collective bargaining. Local 400 president Jim Lowthers said that
Wal-Mart is a poor corporate citizen as opposed to what it portrays in
its marketing efforts.

"They discriminate against women in promotional opportunities,
two-thirds of their employees don't have health insurance and
[employees'] wages are so low that they can't really raise families,"
Lowthers said. Lowthers also said that Wal-Mart has anti-union

The management of Wal-Mart at Bowie declined to comment on the
protesters, however its Web site addresses the issue of unions:
"…Because we believe in maintaining an environment of open
communications, we do not believe there is a need for third-party

County councilmen Thomas R. Hendershot (D-Dist. 3) of New Carrollton
and Douglas J.J. Peters (D-Dist. 4) of Bowie were also present.
Councilman Peters told protesters that the Prince George's had a
pro-union county council.

"We ask Wal-Mart to respect our county and respect our laws and respect
the right for employees to organize," Peters said.

After the speeches, many of the protesters wearing anti-Wal-Mart
T-shirts separated into groups of two or three and walked into Wal-Mart.

Publicly held Wal-Mart has topped Fortune 500 list and is the largest
retailer in the world. The company's recorded sales of $244.5 billion
for the fiscal year ended January 31, 2003

Wal-Mart Loses Appeal In Drug Death

Story by The Associated Press  Posted 6/19/2003

Wal-Mart Stores Incorporated has lost its appeal of a 1.27 million
dollar jury award to a Texas woman whose husband died after a Wal-Mart
pharmacist gave him the wrong prescription medicine.

On Thursday, the Arkansas Supreme Court rejected the argument of the
world's largest retailer and pharmacist Russell White that there was
insufficient evidence as to the cause of John Tucker's death.

The company argued that the awards to Tucker's widow and daughter were

Tucker died September 4, 1997, after being given the medication Ziac, a
high blood-pressure medication. But the medicine was in a prescription
bottle labeled for Zaroxolyn, a diuretic. The prescription was filled at
a Wal-Mart pharmacy in De Queen.

Court papers say the medication, which Tucker took for two and a half
months, allowed fluid to accumulate in his body and caused severe weight
gain. Doctors said he died of congestive heart failure.

A doctor testified at the trial in Sevier County that the mistake
contributed to Tucker's death.


Who decides what's morally correct in this country today? It's not the pope or the president.  Would you believe it's Wal-Mart?

Commentary by Bill Press
June 18, 2003

Yes, the world's largest retailer - with more than 1 million employees
and more than 3,400 stores nationwide - has set itself up as the
country's new culture cop. From now on, Wal-Mart will decide what's good
for us and what's not.

Last month, in response to complaints from religious conservative
customers, Wal-Mart pulled from its shelves three men's magazines -
Maxim, Stuff and FHM. This week, after more complaints, it announced it
would shield the covers of four women's magazines sold in checkout

Now, to be honest, I've never seen the banned men's magazines. Not my
style. If they are, indeed, pornographic, then no problem; ban them. But
the four women's magazines are about as far from pornography as The Cat
in the Hat. Redbook, Cosmopolitan, Marie Claire and Glamour are four of
the oldest, best and most popular women's magazines on the market. Sure,
each has spruced up its image recently to appeal to younger women, but
they are far from what anybody could define as obscene.

This month's cover of Glamour, for example, features a fully dressed
country music superstar Faith Hill, surrounded by blaring headlines:
"Great Summer Hair, Skin & Body"; "She's 22 With One Month to Live"; and
"15 Sexiest Things Women Do Without Knowing it." Surely, any
self-respecting woman could spot those headlines in a checkout line
without feeling the need to rip off her clothes and suddenly attack the
nearest salesman.

Or check out the latest Redbook. It prides itself on offering stories
about "Real Life for Real Women" in three categories: family; love and
relating; and health and well-being. And these are the magazines some
women say they can't even cast their eyes on without being offended?

Why is it that some people want this country to look more and more like
what Afghanistan used to be? And who appointed Wal-Mart the new American

Obviously, as a business, Wal-Mart has a right to sell, or not sell,
whatever product it wants. My father used to operate his own gas
station. He had the right to sell Exxon, or Texaco, or no gas at all.
But to let a handful of supersensitive religious zealots dictate what
all Americans can buy at Wal-Mart, or any other store, is dangerous.

For starters, who decides what's decent and what's not? Will Wal-Mart
appoint a committee of smut police? If so, how do you qualify? And
what's the definition of indecency? What's indecent in one person's eye
is decent in another's.

As an occasional Wal-Mart shopper, for example, I can't stand the sight
of gun magazines. Seeing men in camouflage with assault weapons on the
cover of some monthly rag offends me deeply because, as a Christian, I
think killing is indecent - a lot more indecent than sex. If I complain
to Wal-Mart, will they ban all gun magazines?

As an environmentalist, I'm also offended by the huge mega-stores
Wal-Mart is trying to force on small communities like Hood River, Ore.,
and Westerly, R.I. If I find bigger stores indecent, will Wal-Mart stop
building them?

Finally, as a fair-minded person, I'm offended that Wal-Mart
consistently pays its women employees less than men - for the same job -
and fails to promote women to managerial positions as often as men.
According to documents filed by women workers against Wal-Mart, the
average salary for male store managers is $105,682; for women managers,
it's only $80,280. Male sales personnel take home an average $16,526;
women, only $15,067. Now, to me, that's really obscene.

Wal-Mart should clean up its own life before trying to clean up ours.

Bill Press is co-host of MSNBC's Buchanan and Press. 

By Mary Starrett

Starting this week, the nation's largest discount
retailer will quietly begin selling tracking-chipped
products to clueless shoppers. The first volley in
their war against our privacy is set to start at their
Brockton, Massachusetts store.

Wal-Mart will put Radio Frequency I.D. sensors on
shelves stocked with RFID-tagged Gillette products,
but they'd rather you didn't know about it, because,
hey, you might not like it, and then you might make
noise and then they'd have a big PR mess on their

You might even stop buying Gillette products or, say,
refuse to shop at Wal-Mart.

These chips, researched at M.I.T.'s Auto-ID Center are
about the size of a grain of sand. Chipsters say the
technology will only be used to help retailers keep
track of inventory - like bar codes. But
privacy-loving consumers question the very concept of
a device that sends out radio waves to "readers" that
not only identify the article, but where and with whom
it's going.

The Big Brother implications of this thing need little
hyping to get your skin crawling.

Wal-Mart's putting the pressure on its top 100
suppliers to make sure their inventory is all chipped
by the end of next year.

But why start this in Brockton, Mass?

Could it be because the store's customers are
typically lower income minorities who'd be less likely
to be aware of the tracking devices, and even less
likely to make a fuss about them?

Their thinking? Let's foist it on folks who're too
concerned about paying the electric bill to be aware
of these types of issues.

Retailers are SUPPOSED to alert their customers to the
tracking chips and offer to "kill" the tags at the
checkout counter.

Don't count on it, because what you don't know won't
hurt you, right? And to PROVE those RFID tags won't be
"killed" at the cash register one of the ways they're
planning on convincing you, the shopper that these
tags are A-OK is by touting how "hassle-free" returns
will be. Huh? If the tags are supposedly turned off at
purchase, how can they be read after the item's
brought back to the store? Just one of the myriad lies
you'll be told about this technology.

Are we to expect that in addition to being asked the
"paper or plastic" question we'll get an option on
whether the RFID tags are left on or turned off? Not
only will consumers be witnessing the death throes of
privacy, but it's going to cost them. Currently, the
chips cost about 60 cents each. Add that to the cost
of each and every item that uses this Orwellian
technology. Gillette and Wal-Mart are only the
pioneers here, the stated plan is to affix each item
produced on the planet with RFID tags. Each pack of
gum, each roll of film, each bottle of Merlot.

So what's a freedom-loving shopper to do?

Fortunately for us, there's a really smart lady
finishing up a Ph.D. at Harvard. She started a group
that's bellowing out the urgency of fighting this
technology; her name is Katherine Albrecht and she's
founder of CASPIAN (Consumers Against Supermarket
Privacy Invasion And Numbering). Albrecht's CASPIAN
has proposed a piece of federal legislation called
"RFID RIGHT TO KNOW ACT OF 2003". It's a law that
would let consumers know which products had tracking
chips attached to them. In short, the proposed bill
would amend the Fair Packaging and Labeling Program by
adding language that requires manufacturers to state
(in a conspicuous location) that the package contains
a radio frequency identification tag that can transmit
unique identification information to a "reader" device
both before and AFTER it's purchased(!).

This is where you come in.

The bill needs a sponsor.

Maybe YOUR Congressional Representative would like to
go on record as having helped stop this assault on our
privacy. Forward this article to him/her and tell them
the entire text of the bill can been seen at

Will you make it a point to email, call or fax your
representative today, before our Big Brother gets any
bigger? Do it NOW before the lobbyists and big money
special interests get to them and convince Congress
these RFID chips are consumer-friendly!

And while you're at it, why not tell the suits at
Wal-Mart and Gillette (and Home Depot, Proctor and
Gamble and Johnson & Johnson, too, by the way) that
from here on out you wouldn't go near their stores or
their products with a ten foot pole.

It works. Remember back a few months when I told you
how Italian clothing company Benetton had chipped
their Sisely line of clothes and was all set to roll
out the garments with RFID tracking devices? Well your
outrage and feedback caused them to put the scheme on

Let's make sure the behemoth Wal-Mart is similarly put
on notice. (By the way, IBM's planning to add RFID to
it's products; so if Wal-Mart manages to sneak this
past us, all bets are off and then every corporate
giant will be able to inflict this chilling,
tracking/monitoring horror on us.)

If RFID gets off the ground as planned, that would
make George Orwells' predictions off by just 20 years.

Wal-Mart claims victory in two union decisions

Retailer will appeal meat-cutting ruling at one Texas store                click on link for story






Company Ordered to Turn Over Information to Union

    When meat cutters at a Jacksonville, Tex., Wal-Mart voted for
United Food and Commercial Workers Local 540 representation, the company
refused to recognize the union-and suddenly changed the job functions of
the meat cutters with a change to case-ready meat. Wal-Mart believed it
had successfully circumvented the UFCW's first victory at one of its
stores-until a National Labor Relations Board Administrative Law Judge
ordered the company to recognize and bargain with Local 540 over the
effects of the change to prepackaged meat. This order comes more than
three years after the original union election.

    "Changing the way all of its stores sell meat shows the extent
to which Wal-Mart will go to keep the union out of its stores," says
UFCW Executive Vice President Mike Leonard. "Anytime management concocts
a scheme to ratchet down people's livelihoods, it says a lot about the
real nature of the company."

    Wal-Mart quickly changed how the Jacksonville store's meat
department operated after the workers voted for Local 540, making the
meat cutters into "sales associates." The sudden switch to case-ready
meat became evidence of the scope of Wal-Mart's anti-union strategy.
Wal-Mart even boasted to its managers in a Powerpoint presentation,
"It's the ultimate union avoidance strategy!" The meat cutters'
specialized skills were devalued once their work assignments were

    "The absence of future wage increases, coupled with the effects
of inflation, constitute a very demonstrable and adverse effect," the
judge concluded. "The elimination of work requiring their special skills
greatly affected both job satisfaction and future earning potential."
    The judge has ordered Wal-Mart to recognize UFCW Local 540 as
the bargaining representative for the meat cutters, and restore the
department to its prior structure. The judge also ordered Wal-Mart to
bargain with Local 540 concerning the effects of the decision to
eliminate meat cutting from the Jacksonville store. Wal-Mart must
provide the information regarding its decision to switch to prepackaged
meats that it withheld from the workers' union at the time of the

    On Tuesday, Local 540 President Johnny Rodriguez formally
requested the start of bargaining with Wal-Mart. Such negotiations would
mark the first time that Wal-Mart and the union would sit at the
bargaining table.

    "This is a historic decision - the first bargaining order issued
against Wal-Mart in the United States," explains Leonard. "It is a
victory for all Wal-Mart workers who are fighting for a voice at work."

    The meat cutters in Jacksonville became the first group of
workers to vote for union representation at Wal-Mart in February, 2000.
Just one month later-during a separate NLRB hearing on a union election
at a meat department in Palestine, Tex.-Wal-Mart announced it had
decided to replace freshly cut meat with case-ready meat-eliminating the
need for meat cutters in every one of its stores. Wal-Mart has
repeatedly stated that it will not bargain with any union, and has taken
steps to prevent workers from organizing in stores across North


Who Benefits When Wal-Mart Comes To Town?

While the consumer can benefit from the competitive pricing,
particularly in markets where the power retailers are competing head to
head, what about the bigger picture? As the manufacturing base in Maine
erodes, so is our retail infrastructure. In the communities with less
than 10,000 population in particular, which represent the vast majority
of Maine towns, we can witness the deterioration of the central business
districts and we can generally find an increasing number of vacancies,
even in the more modern shopping centers. Main Street has been suffering
for some time, but now the strip malls are faced with similar problems.
Why??? We believe the power retailers are playing a significant role.

The corporate retailer that has the greatest presence in Maine at this
time is Wal-Mart. Wal-Mart with 20 stores, was the first "Big Box" power
retailer to enter the state with multiple stores, most being built
between 1992 and 1995. Recently, three stores have been converted to
"super stores" offering a much broader assortment of goods and products
including groceries, and it seems conversions of other stores are being
announced almost daily. Because this retail giant has been operating in
Maine for many years, now it is possible to examine the retail history
in each community to determine if they have brought retail prosperity
with them.

Two of the 20 communities, Oxford and Palmyra, do not report at the
store type level (building supply, food stores, general merchandise,
other retail, automotive sales and restaurant/lodging). However, Newport
shares the same shopping area with the Palmyra Wal-Mart and so we have
included Newport in our study. We analyzed "restaurant" sales in the
communities where they are reported, but we did not analyze the combined
category of "restaurant/lodging". Let's begin this Wal-Mart Study with a
few facts.

    * Ten of the nineteen communities have a population less than

    * 9 of the 10 and 14 of the 19 have a median household income below
the state average.

    * Biddeford, Sanford & Windham, all communities with more than
10,000 population, had per capita retail sales less than the state
average in 1994. Biddeford and Sanford continued to have per capita
retail sales below the state average in 1998.

One of the best ways to identify retail trends is by analyzing the
"pull factor" change between two periods. A "pull factor" is calculated
by dividing a community's per capita sales (retails sales divided by the
population) by the state average per capita sales. If the result is 1.00
or more, then we know more than the average volume of sales is being
"pulled" into the community. By way of example, the Skowhegan 1994 per
capita sales in "Consumer Retail" (taxable sales to consumers) was
$10,390 while the state average was $7,163. The pull factor for
Skowhegan of 1.4505 is calculated by dividing $10,390 by $7,163. The
1998 Skowhegan per capita was $11,840 while that for the state was
$8,634. The indicated Skowhegan pull factor for 1998 is 1.3713
($11,840/$8,634). Comparing the 1994 pull factor of 1.4505 to the 1998
pull factor of 1.3713 indicates that less retail business was being
"pulled" into Skowhegan in 1998 than in 1994.

We have used this same comparative process to analyze the shifts in
retail activity (pull factor) for each of the 19 communities by store
type with an emphasis on the 10 smaller communities. All goods/products
sold in Wal-Mart are reported in the General Merchandise category but
technically would be reported in Building Supply, Food Store, Other
Retail, Automotive or Restaurant if reported in the store type they are
identified to be in. Furthermore, with the development of more
"supercenters", sales in the other store types likely will be influenced
to an even greater degree. Wal-Mart has been portrayed as a retail
"draw". If this is the case, then it logically follows that the "pull
factor" will increase in all store types.

The following summarizes our conclusions. Remember that we are looking
for an increase in the pull factor. Also keep in mind that the state
average per capita sales is our benchmark at all times. We are only
expecting per capita to increase at a greater rate than the state
average. We acknowledge the trends in each community should be studied
carefully before a shift can be quantified in that market. Restaurant
sales are not reported in all communities.

Communities less than 10,000 population

    * The consumer retail pull factor declined in 7 of the 10 (70%).
    * The building supply pull factor declined in 8 of the 10 (80%).
    * The food store pull factor declined in 6 of 10 (60%).
    * The general merchandise pull factor declined in only 2 of 10
    * The other retail pull factor declined in 7 of 10 (70%).
    * The automotive sales pull factor declined in 6 of 10 (60%).
    * The restaurant pull factor declined in 5 of 6 (83.33%).


   1. The data suggests the arrival of Wal-Mart does not bring retail
prosperity to the smaller communities.
   2. Because of the growth in the general merchandise store type and a
decline in the others, it appears reasonable to conclude that competing
businesses not reporting in the general merchandise category suffer a
loss in sales.
   3. Furthermore, considering the demise of Sears, K-Mart, Bradlees,
Riches, and Ames as anchor tenants in many shopping centers, we know
other stores reporting in the general merchandise category have found it
difficult to compete.

All 19 Wal-Mart Communities

    * The consumer retail pull factor declined in 11 of the 19
    * The building supply pull factor declined in 13 of the 19
    * The food store pull factor declined in 9 of 19 (47.4%).
    * The general merchandise pull factor declined in only 7 of 19
    * The other retail pull factor declined in 12 of 19 (63.2%).
    * The automotive sales pull factor declined in 9 of 19 (47.4%).
    * The restaurant pull factor declined in 7 of 13 (53.8%).


   1. 3 of the 4 communities with populations between 10,000 and 20,000
had a decline in consumer retail sales resulting in 10 of 14 or (71.4%)
of Maine communities with populations of 20,000 or less experiencing a
declining pull factor.

   2. The general merchandise and automotive sales store types
represent approximately 47% of all taxable consumer retail sales in
Maine. Considering Wal-Mart reports in the general merchandise category
and automotive sales are not a major component of their business, the
consumer retail totals would indicate even greater declines with these
store types removed from the analysis.

We believe this study provides compelling evidence that generally
Wal-Mart is not a draw to other retail businesses operating in the same
market. We acknowledge that certain other chain businesses do tend to
follow Wal-Mart and benefit from the traffic volume created by their
presence. Again we ask, "Who benefits when Wal-Mart comes to town?"




By Tom Zoellner, The Arizona Republic
16 May 2003
The Arizona Republic

A top Wal-Mart executive is trying to ease the damage created by a
supposedly bogus campaign memo that sent waves of panic and suspicion
through the Phoenix City Council this week.

"A backroom operation is not the way we deal with public officials,"
said Bob McAdam, the retailer's vice president for state and local
government relations.

He was referring to the "Lloyd memo," an inflammatory three-page
document that details a purportedly secret Wal-Mart plot to get rid of
council members perceived as unfriendly to giant retail stores.

McAdam has been making phone calls from his Bentonville, Ark., office
to council members, assuring them that Wal-Mart had nothing to do with
the memo, or a purported May 1 meeting at the office of an unidentified
person named "Lloyd."

Fiction as it may be, and laden with slang and unflattering depictions
of city politicians, the Lloyd memorandum still sketches an accurate map
of some of the buried tensions among city council members.

The infighting over Phoenix's generally permissive policies toward
megastores is detailed, as is the influence of firefighter and grocery
employee unions. The author is familiar with sly campaign finance
tactics, but misspells the name of top Republican fund-raiser Jack

The Wal-Mart coup d'etat will "change the balance of power in Phoenix,"
the memo predicts, even though neighborhood advocate and big box skeptic
Phil Gordon will "unfortunately be the next mayor."

"With four council votes, we can make Phil do what we need to do," the
memo says. "He will pay less attention to the downtown business types
and unions if we have strong voices pounding on him."

The memo's purported author, veteran Arizona political consultant Chuck
Coughlin, has proclaimed his innocence and filed a report with the
Phoenix police alleging identity theft. He has retained a private
investigator to dust the memo for fingerprints and promised to sue
whoever is responsible.

Coughlin was an aide to former Gov. Fife Symington and is legendary in
Arizona political circles for his hardball tactics and image as a
behind-the-scenes policy player.

Wal-Mart is one of his clients, but he denies any link to the memo. He
says what proves his innocence is his willingness to go to the police
and risk felony charges for filing a false report if he is lying.

A central character in the Lloyd memo is Councilwoman Peggy Neely, who
is aghast at being portrayed as someone willing to dispense damaging
information on her colleagues.

"I am so angry," she said. "If anybody knows Peggy Neely, they know
that Peggy Neely is not a power-hungry manipulator; Peggy Neely is a
consensus builder."

Reach the reporter at (602)444-2474.


Saturday, June 14, 2003

Wal-Mart discrimination probe ends
Commission to hear 2001 case

By DOUG HARLOW, Staff Writer
Blethen Maine Newspapers Inc.
WATERVILLE - An investigator from the Maine Human Rights Commission
has found reasonable grounds to believe that employees at the Wal-Mart
store on Kennedy Memorial Drive unlawfully discriminated against two
black shoppers Sept. 14, 2001.

Store officials contend in the commission report that employees simply
were being cautious in the days following the Sept. 11 terrorist attacks
when they allegedly asked police to remove the men from the premises.

The plaintiffs say they are hunters from New York and bear no
resemblance to terrorists.

The case is scheduled for action by the full commission June 23 in
Augusta. A finding in favor of the two men would result in a hearing
with the commission's conciliation officer to work out an agreement
between the parties and possibly cash damages.

In their complaint, Douglas Banks and Anthony Thomas allege they were
ordered off Wal-Mart property because of their race. Store employees
called Waterville police just before 2:15 p.m. that day with a request
to have officers remove the men from the store and parking lot,
according to the findings.

Wal-Mart officials through legal counsel insist they did not know who
was in a vehicle that had been parked for two hours outside the main
door. They said they did not ask anyone to leave, but simply requested
police to move the men to the lower end of the parking lot.

Investigator Susan Clark describes a different scenario in her report.

"The police report states that the officer understood he was to ask the
men to 'Leave at Wal-Mart's request,'" she wrote.

A copy of that day's incident log at the Waterville Police Department
says "... at Wal-Mart's request, they were asked to leave," Police Chief
John Morris said Friday.

Employees also recorded the vehicle's license plate number and
allegedly had been watching the men come and go from the store.

Banks and Thomas were in Maine that week staying at a hunting lodge
near Waterville, according to the commission report. One of the men
already had shot a bear.

They took the day off from hunting Sept. 14 because Banks wanted to
make some telephone calls from a pay phone at Wal-Mart. The men also
planned to eat at the snack bar and do some shopping, according to the

They parked in a spot near the store entrance.

"Mr. Banks had learned that (he) needed to call someone back in an
hour," according to Clark's report. "They had an hour to kill so they
used the rest room, then bought some food at the snack bar and took it
back out to Mr. Banks' truck to eat so they could listen to the radio to
get the latest news on the aftermath of the Sept. 11 terrorist attack."

Later, with Thomas now alone in the truck, a police cruiser pulled up
and an officer told him that store management said they were "hanging
around" and wanted them to leave.

Thomas told the officer he thought it was "racist nonsense" on the part
of Wal-Mart. Banks, angry and insulted, returned the merchandise he had
purchased and the pair left.

Wal-Mart officials said they had been directed by the corporate office
to be on the lookout for any suspicious activity and that the move
against Thomas and Banks was justified because of the "heightened
sensitivity to unusual behavior" in the wake of the terrorist attacks.

"Thomas replied that when Tim McVeigh blew up the federal building in
Oklahoma, stores did not become extra cautious about white men,"
according to the investigation report. "He and Mr. Banks are
'Middle-aged black men; we do not look like Middle Easterners.' "

Clark's investigation concluded that Wal-Mart employees knew the men
were black and had violated federal law by removing them from a place of
public accommodations.

Sharon Weber, a Wal-Mart spokeswoman at corporate headquarters in
Bentonville, Ark., said the allegation flies in the face of company

"We're still reviewing the findings of the commission and we don't
condone discrimination of any kind," Weber said. "One of the founding
principles of our company is respect for the individual."

Doug Harlow

Wal-Mart Wages Don't Support Wal-Mart Workers

By Stan Cox, AlterNet
June 10, 2003

On June 6, Wal-Mart's shareholders converged on Fayetteville, Arkansas
for their annual meeting. According to Arkansas Business Online, "The
famously colorful event often takes on the feeling of a high school pep
rally, as shareholders and company executives perform the 'Wal-Mart
And why shouldn't they cheer? Their company chalked up a record $56.7
billion worth of sales in the first quarter of 2003.
Wal-Mart is the nation's biggest employer, the low-price champion, and
a seller of just about everything. A healthy family with a roof over its
head could supply virtually all of its other basic monthly needs with
one stop at a Wal-Mart Supercenter like the one here in Salina, Kansas.
To me, that raised a question: Can a family whose breadwinner works at
Wal-Mart afford to supply its minimum needs by shopping there?

Last Sunday, my adult son and daughter joined me for a visit to the
Wal-Mart Supercenter in Salina. We spent an hour and a half wandering
among the hundreds of red, blue and yellow "Always Low Prices" signs. We
checked many of those prices and then went home to do some calculating.
Our conclusion: A single parent employed full-time at Salina's Wal-Mart
and raising two children aged 4 and 12 does not earn enough money to
supply the family's basic needs by shopping at that same Wal-Mart.
According to the personnel manager at Salina's Supercenter, a cashier
earns a starting hourly wage of $6.25. After Social Security and
Medicare taxes, the paychecks for a month would total $1,016 for a
full-time 176 hours. (That's 40 hours a week, which would put this
cashier in a better financial position than the many employees who work
32 or fewer hours a week. Of course, hourly pay rises eventually, but
the 2001 PBS report "Store Wars" found that most employees have left by
the end of their first year.)
We calculated the amount that our hypothetical three-member family
would spend each month if as many of its essential needs as possible
were supplied by our local Supercenter. The bottom line: They would need
an absolute minimum of $1,136 per month to cover housing, food,
transportation, health care and miscellaneous expenses. Despite our best
efforts, we exceeded our cashier's monthly income by $120. We couldn't
have come even that close had our cashier's family not been eligible for
a State of Kansas child-care allowance that covers all but $22 per month
in child-care costs for such a family living on so low a wage.
To determine needs, we used published studies on an "adequate but
austere" budget for a family with one adult, one preschooler and one
school-age child living in Salina. But we slashed some of the published
budget items by as much as 38 percent, based on the "Always Low Prices"
we found at the Supercenter. And we completely eliminated anything we
could do without.

Take a look at the details of our budget and try to decide if you could
find a way to cut it and make ends meet.
"Living wage" campaigns across the country have attempted to determine
and advocate for a wage level that can provide a decent life for working
families. Living wages are designed to sustain a family over time. Our
goal was much more modest. All we asked of our Wal-Mart wage was to get
our cashier's family to the end of the month in a central Kansas city of
50,000, assuming they were already settled in a rented apartment or
mobile home and had a paid-for car, furniture and appliances. The
Wal-Mart wage failed – even at Wal-Mart prices, even with the 10
percent employee discount, and even with employer-assisted health
Our monthly budget allowed for a USDA-recommended "low-cost food plan"
on which we economized further by selecting the cheapest foods in each
category. It made for an unappealing and not especially healthful diet.
Gas, oil, and repairs for the car – which was used for little more
than getting the cashier to work and home – all came from Wal-Mart.
Our cost-cutting left no room for "luxuries": no travel outside Salina
County, no cable TV, no home telephone service, no movies, no newspaper
or magazine subscriptions, no fees for community sports or classes, no
saving at Wal-Mart's in-store bank in case the car had to be replaced,
no eating out (except for one meal a month at the McDonald's located in
the Supercenter). Most of what's available at the Supercenter was
off-limits to us: videos, haircuts, Christmas presents, eye care,
tanning sessions, family portraits, bats and balls, small appliances,
furniture, bicycles, film and developing.
There is a fundamental and inevitable conflict between the interests of
corporations, to whom wages are a cost, and most human beings, to whom
wages are a means of survival. Nowhere in this society is that conflict
better illustrated than at your local Wal-Mart. Most of its employees
and most of its customers depend on their paychecks to pay the bills.
But to keep its shareholders in the money, the company depends on
Wal-Mart could not survive in a town with good public transportation,
where families all grow their own vegetables, cut one another's hair,
sew their own clothes, and borrow and lend tools. Like all retailers, it
has to move vast quantities of merchandise at an ever-increasing pace.
It does it, as the sign in the store says, by "Daring to Save You Even
More." And to drive prices to rock-bottom, they have to drive down the
wages they pay.
Of course, the wages Wal-Mart pays in Kansas seem princely when
compared with those paid by many of its suppliers around the world. Try
going to your local Supercenter with the monthly paycheck of a
Bangladeshi factory worker who makes shirts for Wal-Mart. You won't make
it to the end of Aisle 1.

Here in America, the government implicitly recognizes the insufficiency
of Wal-Mart wages. Our cashier's family would be eligible for an Earned
Income Tax Credit (EITC) of $4,140 in 2002. That would close the gap
between the cashier's wage and bare survival, and provide enough
additional income to lift the family just above the poverty line.
EITC, food stamps, Medicaid and state programs like Kansas' childcare
allowance are needed because corporations like Wal-Mart refuse to pay
their employees a sufficient wage for the work they do. Wal-Mart would
not be able to "Rollback" prices the way it does, or pile up its
gargantuan profits, without this government subsidy.
In February, Fortune Magazine emphasized the unchallenged dominance of
the world's largest corporation: "Wal-Mart in 2003 is, in short, a lot
like America in 2003: a sole superpower with a down-home twang."
Well, if Wal-Mart represents both the future of employment and the
future of marketing in America, a lot more down-home folks are going to
be tumbling into that gap between Always Low Prices and Always Low
Stan Cox is a plant breeder/geneticist and writer living in Salina,

California; Wal-Mart Is Subject of State Labor Probe

Lisa Girion
Times Staff Writer

10 June 2003
Los Angeles Times
Home Edition

Wal-Mart Stores Inc. said Monday that California labor officials are
investigating the company's alleged failures to comply with state wage
and hour laws.

The disclosure in Wal-Mart's quarterly report to the Securities and
Exchange Commission did not specify the nature of the alleged
violations. However, a company spokeswoman said the California
Department of Labor Standards and Enforcement is reviewing Wal-Mart's
compliance with meal break requirements.

Wal-Mart spokeswoman Mona Williams said the investigation began in
December, and the company has been in discussions with enforcement
officials for about three months.

"This is no different from any other compliance review that other
employers go through," Williams said. "They are simply reviewing our
records to see if we comply. They have filed no complaint."

The nation's largest retailer is the target of wage-and-hour lawsuits
in several states. A suit in California, filed in Alameda County in
December 2001, accuses the company of forcing hourly employees to skip
meal breaks and work "off the clock." The lawsuit also accuses the
company's Wal-Mart discount stores and Sam's Club food warehouses of
failing to pay supervisory workers overtime.

The suit was filed as a proposed statewide class action, which Wal-Mart
is fighting. "Each case is highly individualized, and we feel they
cannot be addressed by a class action," Williams said.

The state labor department has not indicated to Wal-Mart whether it is
investigating the lawsuit's off-the-clock and overtime allegations.

The labor department has the authority to investigate all three claims
and can force violators to pay back employees.

Workers who do not receive a half-hour meal break during an 8-hour
shift are entitled to an extra hour of pay, said Dennis Moss, an
employment lawyer with Spiro Moss Barness Harrison & Barge.

State labor investigations are rare, however, because the department is
short-staffed, private employment lawyers say.

Officials for the state labor department did not return calls.

EPA Probes Wal-Mart Over Fridge Products
   WASHINGTON (AP) - Wal-Mart Stores Inc. said Monday the Environmental
Protection Agency has begun an investigation into the company's
compliance with some Clear Air Act laws relating to the sale of
refrigerant products.

    The EPA claims Wal-Mart made 22 sales of refrigerant products to
nonlicensed persons, entities, or both, the company said in its
quarterly report to the Securities and Exchange Commission.

    Wal-Mart Stores, which is based in Bentonville, Ark., said Clean
Air Act laws restrict sales of some refrigerant products to properly
licensed persons or entities.

     The company said it has an opportunity to settle the allegations
without admitting any wrongdoing or violations by paying a $400,000
civil penalty and entering a consent decree with the government.

      Wal-Mart said that when approved by a court, the consent decree
will require it to comply fully with the relevant Clean Air Act

      Wal-Mart shares fell 3 cents to close at $53.79 on the New York
Stock Exchange.

When Wal-Mart arrives, towns should tremble

5 June 2003
Lansing State Journal

Retail behemoth's tactics lay waste to communities

A recent Lansing State Journal article seemed to welcome a new Wal-Mart
to be built near a mall in Jackson.

The April 18 article cheering the entrance of a Wal-Mart into the
community is akin to celebrating a tornado twisting through the region.
Yet, inexplicably, that is precisely what the media and retail pundits
continue to do every time Wal-Mart opens a new store.

The unwavering support of Wall Street and the financial press is
understandable where Wal-Mart is concerned. A company that proudly rolls
over suppliers, pushes competition into bankruptcy and creates an entire
subculture of the working poor in its employees is, sadly, a star in
today's stock market environment.

By no standards, however, has Wal-Mart proven to be anything but
destructive to the communities it enters - driving independent retailers
out of business and creating a sea of asphalt to complement its stark

How, then, can a community newspaper herald Wal-Mart's arrival?

Fred Marx, a retail spokesperson, was quoted in the State Journal
saying "everyone wants a Wal-Mart." That statement could not be more
untrue. Countless lawsuits across the country seek to block the
construction of Wal-Mart stores to preserve the integrity of community
planning and avoid the backlash of a Wal-Mart debut.

When Wal-Mart was considering a move into downtown South San Francisco,
economic studies projected a loss of sales to the area of $11 million to
$24 million per year and the closing of up to 30 businesses. Certainly,
independent retailers in Jackson now wonder when Wal-Mart's predatory
pricing will force them to close their doors.

Wal-Mart's impact upon communities is not restricted to direct

Wal-Mart uses its muscle to push through property tax decreases for its
stores, forcing other businesses and residents to pick up its slack. In
Wilton, N.Y., Wal-Mart sought a 41 percent decrease in property taxes,
which would have devastated revenue for the school district, library,
and local ambulance and fire services. The town threatened to take
Wal-Mart to court and the company withdrew its demand.

Unfortunately, the dozens of other municipalities facing the same
situation may not fare as well.

While Marx stated that a Wal-Mart lease is "golden" for developers, the
fact is that Wal-Mart does not lease its stores, but owns them. This
gives the company the freedom to shutter its doors at any time.

To date, Wal-Mart has 300 empty storefronts across the country creating
an atmosphere of blight in the affected communities.

Marx also stated that "Wherever there is a Kmart, there can be a
Wal-Mart. Wherever there is a Meijer, there can be a Wal-Mart." That may
be true, but one cannot be certain that it is accurate in reverse.
Wal-Mart is well known for its ability to operate stores unprofitably
with the sole purpose of driving the competition out of business. Then,
Wal-Mart is free to increase its prices at will with little or no
competition in the area.

Certainly, Wal-Mart has evolved from a rural phenomena to a suburban
reality. This, however, should not lessen a community's resolve to force
this retail giant to adhere to the rules of the community and, frankly,
of decent behavior.


* Robert Potter is president of the United Food and Commercial Workers
Union Local 951, which represents more than 36,000 members in Michigan.


Wal-Mart Holders Defeat 3 Governance Proposals

By Ann Zimmerman
June 9, 2003
The Wall Street Journal

Wal-Mart Stores Inc. shareholders defeated stockholder proposals
related to corporate-governance issues, but three proposals garnered a notable number of votes at the annual meeting of the world's largest

At several large companies this year, some shareholder proposals have won double-digit percentage support. At Wal-Mart's meeting in an arena at the University of Arkansas in Fayetteville, 22%, or about 900 million shares, supported a proposal to require that two-thirds of Wal-Mart's directors be independent, without ties to the company or to Sam Walton, the company's late founder.

By this definition, only seven of the board's 13 members would be
considered independent. The other six include Mr. Walton's sons, Rob Walton, chairman of the board, and John Walton; Chief Executive Lee Scott; David Glass, former chief executive; Tom Coughlin, chief executive of the Wal-Mart Stores and Sam's Club divisions; and Jack Shewmaker, a former longtime executive.

Rob Walton defended the board's makeup. "Not one form of board
structure satisfies all companies," he said, adding that he considers
himself an independent member because "my interest is as a shareholder." The Walton family holds about 38% of the stock of the Bentonville, Ark., company.

A proposal to change the way the interest rate on deferred compensation is determined also garnered 22% of the votes. The proposal sought to prevent the board's compensation committee from paying above-market interest rates on executives' deferred salaries.

A third proposal, which has been introduced and defeated several times during the past 10 years, asked the company to prepare an
equal-opportunity report that, among other things, would provide a
breakdown of employees by gender and race and job categories during the past three years. The proposal received 12% of the votes.

Wal-Mart fell 1.5%, or 80 cents, to $53.82 a share in 4 p.m. New York Stock Exchange composite trading Friday.


Posted on Wed, Jun. 04, 2003

County supervisors target 'super-sized' retail stores


Super-sized retail centers such as Wal-Mart face new restrictions on opening full-service grocery stores in unincorporated Contra Costa County under an ordinance approved Tuesday by county supervisors.

The board took the action after a spirited public hearing packed with more than 200 people.

"I don't have a problem with Wal-Mart," Supervisor Federal Glover said. "I have a problem with the super-store concept.

"This is about good planning," he added. "It's about the impacts that I see happening in the community."

Supporters of the ordinance argued that retail giants often drive traditional grocery stores and small retailers out of business. Labor leaders added that it is particularly tough because Wal-Mart often pays less than union firms.

"It's very hard for smaller retailers to compete against this," agreed Supervisor Mark DeSaulnier.

The new regulations will apply only to retailers with a store in excess of 90,000 square feet. Such firms would be banned from devoting more than 5 percent of their floor space to the sale of non-taxable items such as groceries.

The city of Martinez has similar regulations in place.

After the hearing, Amy Halley Hill, western region representative for Wal-Mart, said the firm will explore its options, including taking legal action or supporting a referendum to overturn the ordinance.

"This is clearly aimed at Wal-Mart -- make no mistake," she said during the hearing.

The firm is fighting a similar regulation in Tucson.

Judy Davidoff, an attorney representing several large retailers, argued that the ordinance is discriminatory and won't do anything to lessen traffic or address other concerns.

But Supervisor John Gioia stressed that the measure does not ban Wal-Mart. It simply prohibits it from opening a full-sized grocery store after the building reaches a specified size.

"This impacts other kinds of businesses that will be over 90,000 square feet as well," Gioia said.

Several dozen Wal-Mart employees attended the hearing in their navy blue jackets. They argued that the firm provides a good living for them.

Wal-Mart employee Trina Sims said she raised two children on the wages she makes. "As far as the people in the room who are against Wal-Mart, I see a few here who shop at Wal-Mart," she added.

But numerous union leaders and others argued that such firms often pay lower wages and don't provide health care, which puts a burden on the county healthcare system.

"We feel that Wal-Mart's low price structure is built on the back of its workers," said Gwen Watson, co-chairwoman of the Interfaith Council Social Justice Alliance.

County supervisors approved the measure on a 3-0 vote, with Supervisor Gayle Uilkema abstaining because of a conflict of interest.

Hill said Wal-Mart has no plans at this time to open a new store in unincorporated Contra Costa.


John Accola 
31 May 2003
Rocky Mountain News

Lawyers representing Wal-Mart and hundreds of pharmacists suing the
discount retailer for nearly $45 million in damages have reached a
"tentative agreement" to settle.

In a joint motion filed in Denver federal court Thursday, the attorneys
asked Judge Zita Weinshienk to vacate a six-week trial that was
scheduled to start Monday.

"The parties believe it would be a waste of judicial resources to
commence trial on June 2 in light of the tentative agreement," said the

Weinshienk had already ruled in favor of the plaintiffs, in a 1999
summary judgment, that Wal-Mart Stores Inc. had violated labor laws by
not paying its pharmacists overtime and shorting their paychecks for two

The latest trial was to decide the dollar amount of damages for the
underpaid pharmacists, who are represented by Denver attorneys Frank
Azar and Gerald Bader.

The case was filed in 1995 on behalf of four Colorado pharmacists who
alleged they had routinely worked "off the clock" for Wal-Mart doing
paperwork and other chores.

Typically, their work lasted 60 hours, not the 40 hours indicated on
Wal-Mart's records, according to the complaint.

Over the years, 596 pharmacists signed on as plaintiffs.

They allege Wal-Mart's failure to pay them overtime compensation - by
improperly classifying them as salaried workers - was willful and that
the retailer intentionally shortchanged its employees.

That could entitle them to an additional year of accumulated overtime
pay at the rate of 1.5 times regular pay, say plaintiff attorneys.

Jeffrey Opp, a financial consultant hired by the plaintiffs, has
submitted documents calculating total damages of $44.6 million.

Earlier this week, Wal-Mart attorneys filed a motion to exclude Opp's
testimony, claiming his calculations were simplistic and that he was a
"witness dressing up as an expert."

Previously, the judge said jurors will be instructed to consider the
pharmacists hourly employees, not salaried workers who could be exempt
from federal labor rules requiring compensation for overtime.

At an April hearing, Weinshienk said she was "looking forward" to the
trial in June.

"I think it's going to be a lot of fun," she said.

"We're probably going to make some new law in the circuit on this

Posted on: Thursday, May 29, 2003

Suit charges desecration at Wal-Mart site

By David Waite
Advertiser Courts Writer

An organization that oversees perpetual care for the remains of Native Hawaiians and a woman who claims ancestral ties to the construction site where a new Wal-Mart store is to be built are suing Wal-Mart and state officials.

The suit contends that the 25 sets of human remains found at the site near Ke'eaumoku Street have not been cared for as prescribed by state law.

The lawsuit, filed yesterday by Native Hawaiian Legal Corporation attorneys Alan Murakami and Moses Haia III, accuses Wal-Mart and officials from the state Department of Land and Natural Resources of violating the public trust and unlawfully manipulating and violating sections of state law that deal with protection and preservation of human remains and desecration of graves.

Hui Malama I Na Kupuna O Hawaii Nei and Paulette Kaleikini are named as plaintiffs in the lawsuit.

Peter Young, state Department of Land and Natural Resources director, declined to comment last night.

"I can't respond directly until I have an opportunity to read the lawsuit," Young said.

Young met with Hui Malama officials last week and said he later contacted Wal-Mart representatives and asked them to put up a buffer fence around the site where the remains were found, clean up the area and find a better way to protect the open grave. He said he was under the impression Wal-Mart would act on the request immediately.

Wal-Mart officials could not be reached to comment last night on what actions have been taken to protect the remains.

The lawsuit asks that the Circuit Court declare that Wal-Mart and state officials are violating state law, and seeks a permanent injunction against them to prevent further alleged violations.

The lawsuit also seeks an amount of money to be determined at trial.

Wal-Mart purchased the 10.5-acre site in May 2002 and plans to build a Sam's Club and Wal-Mart there.

Reach David Waite at dwaite@honoluluadvertiser.com or 525-8030.



Following is a letter sent by UFCW Local 400 President Jim Lowthers to
the Charleston, WV, newspaper.  While Rep. Capito is one of the bill's
sponsors, the entire Congress will be voting on this bill in the near
future.  Modify this letter to urge your Representative to oppose
widening this loophole for Wal-Mart.

Industrial banks would damage local economy

By C. James Lowthers

FOR ALL its good intentions, a bill introduced by U.S. Rep. Shelley
Moore Capito would risk the welfare of working families in West
Virginia. H.R. 1375, "The Financial Services Regulatory Relief Act of
2003," is designed to knock down unnecessary regulatory barriers,
primarily for small banks and credit unions, but it contains a loophole
that would allow a little-known type of bank, called an "industrial
bank" (or industrial loan company), to open branches outside of its home
state without the new state's approval.

"Industrial banks," unlike all other banks, are exempt from crucial
federal banking laws. That means that, unlike all other banks,
industrial banks can be owned by commercial companies.

Do you think that companies like Wal-Mart, Enron and WorldCom should be
able to own a bank? I don't. Bank holding companies are subject to
strict regulations for safety and financial soundness by the Federal
Reserve Board. That gives Americans confidence that the money we put in
our banks is safe. Unfortunately, an "industrial bank" owned by a
Wal-Mart won't provide us that protection.

The branching provision in Mrs. Capito's bill would allow a company
like Wal-Mart to buy an "industrial bank" in Utah and open new branches
in West Virginia virtually unimpeded.

Just last year, Wal-Mart tried and failed to buy an "industrial bank"
in California and the company has vowed to try again. If Mrs. Capito's
bill passes, it would allow Wal-Mart to buy one of these banks and take
it national virtually overnight.

What's wrong with that? Wal-Mart is notorious for using its smiling
face to force local businesses with roots in our communities to close up
shop for good. Wal-Mart's stated goal is to control 30 percent of every
business line it is in - 30 percent of electronics, 30 percent of
clothing, etc. The company already sells 16 percent of all retail food
and only committed itself to that business in the last 10 years. If
Wal-Mart buys an "industrial bank" and opens branches here, they will
wipe out West Virginia's community banks.

Most community banks are owned and/or run by local citizens who have a
real stake in the lives of our neighbors and the well-being of our
communities. Our communities are their homes. The economic health of our
communities directly affects the health of these community banks.

Community banks, many of them in rural locations, are an important
source of funds enabling local businesses to thrive. Unlike many larger
banks that may take deposits in one locality and lend in another, most
community bank loans benefit the neighborhoods in which depositors live
and work. The interdependence of community banks and their local
customers is an integral part of the economic health of many West
Virginia communities.

Picture a scene in which the only bank in town is owned and operated by
Wal-Mart. Imagine owning a small business, perhaps a grocery store, and
being forced to share your business plan with Wal-Mart in order to
obtain much-needed credit. If passed, Mrs. Capito's bill will make this
scenario a reality.

A Wal-Mart bank would be able to steer loan decisions away from local
competitors. Our small businesses (and every business is small when
compared with Wal-Mart, the world's largest corporation) have limited
access to the capital they need to operate or expand. When Wal-Mart's
bank is the only one in town, what options will be left for local
merchants in need of credit?

Communities across the country know the impact of Wal-Mart's aggressive
business tactics. Little imagination is needed to see what a Wal-Mart
bank would mean to our communities, or to local community banks.

This thought brings us back to Mrs. Capito. Well-meaning though her
bill may be, we need Mrs. Capito to protect the money we put in our
banks and to protect West Virginia's communities. To do that, she needs
to close the loophole that would allow Wal-Mart and other commercial
corporations to buy a bank. That loophole isn't just bad for working
families. It's bad for West Virginia.

Lowthers is president of Local 400 of the United Food and Commercial
Workers, which represents some 5,000 members in West Virginia.


Wal-Mart's rise concerns top grocer Kroger

Copyright 2003 Houston Chronicle


New Kroger stores in 2003:
• Texas 249 at Antoine, opened in January.
• FM 2920 at Kuykendahl, opened in April.
• Atascocita at Will Clayton Parkway, opening in October.
• FM 2978 at FM 1488 in Magnolia, opening in November.
• U.S. 290 at Spring Cypress, opening in December.
• FM 1093 at FM 1464 in Clodine, opening in December.
• Eldridge at West Little York, opening in December.
• Tidwell at Antoine, opening some time in 2003.
If the Houston grocery business is a poker game, Kroger has the most chips.

But competition is increasingly fierce at this card table. When they deal 10 years from now, will Kroger still hold the winning hand?

Other big-time players include Safeway-owned Randalls, H-E-B and Fiesta, but Kroger is most worried about someone else.

The biggest threat is Wal-Mart, according to Gary Huddleston, Kroger's manager of consumer affairs for Texas and Louisiana.

Wal-Mart, the nation's largest retailer, has tremendous buying power and a reputation for value in general merchandising, which it now brings to the grocery business -- at its Supercenters and smaller Neighborhood Market grocery stores.

But Kroger is no small fry. It's the nation's largest traditional food retailer, and in Houston it has a particularly strong presence.

Kroger has a plan for taking on Wal-Mart, Huddleston said. The company aims to compete on price while offering unique amenities.

For example, 20 of Kroger's local Signature Stores have supervised play areas called HugslieLand, run by YMCA-trained supervisors and offering games and videos.

Numbers are also in Kroger's favor. By year's end, it will have 100 Houston-area stores.

Doing business in Houston since 1955, Kroger has gobbled up many prime locations, including some of the best in the heart of town.

"It always comes down to a neighborhood battle," said Chuck Gilmer, editor of the Shelby Report, a trade publication that follows the grocery industry, "Are you best located to serve an area, and are you offering what the neighborhood wants?"

Before opening one of its Signature Stores, Kroger mails surveys to neighborhood residents to get their input and responds to their requests.

Anywhere from 2,000 to 3,000 people typically participate in the survey, Huddleston said.

In 2003, Kroger will open eight Signature Stores and remodel six other stores in the area -- an impressive one-year expansion.

In Houston, Kroger has about a 28 percent market share, according to the Shelby Report.

Among national retail grocers, Kroger is a powerhouse, Gilmer said.

"Kroger is in a better position than any other national grocery retailer, but all chains have been taking a hit because of Wal-Mart," said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting firm in New York.

Wal-Mart's growth also explains, he said, why so much consolidation is taking place in the industry.

Grocery retailing is a high-volume, razor-thin profit margin business, and the advantage of a Wal-Mart Supercenter is that it can make a nice profit from the sale of, say, automobile tires, allowing it to sell lettuce really cheap, Gilmer said.

Kroger's acquisition of its own superstore chain in the Northwest, Fred Meyer, is a case of it "biting back into Wal-Mart's game," Gilmer said.

Located in Oregon, Washington, Utah, Idaho and Alaska, Fred Meyer sells electronics, home furnishings, groceries and more.

Kroger is also expanding its private-label merchandise to increase profits, Gilmer said.

"Kroger is being proactive in taking on Wal-Mart probably more than anyone else in the industry," said Meredith Adler, an analyst at Lehman Brothers.

"They have great market share position and are focused on getting prices competitive with Wal-Mart," she said.

"They have size and scale and are leveraging better all the time," by improving partnerships with manufacturers.

While Kroger's future looks good, Adler said, getting there will be challenging because with so many competitors, the battle gets expensive.

As in poker, she explained, retailers with weaker hands tend to stay in the game as long as they can afford to before pulling out.

Until the weaker hands fold, all grocery retailers will have to be extremely competitive on price.

The traditional retail grocery industry has, in general, been hurt by Wal-Mart over the past decade, Davidowitz said, but recently Kroger has done relatively well.

For its fiscal year ending Feb. 1, the Cincinnati-based company's sales increased 3 percent to $51.76 billion. Net income before special items rose 18 percent to $1.23 billion.

With a heavy hitter like Wal-Mart posing a particular threat to Kroger, "you've got to worry about everybody," Gilmer said.

San Antonio-based H-E-B, for example, is innovative and aggressive and making a strong push in Houston.

"Everyone is good," Gilmer observed. "There aren't many slack grocers out there."


Area is hot spot to organize Wal-Mart
If it can be done, Toledo is the place,
           union says
Jeff Stephens, Local 911 president, says the union must educate
employees and customers; the company says it doesn't need a union


SOON AFTER a dozen employees in a Jacksonville, Texas, Wal-Mart
Supercenter's butcher department joined a union, the retailer that
promotes itself with yellow smiling faces stopped cutting meat and
switched to prepackaged cuts.

It wouldn't be much of a stretch, then, to imagine the world's largest
company sacrificing its budding ranks of metro Toledo stores if the
United Food & Commercial Workers organize their employees here, one
labor expert said.

"I can see Wal-Mart saying, ...'We'll just close our stores in Toledo
and expand elsewhere,'" said Paul Clark, professor of labor studies and
industrial relations at Pennylvania State University.

The union is leading the way in attempts to organize at least some of
about 3,400 Wal-Mart Stores Inc. outlets nationwide as the chain that
has become mainstream in small communities turns its sights on
metropolitan, and more likely union, areas. The first of three or four
planned metro Toledo stores opened in March in Oregon.

For now, UFCW Local 911 has called for a boycott of Wal-Mart, runs
radio spots that suggest where to shop instead, stages occasional
informational picketing at the store, holds rallies, appeals to other
unions, and is making plans to pass out literature in neighborhoods.

Local 911 will need to educate employees and customers more before it
can approach organizing workers in metro Toledo stores, said Jeff
Stephens, the union's president.

"I believe if it can be done anywhere, it can be done in Toledo," he
said. National figures show that Toledo is one of the most heavily
unionized metro areas in the country.

Wal-Mart spokesman Cynthia Illick said the company is not anti-union,
but it doesn't believe a union is needed in metro Toledo or anywhere

She said the business doesn't need a third party to represent its
employees, whom the company steadfastly calls "associates." The stores
have an open-door policy, and employees can progressively take their
complaints up the ladder, to the chief executive if necessary, she

"One thing you have to remember is that the unions are a business, and
at this point, they're a declining business," Ms. Illick said. "Their
revenue is based on membership."

She added of Wal-Mart employees: "There's no middle man, and they don't
pay anyone dues."

A linchpin of union distaste for Wal-Mart is in its labor practices.
More than 40 National Labor Relations Board complaints have been filed
in the last decade against the Bentonville, Ark., company. They included
a couple - one of which was dismissed - involving Ohio stores. Union
organizers contend Wal-Mart intimidates employees, blocks union
elections, and uses other means to thwart organizing campaigns, such as
closing a department instead of accepting union representation.

The closing of the meat-cutting department in Jacksonville was a
coincidence, Ms. Illick said. Whether to offer pre-packaged meats in all
Wal-Mart stores had been under study for two years before the organizing
vote, and executives decided to discontinue all Supercenter meat-cutting
operations, she said.

Two former Wal-Mart employees in northwest Ohio said they were fired
for unwarranted reasons, firings they contend a union could have helped

One, Kelly O'Neill of Delta, said she was fired two years ago after
more than three years at the Wauseon store. She said she was working
alone in the cafeteria and needed to take some medication with food for
a heart condition, and when she couldn't find anyone to relieve her,
consumed a hot dog and pop - which she wasn't allowed to ring up for
herself - and was fired before she could pay for it.


A Wal-Mart store in the Toledo area.

The company makes workers fear for their jobs, said former employee
Catherine Morgan of Wauseon.

Those jobs, the food workers union contends, are not worth the fear.
Among other things, the union rails about Wal-Mart's wages, health
insurance, and lack of a pension.

Ms. Illick said Wal-Mart pays wages competitive with other area
retailers but she declined to say what Oregon store employees make. A
job advertisement from before the store opened states wages start at $8
an hour.

Employees can opt to get limited health coverage during their
introductory period, which is six months for those working at least 34
hours a week and two years for part-timers, Ms. Illick said. That plan
costs about $30 a month and covers up to $1,000 worth of health-care
costs annually. After that, other health-care plans are available,
including one for a family that costs $114 a month, Ms. Illick said.

In lieu of a pension, Wal-Mart has a 401(k) plan to which Wal-Mart
makes contributions even if the employee doesn't, the spokesman said.
Other benefits include a stock purchase plan, with a 15 percent company
match, and profit-sharing based on how well an employee's store does,
she said.

By comparison, UFCW-represented employees at local Meijer stores start
at about $7 an hour, but they are guaranteed progressive raises starting
after three months, Mr. Stephens said. The health-care plan, which
typically full-time employees get, costs the employee $90 to $100 a
month, and there is a pension, he said.

The presence of Wal-Mart, whose sheer size is an advantage for
negotiating prices with suppliers, makes it hard to negotiate labor
rates with companies such as Meijer, Mr. Stephens said. "They have to
compete with Wal-Mart," he said.

Organizing Wal-Mart, experts agree, would be a major coup and would
help the union in organizing other retailers.

Wal-Mart is powerful, but the UFCW is one of few unions committed to
organizing, said Gary Chaison, professor of industrial relations at
Clark University in Worcester, Mass.

"They're working hard to get one, and they'll get one," he said.

Still, while boycotting a supermarket can be effective because of
narrow margins, Wal-Mart easily can absorb losses at a given store or a
few stores, Mr. Chaison said. It's hard to make a case that Wal-Mart is
a sweatshop, and management can argue that the union is jeopardizing
jobs by hurting business with a boycott campaign, he said.

But Mr. Clark, the Penn State professor, said a boycott is justified.
He conceded, though, it would be hard to hurt Wal-Mart.

"People like Wal-Mart - they like to get the stuff cheap, and they've
got everything you want," he said.

Sales at the suburban Toledo store are meeting expectations, Wal-Mart's
Ms. Illick said.

Nationwide, meanwhile, the food workers union's organizing efforts are
likely to get help from a gender-discrimination lawsuit filed in San
Francisco alleging that Wal-Mart favors men in promotions and pay, said
Al Zack, the international union's assistant director of strategic

A hearing on whether the lawsuit can have class-action status is
scheduled for July 25, and many of the plaintiffs now are active in
organizing, Mr. Zack said. Other class-action lawsuits nationwide allege
employees were made to work off the clock, sometimes after being locked
inside stores.

Firms' Push to Enter Banking Wins Hill Support
Brokerages and Retailers Would Operate Without Fed Oversight; 
Greenspan Is Among Critics

By Kathleen Day
Washington Post Staff Writer
Friday, May 23, 2003

Merrill Lynch, Morgan Stanley, Wal-Mart, General Electric and other
companies are gaining support in Congress for the right to set up a
nationwide banking system that could compete with commercial banks but
operate under looser federal rules.

Consumer groups, bankers, some lawmakers and Federal Reserve Board
Chairman Alan Greenspan have sharply criticized the effort, saying it
would create a second, parallel banking system that would result in
unfair competition and more risk for the federal deposit insurance
system and possibly taxpayers.

The changes, contained in two pieces of legislation, one of which has
been passed by the House, would enable retailers and manufacturers, such
as Wal-Mart and GE, to own full-service banks nationwide, which current
law prohibits. They would also allow securities companies to own
full-service banks without having to submit to oversight by the Federal
Reserve Board.

At issue is whether Congress should expand the power of obscure
entities known as industrial loan companies. These state-chartered,
limited-purpose banks -- which operate in Utah, California, Colorado,
Nevada and Minnesota -- generally specialize in one area, such as
offering credit cards. The owners of these companies are not regulated
by the Federal Reserve and may include automakers, discount department
stores and other firms that are largely unrelated to financial

The House Financial Services Committee has passed two bills that would
allow the giant Wall Street and retail firms to transform their
industrial loan companies into full-blown banks. For example, Merrill
Lynch would be allowed to open full-service branch offices around the
country that could accept deposits, cash checks and pay interest on
accounts for individuals and companies.

One bill, which passed the House last month, would give industrial loan
companies the right to offer checking accounts to businesses and to pay
interest on that money. These new powers are necessary if industrial
loan companies are to compete with commercial banks, executives at
securities firms say.

A second bill, passed by the committee this week, would make it
possible for industrial loan companies to set up branch offices
nationwide without seeking states' permission. Currently they cannot do
that in most states.

Greenspan, in a letter to Rep. Michael G. Oxley (R-Ohio), chairman of
the House Financial Services Committee, said the changes "would alter
the structure of banking in the United States and be contrary to two
important national policies," one prohibiting non-financial companies,
such as Wal-Mart, from owning a bank, and one that gives the Federal
Reserve responsibility for ensuring that "companies that own federally
insured banks operate in a safe and sound manner."

"Industrial loan companies are a loophole that would be greatly
expanded by this legislation," Federal Reserve Board governor Donald L.
Kohn said in a recent interview. "If they want parity with banks, they
should have parity in every respect, and that means their parent
companies would be subject to the same rules and regulations the parents
of other federally insured banks are subject to. If they were granted
the powers they are trying to obtain, they would be treated differently
and preferentially relative to other federally insured banks."

The American Bankers Association is against giving the industrial loan
companies new powers without Federal Reserve supervision. The Federal
Reserve is worried that if the bills become law, companies that have
full-service banks, such as Citigroup, might drop their regular bank
charters and move their operations into their industrial loan companies
to avoid Fed scrutiny, according to Fed sources. Citigroup declined to

Merrill Lynch and Morgan Stanley, which have taken the lobbying lead on
the issue, say industrial loan companies are adequately regulated by
Utah state regulators and by federal regulators at the Federal Deposit
Insurance Corp. FDIC Chairman Donald E. Powell and Utah Commissioner of
Financial Institutions Ed Leary agree.

But Greenspan said, in his letter, that there were significant
differences in the regulatory authority of the Fed and the other
overseers. For instance, the FDIC and the state can only regulate the
industrial loan company itself, not the parent. The Federal Reserve is
required to examine the financial health of the parent company to ensure
that if the non-bank portion fails, it does not plunge the bank into
financial problems that would pose a risk to the federal deposit
insurance system and ultimately the taxpayer. The Fed, for example, can
require the parent company to hold additional reserves as a cushion
against potential losses.

Executives at Merrill, Morgan and Goldman say they do not want to be
regulated by the Federal Reserve Board, because they think it is overly
restrictive. For example, if they are under the Fed, most security
companies would have to hold more capital as a potential cushion against
loss than they currently have to hold.

Wall Street firms also argue that the legislation would not have a
major impact on their industrial loan company operations. A two-page
document being circulated to members of the House Financial Services
Committee by Merrill Lynch and Morgan Stanley says that industrial loan
companies "have long had the authority" to offer checking-type accounts
to "both retail and corporate customers."

But regulators with the federal government and in Utah, where Merrill's
industrial loan company was chartered, say that only small industrial
loan companies -- those with assets of $100 million or less -- can offer
corporate checking accounts and that it's unlikely giant securities
firms would want a bank that small. Under the legislation, industrial
loan companies of any size could offer corporate, interest-bearing
checking accounts.

Merrill Lynch, which has owned an industrial loan company since 1987,
uses it to offer its securities customers federally insured,
interest-paying accounts and loans secured by those accounts. As of June
30, 2002, Merrill Lynch's industrial bank, based in Salt Lake City, had
assets of $63 billion. Morgan Stanley has told lawmakers that its
Utah-based industrial loan company is a tiny institution. Public records
show the industrial loan company has assets of $2.8 billion.

Goldman Sachs and UBS Warburg have applications for industrial loan
companies pending in Utah.

A Wal-Mart spokesman said changes in the industrial loan company rules
are the retailer's best hope of getting into banking, given the other
rules that bar it from owning a bank. The company wants to offer banking
services, because those are the services most frequently requested by
customers, said Wal-Mart spokesman Jay Allen. "Our fixation is not on
getting a bank, but on giving our customers what they want," he said.

Wal-Mart for years has been offering money orders, money transfers and
paycheck cashing, and at cheaper prices than competitors, Allen said.
The company also has leased in-store space to local banks at 784 stores,
but hundreds of its stores can't find a bank to partner with.

"The issue for us is providing affordable, everyday prices for
financial services to our customers and our employees, with a particular
interest in serving those who aren't served by anyone else, the
so-called unbanked," Allen said.

Critics say the issue for them is potential conflicts. "Without proper
oversight, a commercial company might be tempted to use an industrial
bank as a personal piggy bank and endanger the safety and soundness of
the bank," said Travis Plunkett, legislative director of the Consumer
Federation of America.

The current situation dates to 1999, when Congress passed the
Gramm-Leach-Bliley Act. It deregulated the financial services industry
by allowing securities and banking to exist under one roof as long as
the Federal Reserve oversaw the parent company.

The law also closed loopholes that had enabled non-financial companies,
such as Ford Motor Co., to own banks, leaving industrial loan companies
as the only way for non-financial companies to enter banking.

An exception was made for industrial loan banks because they were
generally small and engaged in limited banking activities.

Utah has chartered 24 of the 53 industrial loan companies in the
country, more than any other state. California and Colorado, which have
chartered 19 and five, respectively, have barred non-financial firms
from owning an industrial loan company, citing historic separation of
commerce and banking in the United States. California's decision was
triggered by an application from Wal-Mart. Nevada is debating the
commerce and banking issue.

The idea of expanding powers for industrial loan companies has strong
support in the House, where supporters say these other companies have a
right to compete with banks on an equal footing. Critics are hoping for
a compromise. Rep. Barney Frank (D-Mass.), the ranking Democrat on the
House Financial Services Committee, said he was working with Oxley to
narrow the law by barring industrial loan companies owned by
non-financial service corporations, such as Wal-Mart, from enjoying the
expanded new branching powers that industrial loan companies owned by
securities firms would enjoy. It's unclear whether GE also would be
barred. Oxley's staff did not return repeated telephone calls and

Rep. Jim Leach of Iowa, the former chairman of the House Financial
Services Committee and now its second-highest-ranking Republican,
opposes the legislation and is concerned about its impact. "Seldom have
I known of a greater power play more against the public interest than
that being contemplated in these bills. It reduces supervision of the
financial sector at precisely the time that dangers to the financial
system are merging in unpredicted ways."

The legislation may have a tougher time in the Senate. Although Sen.
Robert F. Bennett of Utah, the No. 2 Republican on the banking
committee, strongly supports the measures, Chairman Richard C. Shelby
(R-Ala.) has, in the past, been an advocate of separating commerce and
banking. He has not indicated his position on the new effort. Sen. Paul
S. Sarbanes of Maryland, the committee's ranking Democrat, strongly
opposes it.

Plunkett said it was ironic that Merrill Lynch, Morgan Stanley, Goldman
Sachs and UBS were pushing to expand the power of industrial loan
companies -- and are embracing the state of Utah as a primary regulator
that could help set national bank rules.

Last month, these firms were among 10 Wall Street firms that paid $1.4
billion to settle state and federal charges that they had cost
individual investors billions of dollars by issuing inaccurate, overly
rosy stock research reports to win investment banking business. These
firms continue to decry a probe by New York state that led to the
settlement because they say state officials should not be setting rules
for a national and global industry.

"We think it's a particularly bad idea that the companies pushing this
are investment firms: Given everything we know about how poorly
investment firms have handled conflicts of interest in recent years, why
would we make it easier for them to skirt federal restrictions?"
Plunkett said.


Wal-Mart steps into `morality police' role

Robert Morast
9 May 2003
Argus Leader

Wal-Mart is the new Jerry Falwell.

Like religious leader Falwell, the popular chain of discount stores is
hiding behind a smile - in this case, a yellow smiley-face that
supposedly controls the prices at Wal-Mart - and telling people what
they should and should not be listening to, looking at or reading.

Since the mid-'90s, Wal-Mart hasn't allowed the sale of music albums
with lewd, questionable or offensive lyrics or images.

This has been a continual controversy because the chain is essentially
practicing a sneaky form of censorship by "telling" record labels what
artists can and can't say in order to have their music carried by one of
the largest suppliers of commerce in the country.

The idea still rubs me raw.

But now, Wal-Mart has stepped up its role as a mouthy member of the
morality police by banning the sale of the popular men's magazines FHM,
Maxim and Stuff.

The New York Times reported that this move was made after Wal-Mart
listened to customer complaints that the magazines - which some people
mistakenly label as soft-core porn because of their content of sexy
women - were offensive.

The Times also reported that Wal-Mart was under pressure from Christian
groups about the sale of some magazines.

While it is probably Wal-Mart's right to sell whatever it wants or
doesn't want to, the decision to ban these "racy" magazines is
ridiculous in its hypocritical nature.

A trek to the magazine rack at the east-side Wal-Mart in Sioux Falls
confirms that no copies of FHM, Maxim or Stuff are available. But it
also displays how small-minded the move is.

A host of nearly nude women in sultry positions still are present on
the covers of plenty of magazines. In the men's section, the famed
Sports Illustrated's swimsuit edition features a barely clothed hottie
who could easily be on the cover of Stuff. But that's sport, and
Wal-Mart customers love sports.

Move over to the women's magazine section, and there's enough skin to
send a pubescent male into a hormonic frenzy.

On the cover of W, noted pinup girl Pamela Anderson poses as sexy as
ever, and inside shots show her teasing readers with skin and poses of

Move over to Self, and there's a shot of Lucy Liu in a bikini. But
that's nothing special; there are a lot of bikini-clad women in women's
magazines. Yet they won't be banned because millions of women shop at
Wal-Mart, and a large share of those women like those magazines.

The skin parade doesn't stop in the magazine section. Walk over to the
clothing department, and you'll find promotional posters of women posing
in nothing but the latest lines of underwear. They're as sexy as
anything in FHM.

I suppose you could argue that these underwear ads and women's
magazines are less lascivious than the banned periodicals, but that's
the problem with Wal-Mart's decision. It's suddenly telling us what is
too sexy or distasteful for average Americans and, in the process,
making the chain more pleasing to the large portion of Americans who try
to follow a "moral" lifestyle.


Yet, while Wal-Mart is taking to task the morality of some periodicals,
it's overlooking its own movie section.

For sale are the first season of "Six Feet Under," which has a lot of
"morally questionable" homosexual situations; "Cheech and Chong" films,
which glamorize drug use; and "8 Mile," which clearly shows star
Eminem's character having sex. But apparently when Eminem sleeps with a
slut, it's art.

One could argue that "racy" magazines are more accessible to young boys
than movies, but the fact remains that in either case, Wal-Mart is the

And while magazines or music with lewd material is wrong, publications
about guns or high-action movies are okay.

But banning those would mean that the large faction that uses Wal-Mart
as a portal to convenience and culture would be offended. And they buy
more products than young men looking for some risque print media while
their moms wind shopping carts around the store trying to find some
cookies, pantyhose and maybe a six-pack of Schlitz.

Still, the most offensive example of Wal-Mart's skewed ideals is that
while it's okay to declare sexy magazines as dastardly, moving into
small towns and forcing mom-and-pop stores to close because they aren't
able to compete with the giant corporation is "just business."

Robert Morast grew up on a ranch. He can be reached at
rmorast@argusleader.com or 331-2313.

Wal-Mart Execs' Testimony Could Help Sex Bias Suit

May 1, 2003 

By Liza Featherstone
WeNews correspondent

The sex bias claims by a group of Wal-Mart employees may be
strengthened by recent pre-trial testimony of Wal-Mart executives.
Meanwhile, the group awaits a decision whether their case will become
the largest civil rights class action in history.

(WOMENSENEWS)--Female plaintiffs in a major sex-discrimination
class-action against Wal-Mart filed for class certification on Monday,
before a San Francisco federal judge.

Depending on the outcome of a class certification hearing this summer,
which will decide how many women can be included in the case, the suit
could become the largest civil-rights class action in history. If the
plaintiffs have their way, the class will  include over 1.5 million

One of the plaintiffs' lead lawyers, Joseph Sellers of Cohen, Milstein,
Hausfeld and Toll, a law firm with offices in New York, Washington, D.C.
and Seattle, says the pretrial testimony undercuts Wal-Mart's defense
that the reports of sex discrimination were isolated incidents by
renegade managers. Sellers says that the statements made under oath by
Wal-Mart executives indicate that people running Wal-Mart have been
aware of the company's "failure to promote women and they've done
nothing about it." He adds the statements also show that sexism is a
part of Wal-Mart's corporate culture, even "at the very highest

The lawsuit, Dukes v. Wal-Mart, is named for lead plaintiff Betty
Dukes, a 52-year-old African American woman who still works at Wal-Mart
in Pittsburg, Calif. In the case, seven current and former employees are
charging the nation's largest employer with discrimination in
promotions, pay, training and hiring. A majority of the company's
workers are women, but women fill only one-third of its management
positions. The current plaintiffs, all of whom are from California, are
supported by more than 100 detailed statements from women who worked in
Wal-Mart stores in 30 states. Many women say Wal-Mart supervisors told
them that men were paid more because they had families to support.

Thomas Coughlin, chief executive officer of Wal-Mart Stores Inc. based
in Bentonville, Ark., has also given testimony in the case. Questioned
about diversity goals Wal-Mart sets for itself, Coughlin testified that
he did not know what they were or whether the company was meeting them.

In speeches to company managers, Coughlin has stressed the importance
of winning the customer's trust. Plaintiffs' lawyer Joseph Sellers
showed Coughlin handwritten notes for such a speech, in which, according
to Sellers, the Coughlin had written that customers should feel as if
they could trust Wal-Mart employees with "their wife and their wallet."
Coughlin admitted those notes were his and that he gave this speech
frequently. Sellers told Women's eNews he found Coughlin's use of the
term "wife" revealing, as it suggested that he assumed he was speaking
to a predominantly male group and because "it sure came across that you
were trusting them with your chattel, your property."

Personnel Chief Disavows Diversity Memos
Coleman Peterson, executive vice president of Wal-Mart's "people
division," as the company refers to its human resources department, has
worked for the company since 1994. According to internal company memos
obtained by the plaintiffs' lawyers, Peterson has, during his tenure,
repeatedly let his Wal-Mart colleagues know that women are
underrepresented in company management and offered suggestions on
remedying the problem, including hiring a point-person to oversee
diversity initiatives.

In one memo, Peterson complained that Wal-Mart did not hold managers
accountable for promoting more women and minority men. Under questioning
from Sellers, Peterson distanced himself from the implied criticism in
his statement, attributing it to a general spirit of perfectionism at
the company. At Wal-Mart, he said, whatever the topic of conversation,
the message sent by leadership is that "we can always do better."
Pressed further, he said, "Part of my responsibility is to get
everybody's attention."

Sellers, referring to the statement in the memo, asked, "Well, was it a
lie? Were you writing something that wasn't true?" Peterson answered,
"Yes, I was."

Minutes of Wal-Mart board meetings, provided to plaintiffs' lawyers,
record that Peterson, on several occasions, reminded his colleagues that
the company lagged far behind its competitors in representation of women
in management. He pointed out that, for example, Target, a competing
retailer based in Minneapolis, 52 percent of managers are women.
According to economist Marc Bendick, an expert witness hired by the
plantiffs, 34 percent of the managers in Wal-Mart stores are women,
while the company's major competitors boast 56.5 percent female
management. Bendick, a partner in the private firm Bendick and Egan
Economic Consultants, has analyzed employment data in more than 100
employment discrimination cases and has testified for both employees and

In April, Wal-Mart released competing analyses by its own experts,
disputing those interpretations of its work-force statistics,
maintaining, among other points, that women are promoted at Wal-Mart "at
a rate that exceeds their rate of applying . . . for those promotions."

In the case, Wal-Mart has consistently argued in that competitors'
numbers only look better because they count department managers, or
supervisors who are paid by the hour, as managers, while Wal-Mart counts
only salaried supervisors. Salaried managers earn significantly more
money. A woman working as an hourly department manager, for instance,
makes on average $21,709 a year, while as an assistant manager--the
lowest level of salaried management--she'd average $37,322. Salaried
managers are also given much more responsibility.

The majority of hourly supervisors are women, as are the majority of
other hourly workers at Wal-Mart. Peterson claimed that when he raised
the issue of female representation at meetings and cited other company's
statistics, he always added this disclaimer about the hourly managers,
but he was unable to explain why that disclaimer never appeared in the
meetings' minutes.

While Peterson repeatedly asserted that other large retailers count
hourly supervisors as management, he was able to provide only a single
example of a company that did this.

Erratic Job Postings, Meetings at Strip Clubs
The plaintiffs have also cited Wal-Mart's lack of systematic job
posting as a barrier to women's advancement. Human resources experts
agree that posting notices announcing open positions in places where
employees can see them--break rooms, for example--tends to undermine
favoritism and prejudice while promoting more fairness in a workplace.

Peterson admits that posting salaried job openings leads to greater
equality of opportunity, but also acknowledged that Wal-Mart doesn't
enforce it in any systematic way. Asked about individual store managers'
decisions not to post particular positions, he said "Frankly, it's not
something I would look at or review." Nor, he added, would any of his
staff in the "people division" monitor this.

Some female managers have testified that business meetings with their
male Wal-Mart colleagues have been held in strip clubs and Hooters
restaurants, an Atlanta-based chain, in which the customers, 70 percent
of whom are male, are waited on by attractive and scantily clad "Hooters
Girls." (The motto on the company's Web site is "Men have different
faces so you can tell them apart.") Coleman Peterson felt that strip
club get-togethers on company time were not "something Wal-Mart culture
would support and believe is okay."

Asked about business meetings at Hooters, however, he reserved
judgment. "It is conceivable in some small town that Hooters is kind of
like the restaurant du jour, okay," he said, "and that it is viewed as
one of the most elegant and really one of the best places to meet and

Wal-Mart has long required that employees be willing to relocate when
promoted into management, a rule that has, according to plaintiffs, been
a major barrier to women's advancement in the company. (In his
autobiography, "Made in America: My Story," company founder Sam Walton
acknowledged this problem.) A Resident Assistant program is intended to
promote women and other employees who cannot relocate their families but
wish to enter the ranks of management.

When asked by Sellers about this program in a deposition, Wal-Mart boss
Coughlin said he believed it was a dead end and hadn't helped to promote
a single employee.

Susan Phillips, international vice president of the Washington,
D.C.-based United Food and Commercial Workers Union, and director of its
Working Women's department, says if Wal-Mart doesn't start treating
female workers better, female consumers may take notice. (The union has
been trying for several years to organize Wal-Mart workers. No Wal-Mart
workers currently belong to a union.) "Women spend about 90 percent of
consumer dollars," she says. The National Organization of Women last
year gave its "Merchant of Shame" award to Wal-Mart and urges consumers
to shun the company.

Ellen Rosen, a Brandeis University professor of women's studies and
author of "Making Sweatshops: The Globalization of the U.S. Apparel
Industry" is now writing about Wal-Mart and female workers. She sees a
connection between conditions in overseas factories where Wal-Mart
clothing is made--and where most of the workers are women--and those of
women working in its U.S. stores.

"To promote the bottom line at the home office," she says, Wal-Mart
relies on "women workers, who are paid a 'women's wage.' This may be
leading to a new kind of globally sanctioned gender discrimination."

Liza Featherstone is the author of "This Woman's Work: Poverty,
Discrimination, and the Nation's Largest Private Employer," a book about
sex discrimination at Wal-Mart, which will be published by Basic Books
in late 2004.


Meet the Enron of Workers' Rights

By Liza Featherstone

Liza Featherstone, a writer in New York City, is working on a
forthcoming book about Dukes v. Wal- Mart.

May 1, 2003

Wal-Mart, the nation's largest private employer and the richest company
in the world, may just be the new Enron.

The mass merchandiser has been widely celebrated as a paragon of
business success, just as Enron once was. It tops the Fortune 500, and
was listed this year as one of Fortune's "Most Admired Companies." But
Wal-Mart, the target of a massive and historic lawsuit, is a scandal,
not a praiseworthy business model.

Dukes v. Wal-Mart - named for its lead plaintiff, Betty Dukes, who
still works at a Wal-Mart store in Pittsburg, Calif. - charges the
company with sex discrimination in promotions, training and pay. On
Monday, lawyers representing the plaintiffs filed a class certification
motion before a San Francisco federal judge, asking him to allow the
case to proceed on behalf of more than 1.5 million women, making it the
largest employment discrimination case in history.

Women make up more than two-thirds of Wal-Mart's hourly workers, but
the company remains virtually untouched by the women's liberation
movement. Its competitors had a larger percentage of female managers in
1975 than Wal-Mart had achieved in 1999. Even internal company memos
acknowledge that Wal-Mart lags behind its competitors in the promotion
of women - quite an accomplishment given the retail industry's longtime
record of systemic sex discrimination.

And yet, a recent Business Week headline exemplified the worshipful
attitude of the business community: "How Wal- Mart Keeps Getting it
Right." Wall Street loves the company's robust stock values, and the
rest of the business world is in awe of its profits. Customers love its
low prices, not to mention the "one- stop shopping" it offers. At
Wal-Mart you can change a tire, buy groceries for dinner, and get a new
pair of shoes and some yard furniture - a set of errands that once would
have required a long afternoon of visits to far-flung merchants.
Underpaid, over-worked America delights in spending as little as
possible, all in one place.

But the retailer keeps those prices down and the profits and stock
prices soaring by violating workers' rights, especially those of women.
It doesn't need Enron's "creative accounting."

Experts hired by the Dukes plaintiffs to analyze Wal-Mart's own work
force data find that at every level of the company, women are paid less
than men who hold the same jobs. Women testify that when they've
ventured to ask why, their Wal-Mart superiors have come up with some
astoundingly primitive answers. A South Carolina employee was told that
"God made Adam first," while an Arizona manager was informed she "didn't
have the right equipment." Perhaps even more disturbingly, one
plaintiff, a divorced mother of two, was assured that a man was paid
more because he had "a family to support."

In addition to sex discrimination, Wal-Mart is notorious for ignoring
federal laws protecting workers' freedom of association. The company has
been found guilty of retaliating against - even firing - workers for
union organizing.

Wal-Mart has also been accused, in class action suits filed in more
than 30 states, of breaking federal overtime laws. In many cases,
workers say, managers locked the store doors and would not allow workers
to leave.

Workers who make clothing and toys sold at Wal-Mart - mostly young
women in Asia - aren't treated much better. The company is frequently
criticized by human rights groups like the National Labor Committee and
the Lawyers' Committee for Human Rights for its less-than-half-hearted
efforts to improve sweatshop conditions in factories making Wal- Mart

Yet we're not hearing as much about Wal-Mart as we heard about Enron.
Its crimes receive comparatively little media coverage, and while Enron
was a poster child, albeit briefly, for politicians hoping to sound
tough on corporate corruption, no politicians are promising to punish,
much less reform, Wal-Mart.

Ken Lay is considered an embarrassment, a fallen idol of the
now-forgotten New Economy, but the late Sam Walton is still regarded as
a folk hero whose heirs carry the victory torch of a noble and
profitable tradition. That's because while cheating shareholders is
considered an outrage, cheating workers - especially female workers - is
too often shrugged off as business as usual.

It shouldn't be. Workers deserve fairness, and Wal-Mart deserves to be
the new Enron, a symbol of shameless corporate greed and hubris. Unlike
Enron, though, Wal-Mart - which is growing so fast that analysts expect
it to run afoul of anti-trust laws by 2009 - isn't going away. Neither
should its critics, or the workers brave enough to stand up to the
discount behemoth in court.


Wal - Mart May Value Families, but Women?


April 29, 2003

The economy being in the pits and all, I'd been thinking lately about
getting a second job, just a bit of moonlighting to bring in a bit of
extra mazuma.

So I went to this employment agency and told them what I was looking
for, and they handed me a ballpoint pen and a clipboard and told me to
sit down and fill out the job application.

Name, address, experience, mm-hmm, right, check, got it....

And then I got to the part of the form describing the job, and the work

"Must be willing to hang out at late hours at strip clubs, in the
company of oversexed businessmen."

"Must answer to nicknames like 'Little Janie Q.' "

"Must accompany male executives and managers to lunch or dinner at
T-and-A-themed restaurants, and be a good sport about it."

And I'm thinking, whoa, Nellie! Just what kind of job is it I'm
applying for here? Escort service?

I turned over the form and scanned it for the job title. There it was:
"Assistant department manager, Wal - Mart ."

Wal - Mart ? Family values Wal - Mart ? All-American Wal - Mart ? Heart
of the Ozarks Wal - Mart , the biggest little company in America?

Gospel-true, swears a brief filed yesterday in federal court for a
group of California women suing the big W for job discrimination.

From what the women have to say in that brief, the Wal - Mart working
atmosphere for women really doesn't sound much different from making a
living in a strip club, except for the wardrobe.

At Wal - Mart , just as at Club Slee-Z, about three out of four
employees are women.

At Wal - Mart , the women in the court brief say, there's not a lot for
them in the way of job advancement opportunities; at Club Slee-Z, too,
the divide between labor and management seems pretty deep and clear.

At Wal - Mart , the women say, what you get in the way of $$ depends on
what you've got in the way of XY -- the male chromosome. When one Wal -
Mart woman asked why her pay was lower than that of a less-qualified
male worker, she said she was told by her boss, an XY guy, "You don't
have the right equipment. You aren't male, so you can't expect to be
paid the same."

The brief is a piece of a larger argument that the court should make
this case a class action: a suit not just about the hundred or so women
whose declarations and depositions it details, but about the million and
a half women who've worked for Wal - Mart in the last five years -- a
lawsuit that could put an eight- or nine-figure dent in the fortunes of
the Fortune 500's No. 1 firm. A quarter-trillion dollars passes every
year through the cash registers of the nation's largest private
employer, which began as Sam Walton's little Arkansas five-and-dime.

Wal - Mart has certainly grown, but when it acts like the nation's
retail pulpit, it seems like it hasn't completely grown up.

It refuses righteously to sell naughty magazines or oversexed video
games -- but the court brief says that some of its men-in-charge think
of pole-dancing as suitable business entertainment, and expect the women
who work with them to sit there and enjoy the show.

Wal - Mart refused to carry an issue of Life magazine showing a naked
mother breastfeeding her baby -- but the lawsuit says some of its male
managers' idea of a great place for a bas-cuisine business dinner is

Wal - Mart has barred from its bins some CDs it finds offensive, and it
has snipped obscene words and sexual images from CDs it does sell -- but
the lawsuit says some of its male managers have no problem calling their
women colleagues "girls" and "little Janie Qs."

Wal - Mart stocked and then stopped selling the Kathie Lee Gifford line
of clothing, which in 1996 turned into the designer label for the
scandal of exploited overseas sweatshop labor -- but according to the
brief still has no problem paying thousands less a year to women than to
men doing the same job.

I wonder whether Dixie Chicks CDs sell for less than Garth Brooks CDs
-- if Wal - Mart is stocking anything by those un-American Dixie dames
at all these days.

April has not been kind to Wal - Mart in California.

There's this court brief released yesterday.

And at the beginning of the month, Wal - Mart stores across California
stopped selling guns altogether, temporarily, after Atty. Gen. Bill
Lockyer found that Wal - Mart clerks broke the state's gun law nearly
500 times, selling guns to convicted felons and letting buyers have guns
before the 10-day waiting period had run out.

Wal - Mart , the nation's biggest seller of just about everything,
including guns, promises it'll retrain its employees -- "associates" in
Wal-Speak -- on the law. Too bad it evidently didn't do the same for
some of its managers.

A Wal - Mart spokeswoman, Mona Williams, denied pervasive bias and
disputed the allegations.

A woman vice president, who has since departed Wal - Mart 's premises,
had the nerve to complain when the front ranks of the men leading Wal -
Mart 's Sam's Club stores would slang around the terms "girls" and
"little Janie Qs" in their weekly executive meetings, to speak about
their employees.

When she complained, she got warned not be so overly judgmental.

Yeah, honey, lighten up. Have a little respect. For all you know, these
fine men learned everything they know at the U.S. Air Force Academy.

Patt Morrison's columns appear Mondays and Tuesdays. Her e-mail address
is patt.morrison@latimes.com


Testimony from women is gathered to                   make the case for a class-action suit.

By Lisa Girion
Los Angeles Times

April 28, 2003
Female managers of Wal-Mart Inc. were required to attend strip clubs
with male colleagues on business trips, according to a brief to be filed
today in federal court for a group of California women suing the
nation's largest retailer for job discriminatio n.

The women's declarations also say they had to take business meetings at
Hooters, a restaurant where food is served by amply endowed women clad
in tight shirts.

And the top brass of Wal-Mart's Sam's Club stores referred to female
employees in weekly executive meetings as "little Janie Qs" and "girls,"
even after a woman vice president complained. The executive, who no
longer works at Wal-Mart, said her complaint earned her a warning
against being overly judgmental.

The testimony was collected to support a request that the case proceed
as a class action on behalf of more than 1.5 million women employed by
Wal-Mart since late 1998. The proposed class dwarfs the size of other
employment discrimination cases and, if approved, would make the suit
one of the largest against a corporation.

The brief, which comes 17 months after the suit was filed in U.S.
District Court in San Francisco, paints the most detailed picture yet of the scope             and effect on women of the alleged discrimination. It argues
that a gender pay gap ; which plaintiffs' experts say averages
about 5% throughout the company ; is a reflection and result of a
culture of bias that flows from Wal-Mart's Bentonville, Ark.,
headquarters and permeates nearly every store.

Wal-Mart spokeswoman Mona Williams denied any pervasive bias within the
company and disputed the plaintiffs' analysis of the evidence.

She said that experts who analyzed payroll data for the company found
that "nine out of 10 times, women and men are paid equally," and that
women are promoted at a rate consistent with the rate at which they
apply for positions.

"We feel there is room for improvement with the pay, but from a
promotional standpoint, it's absolutely fair," Williams said.

The 61-page brief filed by plaintiffs pulls testimony from more than
100 depositions of executives and the voluntary declarations of 110
female employees. In them, some women described being discouraged from
applying for management positions and jobs in sporting goods, meat
departments and other areas dominated by men.

Others recalled instances where male managers not only acknowledged but
endorsed a pay gap between men and women.

One woman quoted in the brief said she asked why her pay was lower than
a less qualified male worker. Her department manager's reply: "You don't
have the right equipment. You aren't male, so you can't expect to be
paid the same."

Brad Seligman, a lawyer for the plaintiffs, said the attitude conveyed
in the comment is not an aberration.

"We've got more than 100 declarations from 30 states," said Seligman,
director of the Oakland-based Impact Fund, a legal advocacy
organization. "It's not just a problem in the Deep South or Alaska. It's
a constant story that we hear all across the country, and it's consistent with what the numbers show."

Plaintiffs contend that male managers frequently tap male subordinates
for the unposted jobs, leaving women out of the loop.

Williams said that can no longer happen. The company began posting
entry-level management positions for the first time in January. She said
Wal-Mart's focus on growth had precluded it from requiring such postings
until then. Wal-Mart also is rolling out companywide guidelines that
would remove some subjectivity from pay raises by basing them on
performance evaluations, she said.

"We will be implementing quarterly reports to make sure that men and
women are paid equally and are promoted at equal rates," she said.

Until recently, Williams said the company has left hiring, pay and
other employment responsibilities largely up to store managers. If there
is truth to any of the allegations of bias, Williams said, such  instances would be the fault    of individual managers whose behavior did not reflect the intent of the corporation.

"The entire company is very decentralized," Williams said. "Store
managers run their stores. They have an awful lot of autonomy to make
the right decisions for their stores. Sometimes they've made the wrong
decision, but there is absolutely no basis for any kind of systemwide
discrimination at Wal-Mart."

Williams said the declarations filed by women in support of the suit
amount to a tiny fraction of the 700,000 women currently employed by the

"They are exceptions, and we cannot afford to be judged by these
exceptions," Williams said.

The plaintiffs portray the company as a retail empire tightly
controlled by headquarters, which uses state-of-the-art technology to                              regulate everything from the temperature to the music inside stores.

 "But when it came to looking at disparities in pay for women and even,
to a great extent, the absence of women from management, they showed a
remarkable lack of curiosity," said Joseph M. Sellers, a lawyer with
Cohen, Milstein, Hausfeld & Toll in Washington, who is representing the
plaintiffs. "For a company that makes a penchant, and indeed relies for success,                 on closely  monitoring every aspect of activity in its stores,
its lack of interest or curiosity is telling."

The plaintiffs are seeking back wages equivalent to what they believe
they would have earned were it not for the alleged bias. They also are
seeking compensation for promotions allegedly lost because of

Lawyers for the plaintiffs said they had not calculated the possible
damages. But, if the case becomes a nationwide class action and any
liability is found, they could add up quickly. In the largest settlement
of such a case, Voice of America agreed three years ago to pay $531
million to 1,100 women rejected for jobs at the former U.S. Information

 Wal-Mart is scheduled to file its brief in opposition to the class
 action in early June. A hearing on the class question is set for July.

For Wal-Mart, New Orleans Is Hardly the Big Easy

April 27, 2003


WHEN a local developer announced triumphantly that a new Wal-Mart would
rise here on a sandy patch of earth along the Mississippi, it was
presented as a good thing, a bit of progress that would bring in
much-needed tax dollars and jobs and transformation where the rundown
St. Thomas public-housing project once stood.

But along the way, someone overestimated the willingness of other New
Orleanians to accept the advance of Wal-Mart across their turf. And one
result has been a foul gumbo of accusations against everyone from the
developer, once considered an urban hero, to the federal government,
which made the grant that set off the fireworks in the first place.
Themes of jealousy and betrayal have sounded over financing that gives
the developer and Wal-Mart Stores — which wants to put up a
200,000-square-foot store plus a parking lot — unusual benefits.
Lawsuits have been filed to block construction on behalf of the
environment, the fabric of the city and the rights of the former
residents of St. Thomas.

The back-and-forth, which began two summers ago, has been so intense
and, in many ways, so particular to this place — the stage version
could be called "A Streetcar Named No Thanks" — that the store is now
more than a year behind schedule.

The struggle here is taking place as many of the country's big
retailers, companies like Costco Wholesale and Home Depot as well as
Wal-Mart, are reaching beyond their usual locations for growth. After
saturating rural areas and edging into the suburbs, they are
experimenting with ways to fit large stores into vacant inner-city
acreage. It's not an illogical strategy, but as Wal-Mart is finding, the
going can be rough.

"Nobody on the side against Wal-Mart is against jobs or against housing
or against retail," said Neil Alexander, a photographer who has been a
vocal opponent of the store. "What a lot of us are against is poor
planning or no planning, and selling the city short to the largest
corporation in the world."

Finding dozens of acres of empty land inside any city can be difficult.
In New Orleans, close to half the land for the proposed Wal-Mart
originally belonged to the housing authority, which received a federal
Housing and Urban Development grant through a program known as HOPE VI
to replace the aging St. Thomas complex. Its 1,500 apartments, built in
the 1930's and 1940's and bulldozed in 2000, once held nearly 2,000
people, most of them African-American and poor.

THE site, near the city's landmark Garden District and a recently
revived section of Magazine Street, covers 64 acres, nearly all of which
is empty for now.

The original plan was to build a new development in which apartments
would be split evenly between the poor and the middle class. The
residents of the St. Thomas apartments were moved out and helped to find
new housing; many of them expected to move back, their advocates say.
Now, a HUD spokeswoman says, there will be 182 public-housing
apartments, an additional 272 apartments considered "affordable" and 784
more that would be sold or rented at market rates — making the
original residents of St. Thomas a minor element in the project.

"They have been treated like a crop on the plantation," said Camille J.
Strachan, a tireless opponent of the plan, whose law office is two
blocks from the edge of the St. Thomas site and whose house is decorated
with a large banner that reads: "No Sprawl-Mart."

Wal-Mart became involved at the invitation of the developer, Maurice
Pres Kabacoff, whose company, Historic Restoration Inc., is based in New
Orleans and has won awards from preservation groups.

He made the store the linchpin of his plan, and to make it work, the
St. Thomas project now includes an assortment of public financing
arrangements, like $20 million in bonds backed by sales tax collected
from Wal-Mart for construction of upscale apartments. The arrangement is
known as tax increment financing, or TIF, and New Orleans never had it
until this project, said Sidney J. Barthelemy, a former mayor who is now
a vice president at Mr. Kabacoff's company.

An additional $28 million in tax-free bonds will be issued by the state
Industrial Development Board to cover the costs of building the
Wal-Mart, enabling the retailer to borrow money and essentially repay
itself, said Trey Langus, another vice president. Finally, a similar
bond issue, worth up to $29 million, will finance additional
construction of apartments on the site, Ms. Strachan said.

Such largess leaves other business owners in the city irate. "There are
huge concessions being made to Wal-Mart, the richest company in the
world, that are not being made to other businesses," said Barry
Schlaile, who operates a lighting store not far from the site and has
tallied the number of stores in the area — 45 out of 67 — that he
thinks may lose sales to the Wal-Mart.

Michael M. F. Liu, the assistant secretary for public and Indian
housing at HUD, said HOPE VI grants — the acronym stands for Housing
Opportunities for People Everywhere — were intended to combine
commercial and residential development. The idea is to bring residents
of various incomes together, instead of segregating the poor.

"The commercial aspect is always a key part of the financing," he said.
"It is very much a part of the norm."

The grant for the St. Thomas rebuilding was $25 million, but "you
needed $30 million before you could build a single house," Mr. Kabacoff
said, citing demolition and other expenses. He sought large retailers
for the site, approaching Lowe's, Home Depot and Target before he got to
Wal-Mart. When its executives said they would do it, "as long as you let
us put our grocery store and our regular store there," he said, "I got
down on my knees and kissed" the ground on which they stood.

The Wal-Mart does have some local support. The mayor, C. Ray Nagin, has
refused to block the plan, and Bart Stapert, a lawyer who represented
the St. Thomas tenants during negotiations with the developer, said his
clients backed the Wal-Mart as a last resort. "We struck a deal that
there would be 240 units on the site and 100 off site," he said. "In
exchange for what we thought was a guarantee, we agreed to support the
Wal-Mart. Some residents personally supported it because of the jobs.
Others said, `These are not the greatest jobs in the world.' " The
guarantee evaporated, he said, while the Wal-Mart plan remains.

At Wal-Mart, the urge to conquer the New Orleans interior represents a
revision of the strategy — a kind of commerce oblige — that has made
the 41-year-old discount chain the dominant force in retail. "The
company started in rural areas and the reason was that people in those
areas did not have access to goods that other people did," said Daphne
Moore, a community-affairs liaison for the company, which calculates
that the St. Thomas store will do $100 million in sales a year, based on
current sales at other Wal-Marts nearby. "It's also true in these urban
areas. The individuals who choose to live in the core of the city don't
have the same access to goods and services that their counterparts in
the suburbs and small towns have. It's an interesting shift."

Design changes have been made to accommodate local concerns. Instead of
the usual blue and gray exterior, the store will use a brick-colored
material, Mr. Langus said. The parking lot, for 850 cars, will be shaded
by trees; one street has been widened, although some people in the area
say they remain concerned about traffic buildup.

Among them is Don Everard, a soft-spoken former St. Thomas resident who
is the director of Hope House, a nonprofit social services agency in the
neighborhood. He moved out of St. Thomas several years ago, into a small
house nearby. He expects that more traffic will roll past his front
porch because of the Wal-Mart, but he says other people in the area are
excited about shopping there. "Most people are viewing the Wal-Mart as
inevitable," he said. "My biggest gripe about the whole deal is the use
of the $20 million TIF to pay for market-rate housing when the city has
such deep trouble finding money for low-income housing. As a political
decision, that is so unfair."

Some opponents criticize HUD as failing to oversee the development. The
Greater New Orleans Fair Housing Action Center, an advocacy group, filed
a complaint this month with HUD that accuses the agency of mishandling
the relocation of the St. Thomas residents. The agency is reviewing the

IN the beginning, the residents had representation," said Stacy
Seicshnaydre, the center's general counsel. "But as time went on, their
voices became more and more drowned out." She said she was concerned
about the small number of former St. Thomas residents who would be able
to move back, citing the lower-than-expected number of apartments as
well as criteria that prospective tenants must meet — like incomes
within certain levels.

Mr. Liu, the HUD official, said the HOPE VI program, which began in
1992, was left out of the current federal budget. The agency will assess
the program in response to complaints, including the ones echoing from
New Orleans. "We are sensitive to those who have raised questions about
the number of replacement units," he said, adding that current projects
had higher requirements. "This program was only authorized for 10 years,
and we think it's a reasonable time to look at all these issues."

Mrs. Moore of Wal-Mart said the company had not built stores as part of
any other HOPE VI development. "We're not really involved in HOPE VI
except to the extent that the tax revenue from our store will help fund
that project," she said. "We are not the social engineers on this one.
We're simply a means to an end."

But the company has opened stores in other cities, including Baltimore
and Philadelphia. A plan to open a store in Dallas was rejected not long
ago by the City Council.

Mr. Langus, who oversees the project for Historic Restoration and is
Mr. Kabacoff's son-in-law, called the HOPE VI program "atrocious,"
adding: "I have no interest in doing another one."

In the initial HOPE VI plan for St. Thomas, small-scale stores would be
built to employ neighborhood residents. Like the initial goals for the
apartment mix, those stores are no longer part of the plan. "Pretty much
everything has been flipped over," said Mr. Everard at the Hope House
social services agency. "You almost expect developers to behave in a way
that lets them make as much money as they can. But you also expect there
will be people who will be watchful for the other side."

Merchants in and around the site are quivering at the prospect of
having to battle Wal-Mart. Mrs. Moore, however, says the customers are
not the same, and Mr. Kabacoff contends that people who travel to the
Wal-Mart will also shop at smaller stores nearby.

The biggest losers are likely to be grocery stores. Already, a
carefully negotiated plan — mediated by Mr. Kabacoff — to build an
Albertson's supermarket in another historic neighborhood fell apart
after the Wal-Mart plan became known.

Controversies have arisen in other parts of the country over the
perception of favors granted to large retailers. The Institute for
Justice, a nonprofit group in Washington, has defended business owners
whose property was seized by local governments through what is known as
the power of eminent domain, and then turned over for large chain
stores. "It is an all-too-common tactic," said Dana Berliner, a senior
lawyer for the institute, adding that the practice has escalated in
recent years.

At Costco, a shareholder called on the company this year to avoid
building on such land. But James D. Sinegal, the chief executive of
Costco, said, "In many instances, when we look for land, these are the
only places we can find it in these communities."

To Mr. Kabacoff, the future — not to mention the present — is
obvious. "You've got to pay attention to the real world," he said.
"Americans have decided they want discount shopping in volume, and
that's the real world."

Others say that the vitality of New Orleans depends on its various
charms, and that large-scale retail isn't one of them. "I can't imagine
someone coming to New Orleans and having to see a Wal-Mart right there,"
said Val Dansereau, the president of the Preservation Resource Center, a
nonprofit group that has led the charge against the store. "New Orleans
is known for its old buildings and its quaintness."

AFTER simmering so long, the situation in New Orleans has begun to
attract attention outside the city. John P. Relman, a Washington lawyer
who specializes in civil-rights issues, says he has been trying to get
detailed information about the size of the apartments that will be
available for low-income housing. He said he might sue on behalf of the
former St. Thomas residents if the developer did not provide him with
that information, adding that he was worried that families with children
might be shut out of the new complex..

"It's this, far more than any historic or development concerns, that is
likely to shut this down," Mr. Relman said. "It is basically race
rearing its ugly head again in a Southern city."

Others see racial discrimination elsewhere. Mr. Barthelemy, the former
mayor, said he thought complaints about the Wal-Mart were merely a
subterfuge for derailing the whole development. "There are some in the
area who don't want affordable housing," he said, "because it means
minorities coming back into the area, and a lot of minorities do shop at

William E. Borah, a lawyer active in preservation issues, said his
concern was what he called the broken promise to the people of the
development. "It is a disgrace," he said. "It's supposed to be about
public housing. But now it's about for-profit housing, and they are
throwing in a Wal-Mart. It's a scandal of national proportions."

Mr. Kabacoff says he and his Wal-Mart aren't going anywhere. "We never
quit," he declared. "That's what the preservationists didn't realize."

"This is going to work," he added. "And it's going to be a wonderful
model for the country."


April 25, 2003 3:03 p.m. EDT

Wal-Mart To Pay $750,000 Civil Penalty, Govt Agency Says

WASHINGTON -- Retailer Wal-Mart Stores Inc. (WMT) has agreed to pay
$750,000 to resolve charges it failed to report exercise equipment

The Consumer Product Safety Commission said Friday the civil penalty
resolves a lawsuit filed in May 2001 by the Justice Department on behalf
of the safety agency.

In the suit, the government charged Wal-Mart with failing to report
safety hazards associated with exercise gliders it sells.

"This case demonstrates that retailers, like manufacturers, importers,
and distributors, are required to report consumer product defects and
injuries to the Consumer Product Safety Commission in a timely manner,
and that there are penalties for those who fail to do so," said Hal
Stratton, the commission chairman.

"Prompt and timely reporting by companies will allow us to act swiftly
to protect consumers from injuries," he said.

Under the law, manufacturers, distributors and retailers must
immediately report product hazards to the CPSC.

The government charged Wal-Mart failed to report hazards with Weider
and Weslo brand exercise gliders, despite knowing of at least 29
consumers injured while trying out the gliders in Wal-Mart stores across
the country.

"The injuries included fractured vertebrae, herniated discs, and a
compression injury to a woman's spine," the CPSC said.

The regulator says the lawsuit and civil penalty settlement represent
the first time a retailer has been sued and paid a penalty for failing
to report a safety problem where the retailer was not also an importer
or private labeler.

Under the settlement, Wal-Mart also agreed to establish internal
recordkeeping and monitoring systems to keep track of information about
product safety hazards, the CPSC said.

A Wal-Mart spokesman couldn't immediately be reached for comment.

-By Jeff Bater, Dow Jones Newswires; 202-862-6616;

Asked why the retailer settled, Wal-Mart spokesman Bill Wertz said the
company shares the goal with the CPSC of product safety.

Wertz also said it wanted to avoid the costs of a trial.

"We acknowledged no wrongdoing," he said. "We believe we acted
responsibly in this case."

-By Jeff Bater, Dow Jones Newswires; 202-862-6616;




The Columbus Dispatch
Home Final
Page 12A
(c) Copyright 2003 Columbus Dispatch. All Rights Reserved.

A response is needed to the April 11 letter from Paul Harris regarding
Wal - Mart . As the president of a corporation that has sold countless
deals to Wal - Mart , I can say that its "Buy American'' campaign in the
early '90s has turned into, "If it's made in America, quickly reproduce
it in China.'' The store's buyers won't talk to any distributor who has
opportunistic deals (closeouts).

Is there credibility to the well-circulated idea that when Wal - Mart
enters a small city, it lowers its prices to the point of losing money
to put the local business under? I've seen it. There has been no
downturn in our economy, no odd business trend or any other malady that
has put more local, regional and national chains out of business than
Wal - Mart has.

Ask any single mom how well she likes it when she is forced to go to
just one store because no competitors exist to compare prices. No
studies in Discount Store News , Housewares Daily , etc., have ever
shown Wal - Mart to have the lowest prices. When that single mom loses
her job to the Asian market that supplies the only retailer in town, see
how happy she is.

Marketing International Inc.



Labor Board Judge Rules Retail Giant Illegally Tried to Silence
Workers. Wal-Mart Ordered to Remove Anti-Union Language from Benefits Materials

    (Kingman, Arizona) - Wal-Mart will be forced to reinstate yet
another worker with full back pay and to notify its one million
employees nationwide that it had committed an unfair labor practice as a
result of a decision by an administrative law judge for the National
Labor Relations Board (NLRB).

    Judge Gregory Z. Meyerson ordered Wal-Mart to rehire Brad Jones
in the retail giant's Kingman, Arizona, Tire and Lube Express (TLE)
department.  Jones was fired on February 28, 2002 in retaliation for his
efforts to organize a union.

    A majority of the "associates", as Wal-Mart calls employees,
working in the TLE at the Supercenter had signed union authorization
cards for United Food and Commercial Workers Union (UFCW) Local 99 to
give them an organized voice on wages, health benefits, scheduling and
working conditions, and the NLRB had set a secret ballot union
representation election for August, 2000.

    The NLRB blocked the election, however, due to Wal-Mart's
systematic intimidation and other illegal tactics against its workers.
But the company's campaign against the union supporters didn't end.
Jones, one of three leaders in the union effort at the store, was a
"marked man," according to the ALJ. 

    The judge found that Store Manager, Jim Winkler, had targeted
three outspoken union supporters by directing supervisors to hold them
to a higher standard and "wait for them to screw up."  Two left and the
third, Jones, was singled out by management.  Jones was fired two days
after receiving a good yearly performance review which included a 4%
wage increase. 

    During the campaign, the judge found that Wal-Mart illegally
monitored workers by placing a new manager in the department to carry
out illegal surveillance on the workers' union activities.  The manager,
who had no experience in an automotive service unit was unable to work
alongside the TLE employees as the job required. 

    The judge also found that Wal-Mart failed to enforce its
non-harassment policy against  an anti-union worker who was harassing
two union supporters.  The victims suffered from their colleagues'
harassment about their weight and religious beliefs.  Despite several
appeals to management to protect the victims, Wal-Mart refused to
enforce its policy, although one Bentonville executive insisted the
company takes "complaints of harassment seriously."

    Wal-Mart's illegal tactics in Kingman, Arizona exposed further
illegal threats to workers across the country.  The company's "Associate
Benefits Book" which outlines eligibility for various benefits expressly
stated that associates represented by a union are not eligible for
benefits.   The Judge ordered that Wal-Mart reprint and amend its
benefit book to reflect that union-represented workers' benefits are
determined through the collective bargaining process and that
union-represented workers will remain eligible for benefits during

    Wal-Mart is also required to post notices in every location
admitting its violations of the law and promising not to discriminate
against union-represented workers.  The ALJ decision in Kingman is the
first time Wal-Mart has been ordered to make a national remedy to its
illegal anti-union tactics.

Copies of the NLRB complaints are available on www.ufcw.org


Growing Pains
By ANDY LENDERMAN | For The New Mexican 

TAOS-The Wal-Mart fight boils down to jobs. And three votes.

Developers promise new jobs, workers to operate the biggest business
building in Taos County history.

Opponents say 180,000 square feet of groceries, tires, motor oil and
merchandise will destroy most jobs with good wages and change the
county's historic character forever.

It's a battle over the future direction of Taos County, both sides

agree. It's about who can afford to live here, and who can't.

The population here continues to grow despite a high unemployment rate
of 10 percent, increasing land prices and water limitations.

Whether these newcomers will shop at a Wal-Mart Supercenter is a matter
that could be decided very soon.

The plans are ready and zoning changes necessary to allow such a big
store have been prepared. Three votes on the Town of Taos Council can
approve the zoning change. Or three votes against Wal-Mart could enforce
a county growth plan that clearly supports small businesses over chain

The council will discuss the matter Jan. 23, more than three years
after it denied Wal-Mart an expansion permit the first time.

"It's going to be wrong to a lot of people," Town Councilor Bobby Duran
told the Hispano Chamber of Commerce last week. "That's just the way
things are."

Today, The New Mexican looks at a Wal-Mart Supercenter through the
people who have a lot to win, or lose: small businessmen and developers,
union workers and Wal-Mart managers.

La Gente for Wal-Mart

Moises Martinez is a Taos businessman backing the Supercenter because
he wants Taos natives to have a place to work when they grow up. He says
too many people are forced to leave the valley.

"Times have changed and we want to welcome some kind of industry here
for out kids, and for the future," said Martinez, who operates a ski

Wal-Mart is "a good clean industry," he said, and can serve as a magnet
for Northern New Mexico shoppers.

He criticized many retirees and "trust-fund people" who move to the
valley and value a historic environment at the expense of economic

That development involves Cunnyngham Properties, LLC, the company that
owns about 24 acres at the southwest corner of N.M. 68 and N.M. 585,
according to court records. That's where the proposed Supercenter would
be built, according to Martinez's group, La Gente for Wal-Mart.

Marcia W. Cunnyngham, a company trustee, said she's not developing the

"There is a third party who is involved who has leased the land from us
and is working with Wal-Mart," Cunnyngham said. She declined to

Wal-Mart would likely lease the property, said Jaime Chavez, a lobbyist
and point man for Wal-Mart supporters.

It's unclear what would happen to the current Wal-Mart building a few
blocks north, which houses about 75,000 square feet of general

The new store would cost $18 million to build, and that, too, creates
Taos area jobs, Chavez said.

Chavez has been pushing the Wal-Mart issue along with Ramon Trujillo, a
former boss of the Taos County Democratic Party. When asked if he was
being paid for his services, which includes several months of petition
gathering, Trujillo declined to comment.

Chavez said he was not being paid by Wal-Mart, and said his contract
prevents him from discussing any other details.

"When people feel passionately enough about something, they open their
pocketbooks," Chavez said.

Chavez is a former lawyer from Taos who was disbarred by the New Mexico
Supreme Court on May 10, 2000, according to court records. Chavez
violated several professional standards, including allegations he
mishandled his clients' money, according to court records.

"This has nothing to do with Wal-Mart," Chavez said. He said he plans
to reapply for his license this year.

Still, Chavez made a presentation last week to a tough crowd at the
Taos County Hispano Chamber of Commerce.

The idea that local businesses will be steamrolled by Wal-Mart is not
true, he said.

"Sales increase because the Wal-Mart Supercenter adds more traffic to
the local markets," Chavez said.

He also defended the company's labor record, often blasted by

As the nation's largest private employer, with 1.3 million workers,
only one of 3,300 stores is unionized, he said.

"Wal-Mart is not exempt from the National Labor Relations Act," Chavez
said. "... They treat their employees fairly, and the need for a union
doesn't exist."

Employees are counted as full time at 28 hours a week, he said. That
statement was greeted with laughter from some in the group.

Darrell Cordova

Darrell Cordova joined the United Food and Commercial Workers union in
1979 as a 16-year-old carry-out kid.

Now, at 39, he owns land, good vehicles, and helps a daughter at The
University of New Mexico. Union wages at his grocery store mean
everything to this native Taoseño: "You can afford to have a family." He
makes close to $20 an hour, which includes benefits.

Observers say a new Wal-Mart grocery store will kill one, maybe two of
the three grocery stores in Taos: Smith's, Raley's or Super Save.

If that happens, union jobs and another piece of America's shrinking
middle class go with it, Cordova says.

Cordova, like other Wal-Mart fighters, has numbers: For every two
Wal-Mart jobs, he said, three good ones must be eliminated from the

Cashiers at union stores make about $30,000 a year; Wal-Mart workers
make $11,000.

The difference means Cordova can buy land to pass onto his son, he

"It's very rare," Cordova said. Many families pass on land from
generation to generation, and are unable to expand their holdings, he

The fight rests with the Town Council's four members and Mayor Fred
Peralta, he said. Despite being appointed to a state position, Peralta
hasn't resigned yet and could be in office when the approval comes up.

"They're holding everything in their hands and they know it. They're
literally the judge and jury of the whole situation."

Judy Vigil

She earned two promotions in six months at Wal-Mart, and Judy Vigil
says hard work can pay off here.

Vigil, 30, is full of peppy energy. She's the new customer-service
manager, overseeing the cashiers, handling problems and keeping an eye
on the front end of the always-busy Taos store.

"There's opportunity to move up and a lot of different jobs to check
out," said Vigil, who's worked at Wal-Mart twice before.

Associates, as they're called, are promoted based on performance, not
seniority, store manager Rob Cowgur said.

She was stuck in a job with less pay, working as a cashier at another
store, when Cowgur offered her a job at Wal-Mart.

Now, life is better. "I'm working good hours," Vigil said. "I'm with my
kids more. I have my weekends off."

Vigil declined to discuss her wages or benefits, which is Wal-Mart's
policy. Still, she said she's able to pay her family's bills more, and
plans to carry herself and two children on the company health plan later
this year. Wal-Mart pays two-thirds of the insurance plan, she said.

Her husband works for a local law enforcement agency and is covered
through his employer.

Vigil's promotion means she can watch her son's wrestling meets in
person now, with better hours.

"I was always watching it on video," she said. "And now I'm actually

Vigil wants to be promoted again, to a department manager, an assistant
manager or maybe a store manager. The company's rapid expansion creates
lots of opportunity, said Cowgur, a 29-year-old boss.

Vigil is looking forward to her kids working there, too.

"I believe this is going to be the last job that I have," she said.

Paul Martinez

Paul's Men Shop survived the first Taos Wal-Mart, which opened in 1986.
He carried clothes and merchandise for Taoseños then.

"I was pretty much local at the time," he said.

But Wal-Mart forced him to drop that approach and go tourist. Now he
sells nice wool shirts, fancy cowboy hats and expensive leather belts to
visitors cruising downtown Taos. You can find anything you need for a
Taos weekend here: ski goggles and rain coats, boots and souvenirs.

"I kind of lumped a lot of things into one, and it worked," said
Martinez, who's been open for 29 years.

But he doesn't want a bigger Wal-Mart, which will cut into the local
economy, he said.

"I think most small business people take care of their employees,"
Martinez said. "And they try to give them 40 hours ... We eat on a daily

The opposition to Wal-Mart now claims 80 small businesses as members,
said Jeanne Timber, a spokeswoman for Taoseños Against Wal-Mart
Superstore. They've got 3,200 signatures, are challenging the
supporters' claim of 8,000 signatures, and have enlisted the Western
Environmental Law Center for legal advice.

"We need to investigate the potential harmful impacts of big box
development on a small and largely rural community like Taos," center
director Mark Preiss said.

The group is interested in an economic impact study performed by a
third party. And Timber says the group will fight to slow down the
project, the announcement of which came as a surprise to many in late

"They're trying a slam-dunk to get this through that will profit a few
individuals," she said.


Sunday, Jan. 05, 2003
Can Wal-Mart Get Any Bigger?
(Yes, a lot bigger... Here's how)

The aisles are clean, the store is brightly lit, and "associates" in
red polo shirts provide friendly service to customers who flock there
for the low prices and the wide range of products offered. Throughout
the store the image of a kindly old man appears in posters and
photographs. His slogans and philosophy have been internalized by all
employees, and they can tell you the story of his long march from humble
rural roots to become a great leader.

And by the way, would you like us to skin that frog for you?

Welcome to Wal-Mart in China, where the late Sam Walton has a new
image: the Mao of retailing. There, as in Walton's home state of
Arkansas, having the right merchandise is paramount. So the store in
Shenzhen, just north of Hong Kong, is crowded with tanks of crabs, fish,
frogs and shrimp, which can be taken home wiggling or be expertly gutted
and cleaned on the spot. Wal-Mart's push into China?and Brazil and
Germany and deeper into California and New York?offers a hint of why the
world's largest retailer seems unfazed by this stinker of a holiday
shopping season. Wal-Mart's sales in stores open at least a year were up
only about 3% compared with the same period last year?at the low end of
its expectations. But many other retailers were hurt much worse.
Wal-Mart just keeps gaining market share, not only from bankrupt
discounter Kmart but also from grocers like Kroger, drugstore chains
like CVS and electronics sellers like RadioShack. Wal-Mart is mounting
an audacious expansion that could double its sales within just five
years, to $480 billion. Some of that growth will come in new markets
abroad, where 1,200 stores in nine countries already account for about
16% of the chain's total sales. But even more growth will be won as the
chain insinuates itself into more U.S. neighborhoods and invades more
product categories.

If you think Wal-Mart already sells just about everything, think again.
Think PCs, ceiling fans, more fashionable clothing, gasoline and even

"Their goal is to have a 30% share of every major business they are
in," says Linda Kristiansen, a retail analyst for UBS Warburg Equity

If there's no Wal-Mart store near you, just wait. If you shop at
Wal-Mart, expect your store to get bigger or a new store to open even
closer. The chain plans to expand from 3,400 U.S. locations today?half
of them in the South?to a nationwide network approaching 5,000 stores in
five years.

Wal-Mart has 1,300 Supercenters, many of them converted from standard
discount stores, offering everything from hardware to groceries and
drugs. In some areas, it is placing these 180,000-sq.-ft. monsters as
close as 5 miles apart. And in the spaces between, it's tormenting local
grocery and convenience stores with Neighborhood Markets (call 'em
Small-Marts). Wal-Mart is building its first urban Supercenter, in
downtown Dallas. And without fanfare it is testing used-car sales
alongside one of its Houston stores. "It's surprising how much room we
have for growth," says Robson Walton, 58, Sam's son and the company's
nonexecutive chairman. "I'm not trying to be flippant," adds Lee Scott,
52, Wal-Mart's ceo. "But simply put, our long-term strategy is to be
where we're not." Yet for Wal-Mart to get where it isn't is going to be
a lot harder than it was to get where it is. Even with sales expected to
grow to about $240 billion for the fiscal year that ends Jan. 31, price
wars in its grocery business narrowed Wal-Mart's profit margin to its
lowest level in four years. The company plans to fatten profits by
becoming more of a producer and even designer of its goods, especially
clothing. It's making blouses in China and towels in India that it
intends to sell everywhere from Berlin to Beijing and Boston. But
fashion is a notoriously fickle business.

And by diving deeper into the manufacturing of more of its products,
Wal-Mart is braving a path that has brought grief to some of history's
biggest retailers, such as A&P and Sears. Wal-Mart's centralization of
power at its headquarters in Bentonville, Ark., could produce agitation
among the managers of its stores, who have traditionally been granted
considerable independence in stocking what locals want. And consumers
get bored by one-size-fits-all merchandise. Says Ira Kalish, an analyst
for consultancy Retail Forward, in a mostly bullish report on Wal-Mart:
"Excessive size could breed bureaucracy as well as failures in the areas
of merchandising and customer relations."

Whether?and how?Wal-Mart meets these challenges will be of vital
importance to its customers, its 1.3 million worldwide employees, the
owners of its widely held stock and even the U.S. economy. According to
an independent study by McKinsey & Co., Wal-Mart's efficiency gains were
the source of 25% of the entire U.S. economy's productivity improvement
from 1995 to 1999. "When you become No. 1 and as big as we are, business
has a tendency to complicate if you don't do things to force yourself to
keep it simple," says Tom Coughlin, head of Wal-Mart's store operations.
As simple as keeping the right products in stock?a huge problem for
Kmart. And maintaining a smooth checkout system. "We call it Take the
Money," says Coughlin. What's the point of low prices if consumers can't
pay for their items quickly? Wal-Mart's operating mantra has been "a
store at a time," meaning that no one can manage thousands of stores; it
has to be done locally. Long before it was fashionable, Wal-Mart pushed
responsibility and information to the lowest ranks. Managers of
departments such as sporting goods or women's apparel still get detailed
reports of sales and profits in their areas, and they have a say in
which products are stocked. Store managers can still buy locally and ask
headquarters to adjust inventory of company brands that it has asked
them to stock. Coughlin says Wal-Mart will not stray far from the
locals-know-best model, even as more information and merchandise flows
through Bentonville. At headquarters, management focuses on the top 20%
and bottom 20% of its stores, as measured by sales and profitability. It
wants to know who has been naughty and who has been nice and why. The
rest are largely on their own.

Sam Walton used to visit all his stores using a propeller-driven plane.
Now it takes a fleet of 20 jets just to keep management in touch. Its
headquarters force, 10,000 strong, lately includes a group of artists
whose sole function is to design logos and labels and fulfill other
graphic needs. That's quite an indulgence for a company so comically
cheap that it still puts tin coin boxes next to its coffee pots,
demanding 10(cent) a pop.

Wal-Mart's Supercenters are able to underprice their supermarket
competitors about 15%, according to analyst Kalish, in part because they
are more efficient but also because the discount giant uses nonunion
labor. Wal-Mart matches the union pay rate in union markets, but the
average wage at Wal-Mart nationally is less than $10 an hour before
bonuses. The two most frequent complaints made by Wal-Mart employees to
Time?low wages and morale-killing store managers?recently factored into
a labor case the company lost in Oregon. A jury found Wal-Mart guilty of
requiring associates to work unpaid overtime?even locking them inside
stores. The company plans to appeal the verdict and says workers were
locked into stores only late at night, for security reasons. Some 40
other lawsuits are pending, most of which similarly accuse Wal-Mart of
requiring hourly employees to work "off the clock." Since September
2001, Wal-Mart also has been the defendant in 28 complaints brought by
the National Labor Relations Board (NIRB) over alleged antiunion
activities, including firing employees suspected of being friendly to
organized labor. "The company is dragging wages and benefit levels back
to 19th century standards," says John Sweeney, president of the afl-cio,
which is sponsoring an organizing effort at the company's stores.

That campaign has borne little fruit, in part because Wal-Mart's wages
are competitive with those paid by rivals such as Kmart and Target.
Wal-Mart offers health benefits, and its stock plan has been a wealth
builder for many lower-level employees, at least until the market
crashed. Still, Wal-Mart is regarded as offering ample opportunities for
advancement. Charlyn Jarrells Porter, who heads the Wal-Mart division
that deals with personnel issues, says two-thirds of its managers come
from the ranks of store associates, which is what Wal-Mart calls all
employees. This year the company will enroll 5,500 people in its
management-training program. "If the jobs are so bad," she asks," why
are so many people working for Wal-Mart?" The company denies any of the
wrongdoing alleged in the lawsuits and NIRB complaints and insists that
managers who violate policy are disciplined. Being viewed as a good
place to work is vital to Wal-Mart, because it will need to add some
800,000 employees in the U.S. alone over the next five years.

As it tries to leverage its size overseas, Wal-Mart may find it
difficult to export one of its biggest advantages. Its expertise in
managing high-volume inventory and supply networks doesn't work as well
in Europe and Asia, where the highway systems aren't as good and stores
typically are smaller. So Wal-Mart has to become better at buying,
reaching further back into the supply chain to purchase at the factory
such products as hardware and apparel that it now obtains from outside
vendors and importers. "We realized that, as we continue to expand
internationally, the need to leverage international and domestic buying
power was key, and the only way to do it effectively is to do it
ourselves," says Ken Eaton, who heads global procurement. The idea is to
buy goods universally for all stores where feasible, so the 20 locations
in Brazil can get the same price as the 3,400 Wal-Marts in the U.S. The
company ended its relationship last year with its longtime
outside-buying organization and hired hundreds of that firm's employees
to start rounding up fruit and salmon from South America and $6 billion
a year in goods from China?everything from clothing to televisions to
fans. Wal-Mart has opened 21 offices around the world to oversee its

By becoming contractor, importer and wholesaler, Wal-Mart expects not
only to save money on the buy but also to cut down on inventory by
speeding up the supply lines. Wal-Mart gets most of its towels from
India, and today it reorders once a month. If one pattern gets hot and
sells out early, sales are lost. In going direct, however, Wal-Mart will
make the factories in India part of its Retail Link system. That allows
vendors like Sara Lee (Hanes underwear, Bryan bacon) to dip into
Wal-Mart's computers and track sales and replenish supplies constantly.
By the same token, Wal-Mart will be held more responsible for these
factories' social and environmental policies. As the folks at Nike can
tell you, this carries its own risks.

Wal-Mart figures to take 20% of the cost out of procurement over the
next five years and improve gross-profit margins by nine percentage
points worldwide on general merchandise it buys directly. In retailing,
this figure is astonishing. Think about that $6 billion worth of goods
from China. Multiply by .09. Take to bank. Global sourcing can provide
the ammunition Wal-Mart will need to wage price wars against such
powerful retailers as France's Carrefour, Holland's Royal Ahold and
Germany's Makro. Each of these European companies got to foreign markets
long before Wal-Mart did. At ASDA, the British chain Wal-Mart bought in
mid-1999, the company was selling men's jeans for about $24 after paying
$14 per yd. for 50,000 yds. of material to make them. Then the buy was
moved to Bentonville, and the conversation went something like, "We'd
like 6 million yds., please.

Now what's your price?" Try $4.77 per yd. As a result, ASDA slashed its
retail prices in half and upped its annual jeans sales to 1 million,
from 174,000. ASDA is acquiring some 2,000 products from Wal-Mart's
global network and has become Britain's leading seller of kids' clothes.
The traffic is not all one way. ASDA's George brand of apparel is one of
the most popular private-label lines in Britain, and Wal-Mart recently
launched it in the U.S. "We're selling apparel anyway," says Claire
Watts, Wal-Mart's fashion boss. "Would it kill us to be a little more up
to date?" Designers from ASDA and from Wal-Mart headquarters now go on
trend-spotting trips together, an exercise associated more with hip
brands like Nike, and one that sounds perilously outside Wal-Mart's core
competency. Watts insists that her group isn't trying to move Wal-Mart
into haute couture. The focus is fashion basics at low prices.

When the team creates a new blouse, all the product
specifications?colors, patterns, fabrics?are controlled by Watts'
designers in Bentonville. Then Eaton's group tells the factories what
and how much to make. No samples have to be made and sent back and forth
across oceans because the company uses high-end computer color rendition
and printing. Changes can be made quickly. The motive is speed as much
as price. From the factories, garments can be sent to Newcastle,
England, or New Castle, Del.?and therein lies the trap. This kind of
centralization always makes sense in the beginning, when cost savings
are easy and the staff is lean. But history shows that the buying
organization eventually becomes bloated, as it did for Kmart, and tries
to force merchandise through the system whether or not local managers
and their customers want it.

Wal-Mart's expansion has gone well in Mexico, where it is the country's
largest retailer. And the company just completed a deal to crack the
Japanese market by acquiring 34% of Seiyu, a well-positioned but
struggling retailer. But Wal-Mart has stumbled badly in some countries,
particularly Germany. "We could write a training manual about our
experiences in Germany," Scott says. "We really did more things wrong
than right." There, Wal-Mart faces tough competition from
well-established chains, especially among grocers. The German managers
Wal-Mart brought on board through two mergers resisted American help.
"We've been trying to get the Germans culturalized; we bring them to
Bentonville," says John Menzer, head of the international division. But
Bentonville also had to learn a few things about Berlin. German shoppers
found Wal-Mart's door greeters appalling, and they regarded the ever
helpful clerks as an intrusion on their private space.

From Wal-Mart's point of view, it's the Chinese who have turned out to
be the best capitalists. At the store in Shenzhen, local managers hold
Ping-Pong tourneys, stage fashion shows and have clerks hawk products
like paper towels in front of a large display. And that's just on
Tuesday. The store even has its own fight song ("My heart is filled with
pride .. I long to tell you how deep my love for Wal-Mart is ...").
Wal-Mart is increasing this year, from 25 to 40, the number of stores in
China. The company introduced the Walton Institute, a program to teach
local managers the master's Three Basic Beliefs (respect for the
individual, service to our customers, and to strive for excellence), the
10-Foot Rule (always greet a customer when she gets within 10 feet of
you), the Sundown Rule (any employee or customer request must be
addressed before sundown) and other cultural foundations. In China's
three main cities, according to a McKinsey study, increasing wealth will
support 250 Supercenters among the competing retailers, each selling $24
million to $36 million annually. That's good. But a U.S. Supercenter
sells four times as much.

Walking into a Wal-Mart Supercenter in Fort Worth, Texas, CEO Scott
recalls that when Wal-Mart was an underdog, "you could really go after a
competitor." Now the company no longer shows comparison-shopping baskets
to demonstrate that Wal-Mart has lower prices than competitors. "It just
looks like we're picking on people," he says.

To be sure, Wal-Mart has to keep finding new people to pick on. Over
the past two years, Kmart filed for bankruptcy, and Ames and Bradlees,
once East Coast powerhouses, closed up shop. Wal-Mart is quickly adding
scalps in the grocery industry too, the venerable Grand Union among
them. Safeway, Albertsons and SuperValu have all slashed their earnings
estimates in the past few weeks. Before getting into groceries, starting
in 1986, Wal-Mart figured that a typical store needed a potential
customer base of at least 150,000 people. But add groceries, and more of
the available shoppers show up; each store needs a smaller area to
support it. So Wal-Mart can situate Supercenters less than 5 miles apart
in many suburban areas. It is also deploying a cut-down
grocery-convenience store called the Neighborhood Market between the
superstores. At the same time, Wal-Mart is adding merchandise
categories, such as gasoline, Linux computers and flat-screen TVs, in
which it can take prices down significantly. There's no escape. ceo
Although Wal-Mart's stores may look identical, the company is pinning
some of its growth prospects on the idea that what goes into them won't
be. Wal-Mart's next competitive weapon is advanced data mining, which it
will use to forecast, replenish and merchandise on a micro scale. By
analyzing years' worth of sales data?and then cranking in variables such
as the weather and school schedules?the system could predict the optimal
number of cases of Gatorade, in what flavors and sizes, a store in
Laredo, Texas, should have on hand the Friday before Labor Day. Then, if
the weather forecast suddenly called for temperatures 5 degrees hotter
than last year, the delivery truck would automatically show up with

The company calls the program the "store of the community." The
principle is as old as shopping: customers differ significantly
depending on where they live, what they earn and other factors. But the
differences are far subtler than anyone ever imagined. The company has
been analyzing every purchase made over the past 10 years, looking at
the relationships between the items people buy and hundreds of other
variables such as time of day and price. The data miners are constantly
searching for exploitable relationships?say, between sales of cameras
and atlases. Consider: a slow-selling line of chicken pieces was slated
for discontinuation at Sam's Clubs. But the software noticed that the
customers who did buy the product were huge spenders on other
merchandise. So the item wasn't necessarily a loser if it helped keep
those customers coming. One can think of Wal-Mart as a huge pipe organ
with thousands of stops that executives constantly pull and push. Early
on the day after Thanksgiving 2001, one of the busiest shopping days of
the year, the system was reporting slow sales of a boxed
computer-and-printer combo for which merchandisers had had high hopes.
But one location was bucking the trend. A quick call from headquarters
determined that the store manager had cut open one of the stacked
cartons so shoppers could see they got both machines for one price. Soon
a message went to all other stores: open a box. Sales began to move

Sell a buck. Save a buck. Repeat. It's that cycle of high-powered
logistics engineering and nickel-squeezing huckstering that remains
retailing's most potent weapon. UBS's Kristiansen sees no reason why
Wal-Mart, which has trounced the Dow over the past five years, will not
sustain 15% earnings growth. Scott, who earns less than most other
Fortune 500 ceos, was leaving a store not long ago when he stopped to
chat with one of the many senior citizens who work as greeters. They are
a fearless lot, and the old gent teased the boss with a question: "Did
you give everyone a big raise?" Scott returned a look of mock horror.
"Are you kidding me?" he said. "This is Wal-Mart!"

With reporting by William Boston/Berlin, Neil Gough/Shenzhen and Rita



     12/23/02 - PHOENIX - The U.S. Equal Employment Opportunity Commission (EEOC)
today announced it has settled a pregnancy discrimination lawsuit against retail giant Wal-Mart Stores, Inc., based in Bentonville, Arkansas, for $220,000 in damages and other relief for its failure to hire a female applicant due to her pregnancy.

     Under the Consent Decree filed in Arizona District Court (EEOC v. WalMart CIV 94-465 TUC WDB), Wal-Mart will pay nearly a quarter million dollars to Ms. Jamey Stern and engage
in comprehensive training concerning the Pregnancy Discrimination Act of 1978, in lieu of a further trial on the issue of punitive damages. The EEOC filed this lawsuit in 1994
alleging that Wal-Mart refused to rehire Jamey Stern at their Green Valley, Arizona, store because she told them she was pregnant in November of 1991. The litigation was subjected to
repeated trials and appeals before all issues were finally  resolved.

     According to the lawsuit, Ms. Stern was told by the Assistant Manager to "come back after she had the baby," after  informing him that she was pregnant. Ms. Stern was not aware that
refusing to hire someone because they are pregnant  is against the law until she read an article in a magazine in her doctor's office. She then filed a charge of discrimination with the EEOC and the Arizona Civil Rights Division. The EEOC investigated the case and filed the lawsuit on behalf of Ms. Stern after its efforts to reach a voluntary negotiated settlement proved futile.

     Mary Jo O'Neill , the Regional Attorney for the Phoenix District Office lauded the settlement, "Sometimes employers don't take pregnancy discrimination as seriously as other kinds of
discrimination. It is illegal to refuse to hire a woman because she is pregnant. This settlement confirms that the EEOC will not tolerate pregnancy discrimination."

     Ms. Stern, the charging party, said, "This 11-year struggle has proven that one person can truly make a difference and I owe a million thanks to many individuals at the EEOC for making
that possible. I am proud to have been a part of a process that has restored my faith in my determination to assert my rights, even in the face of such an adversary as Wal-Mart. I'm confident that many will benefit from this effort and become educated concerning their own rights and
 learn that they have the ability and resources available to assert and protect those rights."

     In 1997, a jury found that Wal-Mart intentionally refused to rehire Ms. Stern because she was pregnant. However, the  issue of punitive damages was not allowed to go to the jury in
that trial. The EEOC appealed that decision. The Ninth Circuit Court of Appeals sent the case back to the District Court to be retried on the issue of punitive damages, which are  money damages designed to punish the wrong doing employer and deter other employers from engaging in discrimination. The issue of punitive damages was tried to a jury in 2000, but again evidence pertinent to Wal-Mart's actions and to the question of punitive damages was withheld from the jury. The case was again appealed and the Ninth Circuit, which once more sent the case back to the District Court with explicit
directions that the jury was to be told that Wal-Mart fabricated a number of facts during the investigation and initial trial.

     Sally C. Shanley, the EEOC Trial Attorney remarked, "It is verysatisfying to be a part of this settlement as it sends a  message both to employers and employees that there is recourse for
discrimination in the workplace and that the Commission will persist in seeking justice."

     Charles Burtner, EEOC's Phoenix District Director, which has jurisdiction over Arizona and Utah, said: "We are very pleased with the resolution of this case. We take the Pregnancy Discrimination Act very seriously. The Phoenix Office of  the EEOC has seen a significant increase in charges of pregnancy discrimination over the last 10 years, mirroring a national trend."

     Under the Pregnancy Discrimination Act of 1978, which amended Title VII of the Civil Rights Act of 1964, employment discrimination on the basis of pregnancy, childbirth, or related medical conditions constitutes unlawful sex discrimination. In addition to prohibiting sex-based discrimination, Title VII
prohibits discrimination based on race, color, religion, or  national origin.

     EEOC enforces Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, and national origin; the Age Discrimination in
Employment Act; sections of the Civil Rights Act of 1991; the Equal Pay Act; and Title I of the Americans with Disabilities Act.Further information about the Commission is available online at http://www.eeoc.gov./


Widow v. Wal-Mart

      December 9, 2002 - Bangor woman sues after retailer collects life insurance on husband

      Three years ago, Michael Rice, a 48-year-old assistant manager at the Wal-Mart in Tilton, N.H., helped a customer bring a large television out to her car.

      On his way back to the store, he suffered a massive heart attack
and collapsed. Seven days later, Rice died.

      Wal-Mart collected at least $325,000 from a life insurance policy the company had taken out on him. His wife and two sons never saw a dime.

      Now Rice's wife, Vicki, is suing Wal-Mart. In court papers, she argues that the corporation did not have the right to insure her husband's life, and that the benefits the company received from his
death should rightfully go to her.

      "They used Mike terribly," Vicki Rice said from her new home in Bangor, Maine.

      "They abused him, working him like that," she said. "And then they go out and collect $300,000? It's very immoral."

      Corporations commonly take out life insurance policies on key officers and directors, but during the 1990s, Wal-Mart and other companies bought life insurance policies on hundreds of thousands of
lower echelon employees to take advantage of a tax loophole. Beyond the tax benefits, the insurance companies also collected a tax-free insurance payment when an employee died.

      Between 1993 and 1996, Wal-Mart purchased what the industry calls "janitor" or "dead peasant" insurance on 354,600 employees across the country.

      The arrangement was supposed to provide the company with substantial tax savings, according to a lawsuit Wal-Mart filed against the insurance companies earlier this year in Delaware. Wal-Mart borrowed money from the insurance companies to cover the cost of the premiums and
deducted the interest payments on its federal tax returns. The policies themselves also were considered investments, as their value increased over the lifetime of an employee. And, when an employee died, Wal-Mart collected the benefits.

      "It's essentially a high-stakes gamble," said David Slawsky, the Concord, N.H., attorney representing Rice. "They're investing $16,000 with some tax benefits that might turn into $65,000 or $300,000. That's a heck of a return, and it's a tax-free $65,000."

      Wal-Mart spokesman Bill Wertz denied that the company was gambling on its employees' lives.

      "The way it was supposed to work, we would benefit more if the employees stayed alive," Wertz said. "The benefits we received tax-wise offset the benefits that we received from a death."

      Ironically, Wal-Mart says it lost more than $150 million. In the Delaware lawsuits, Wal-Mart claims the insurance companies misled them about the financial benefits of buying the broad-based policies on their employees.

      Mike Rice worked for Wal-Mart for more than 10 years. He had owned a convenience store in Aurora, Mo., but in the late 1980s he decided he needed a bigger challenge, Vicki Rice said.

      He chose Wal-Mart because the company's headquarters in Bentonville, Ark., were nearby, and Sam Walton, the company's founder, was a local hero.

      Rice applied to Wal-Mart, and the company trained him as an assistant manager. He started out at a store in southern Missouri, but the company moved him around, placing him at stores in six states,
including Maine, over 10 years. Rice helped open the Palmyra, Maine, store in 1993, and was there for two years before being transferred to New York. In August 1998, Wal-Mart moved Rice to the Tilton, N.H.,store. He was earning $46,000 a year.

      By then, her husband had grown sick of the Wal-Mart life, Vicki Rice said.

      He was hired to work 48 to 52 hours a week but often put in 80 or 90. The stores were continually short-staffed. In the five days before his heart attack, Rice had worked an average of 16 hours a day, she said. When he collapsed, Vicki Rice had not seen her husband in three days.

      Rice now lives in an old Victorian house in Bangor with her 20-year-old son, James. She said her older son, Michael Jr., 29, who lives in Ozark, Mo., is a former Wal-Mart employee who was let go months after his mother won a workers' compensation case against Wal-Mart and was awarded survivor's benefits.

      Rice said she and her husband always loved Maine, and after his death she decided to return because of its tranquil setting.

      "After Mike died, I had very little family left," Vicki Rice said. "I didn't have any family after traveling around like a gypsy for 10 years."

      These days, Vicki Rice doesn't have a job, but said she commits up to 40 hours a week advocating for changes in insurance laws. She plans to devote the next two years fighting for regulations that force companies to disclose to employees when they take out life insurance policies on them.

      She spoke about Wal-Mart's insurance practices at a November rally in Portland, where numerous unions and nonprofit groups protested the retailer's labor practices. And she distributed fliers detailing her husband's plight to early-bird shoppers standing in line outside Wal-Mart in Bangor at 5:30 a.m. the day after Thanksgiving.

      Rice said she doesn't want to see what happened to her husband happen to others.

      At issue in the New Hampshire lawsuit is whether Wal-Mart had a substantial financial interest in the lives of its employees. The lawsuit was filed in U.S. District Court in Concord as a class action. So far the class includes Rice and Patricia Keenan of Dover. Keenan's husband, Bob, worked in maintenance for the Somersworth Wal-Mart, earning little more than minimum wage. When he died in 1995, he left his blind widow with two children to care for. Wal-Mart collected $69,000 on his policy.

      In all, Wal-Mart received death benefits on nine New Hampshire residents, a total of about $1 million, Slawsky said. Eventually, Slawsky wants to include in the lawsuit every employee for whom Wal-Mart purchased life insurance.

      Under New Hampshire law, a person or corporation must have an "insurable interest" in someone to purchase a life-insurance policy on them, Slawsky said. Between a husband and a wife, that interest is clear, as it is between a corporation and its directors, Slawsky said.

      In court, Wal-Mart will argue that it had an insurable interest in its New Hampshire employees, according to Wertz. When employees die, it costs the company to hire and train replacements, and the company loses the experience, Wertz said.

      It is an argument Slawsky has a hard time believing, given the company's high turnover rates. In one workers' compensation case, a Wal-Mart supervisor testified that the company has a 106 percent annual turnover rate, Slawsky said.

      "If they do lose more people than they hire in any given year, it's hard to imagine they had any real substantial loss if any of these people died," Slawsky said.

      But Wal-Mart also will argue that Georgia law, not New Hampshire law, applied; the trust Wal-Mart set up to purchase the insurance was based in Georgia. Company officials chose Georgia because state law specifically allows corporations to buy insurance on all employees, according to the Delaware lawsuit.

      So far that argument has not proved persuasive. Earlier this year, a U.S. District Court judge in Texas ruled in a similar lawsuit that Texas law, not Georgia law, applied there. In August, the judge ruled that Wal-Mart did not have an insurable interest in a distribution center employee who died in 1998.

      A judge is not expected to rule in the New Hampshire case for at least a year.

      In Maine, companies can hold life insurance policies on their employees but with certain conditions, according to Judy Chamberlain, deputy superintendent of the state Bureau of Insurance. If an employee dies, any money collected on those policies must be put into the company's pre- or post-retirement benefits programs and cannot be used to better the companies' bottom line through gains on investments.

      This weekend, the National Association of Insurance Commissioners will be meeting to discuss changes to corporate-owned life insurance policies, Chamberlain said. The group will be looking to make it mandatory for corporations to not only inform employees, but also to ask them first for their permission to take out a life-insurance policy, she said.

      "I think this is a step in the positive direction," Chamberlain said.

      If the association approves the changes, states such as Maine that are part of the national organization can adopt the new rule, she said.

      Wal-Mart no longer carries life insurance on broad classes of employees. In 1996, federal law changed, ending the tax benefits that had made the life insurance attractive. By January 2000, Wal-Mart had canceled all of the policies.

      In the Rice lawsuit, Slawsky argues that employees did not know about or consent to the life insurance policies, a claim that Wertz denied. Wal-Mart offered employees a free life insurance benefit as part of the program, Wertz said. Employees were told that their estate would receive $5,000 to $10,000 if they died, Wertz said. They could also opt out.

      "It's like offering you something for nothing," Wertz said.

      Wal-Mart ended the free life insurance benefits for employees in 1998, a year before Rice died.

      Bangor Daily News business writer Deborah Turcotte contributed to this report.

Sterling Wal-Mart Resells Donated Toys
National Headquarters Donates Toys To Make Up

December 5, 2002

STERLING, Colo. -- Toys that had been placed in a drop-off box for charity at a Wal-Mart store were put back on the store's shelves after a mix-up that frustrated organizers.

With 10 days left until the end of the annual Toys for Tots drive for the Logan County Chamber of Commerce, organizer Susan Kraich said she was back at square one.

"I've been keeping an eye on that box every time I went to Wal-Mart, and was so excited as it slowly began to fill. Over the weekend I heard that it was nearly full, so I went to pick it up. I was devastated when I found it empty," Kraich said.

Kraich said she complained to store management, but was told the store would only replace the items she knew for a fact were in the box. She left the store after replacing only three toys that she had purchased and donated to the cause.

"I don't know how I am suppose to prove what was in there ... I thought since Wal-Mart agreed to place the box, they were agreeing to keep an eye on it," she said.

Wal-Mart manager Brad Barritt said the Toys for Tots organizer he met, whose name he could not remember, was instructed that donated items needed to be wrapped in Wal-Mart bags to ensure the items had been purchased.

Kraich denied ever receiving any such instruction.

"There was everything in that box -- clothing, sporting goods, food items. My understanding was that the box would be emptied regularly. We had no way of knowing whether or not those items had been paid for," Barritt said.

He said the box was not visible from the store's security cameras, so there was no video proof that the toys were purchased.

As a result, he decided to place all of the items in the box back on store shelves to be resold.

Barritt noted that the retailer is a regular benefactor to area clubs and organizations, donating more than $50,000 annually. Wal-Mart even offered a $1,000 cash grant to Toys for Tots this year.

"Not that that has anything to do with this situation. Only to say that, as a corporation, we are very community minded. I'd hate to see a discrepancy over a few toys change that perception in the eyes of the public," Barritt said.

By late Wednesday, telephone lines were buzzing between Wal-Mart, its Arkansas corporate headquarters and the local charity.

Before the day was out, $425 worth of toys were delivered to the Sterling office of First America Cash Advance, where Kraich works.


 November 20, 2002 - MARTINEZ -  A coalition of labor, environmental, senior citizens and faith-based organizations will stage a demonstration on Thursday, October 21, from 4 - 6 p.m. at Wal-Mart's Arnold Drive store.  The demonstration is part of a national day of action against Wal-Mart called for by the United Food & Commercial Workers International Union.

           "We are expecting a number of activists from our sponsoring organizations," reported Barbara Carpenter, president of UFCW Local 1179 in Martinez.  Our demonstration co-sponsors include: the SF Chapter of the Sierra Club, Faith Works, Global Exchange, EarthRights International, Grey Panthers of California, Contra Costa County Central Labor Council and Building Trades Council," concluded the union mentor.

           The demonstration and its speakers will focus on Wal-Mart's unfair treatment of workers and their support of foreign manufacturers that run sweatshops to produce toys and other goods for the world's largest retailer.

            "Now that Wal-Mart has opened its global headquarters in Schenzen, China, they have the clout to bring about changes in the stopping violations of workers' rights in the hundreds of manufacturing plants supplying the goods sold in Wal-Mart stores.  Child labor, prison labor and military labor are providing the low-cost items Americans are buying at Wal-Mart.  The minimum wage for Chinese workers is 31-cents per hour; however, many children toil 10-12 hours a day for 13-cents an hour or less according to the National Labor Committee," said Carpenter.

             The unenforced labor laws on the books in China have long been a subject of great concern to human rights groups around the world.

             Environmental organizations have also pointed out the need for stricter laws for foreign manufacturers to protect the world's environment from unregulated pollution in third world countries.  Traffic, air, water and noise pollution have also been a concern of local environmentalists when it comes to the expansion of big box retailers, like Wal-Mart, in the Bay Area.

United Food & Commercial Workers Union, Local 1179

Contact Person:   Phil Tucker, Special Projects Representative

Telephone: (925) 228-8800; (707) 479-6000  (Cell) FAX: (925) 370-7305

             For further information on Thursday's demonstration contact UFCW Local 1179 at (925) 228-880


 Goal set by unions to crack Wal-Mart   Retailer called a wage depressor


WASHINGTON- November 19, 2002- Organized labor accused  Wal-Mart Stores Inc. on Monday of lowering wages and working conditions for millions of Americans, and it promised a vigorous attempt to unionize the retailer in coming years.
"This is a monumental campaign," John Sweeney, president of the AFL-CIO, said at a news conference in Washington. "It will probably be the largest organized campaign any union has undertaken in the history of our country."

Wal-Mart, the world's largest retailer, has steadfastly fought every attempt to unionize any of its work force. Labor's latest effort will begin Thursday with about 100 events in 40 cities - none in Arkansas. An event was defined as anything from a boycott to a talk with individual employees about their right to participate in a union.
Labor leaders said the campaign was necessary because Wal-Mart doesn't compensate its 1.4 million workers adequately. In turn, Bentonville, Ark., company's competitors and suppliers have to keep employee wages and benefits down, too, they said.

Wal-Mart spokesman Bill Wertz said the unions are wrong when they allege that executives and shareholders profit at the expense of employees. He said that, just like any company, Wal-Mart seeks good workers, and if it didn't provide competitive wages and benefits, it couldn't hire those workers.

"The test of whether you have a competitive plan is whether associates are willing to go to work for you," Wertz said "A lot of people come to us because of the pay and benefit package we offer, plus the unparalleled opportunity we offer for career growth and advancement. Seventy percent of management started out as hourly workers."

Wertz said that Wal-Mart's low prices are generated by many means, from an efficient distribution system to a no-frills headquarters in Bentonville, but not by shortchanging employees.

Labor leaders at the news conference disagreed.

Doug Dority, president of the United Food and Commercial Workers International Union, said the jobs that made America a working, middleclass country are almost gone. The jobs of the 21 st century most likely will offer low wages, no benefits and high turnover, and the jobs will more likely be at Wal-Mart than at any other company, he said.

"Wal-Mart is the largest employer. It is also the largest retailer, which makes it the largest buyer of goods and services," Dority said. "It will set the wage and benefit standards for the tens of thousands of companies that produce the goods that fill Wal-Mart's shelves.

"If Wal-Mart decides to go offshore for a shopping spree, American companies are forced to shift their production facilities offshore to meet Wal-Mart's shopping habits. If Wal-Mart buys in countries where child labor is prevalent, producers must shift investment in the pursuit of the lowest wages and the most easily exploited labor. "No one is immune from Wal-Mart or the corporate culture that it creates, a culture where a high-profit company can condemn workers to chronic economic insecurity."

Dority was one of eight speakers who equated Wal-Mart with the worst kind of corporate wrongdoers. The speakers missed few ways to portray what they described as Wal-Mart's greed.

Besides union representatives, two religious leaders and the president of the National Organization for Women participated.

One speaker was a former customer who described how bones in her neck and her back were broken because an employee dropped two 25-pound boxes on her head. She said the company fought her at every turn in her efforts to get compensation for her medical bills and loss of wages.

Another woman listened with tears streaming down her face as reporters were told how the woman's daughter had been abducted from a Wal-Mart parking lot and murdered. The mother believed Wal-Mart provided  inadequate security.

A former deli manager described how she was compensated at rates lower than those of male colleagues who performed the same job.

Dority said consumers would probably pay more for what they buy at Wal-Mart if the unions win. But Kim Gandy, president of the National Organization for Women, said consumers pay one way or the other. If Wal-Mart employees have to rely on food stamps or if they cannot afford health insurance, then consumers pay the bill through higher taxes.

"In the final analysis, [organizing workers] would not have an impact on the broad group of customers that shop at Wal-Mart," Gandy said. "It would, however, have a dramatic impact on those customers who are part of families that include a Wal-Mart worker."

Dority represents about 1.4 members of the food- and commercial-workers union. Those members work as meat cutters, cashiers and stockers at grocery stores such as Kroger and Safeway, and they fear that many of those jobs could disappear as Wal-Mart expands its presence as a grocer.

Dority said about 200 meat cutters in Texas voted to join the union, but soon after they did, Wal-Mart shut down that part of the store.

Wal-Mart spokesman Wertz said the company believes that the best way to succeed in the retail business is for managers to have a close working relationship with workers.

"We have always felt that having a union in the middle of that communication, acting as an agent or third party, just wasn't appropriate for our company," he said.

The AFL-CIO said the average Wal-Mart employee makes about $ 8.50 an hour and works about 32 hours a week. The union said about 30 percent of those wages would go to health care if the employee chose to participate in the company's health-insurance plan.

Wertz did not dispute the AFL-CIO's numbers. Nor did he confirm them. He did say that employees are offered a profitsharing plan and a 401(k) plan that does not require matching contributions from the employee. Wertz also said this was not the first time that the AFL-CIO has announced a campaign against Wal-Mart.

"I think the union came out with a similar program two years ago," he said. "It was not very successful."

But labor leaders said Monday that they are ready for a long battle.



FOR IMMEDIATE RELEASE: Thursday, November 14, 2002

Alaskan Fired for Requesting Witness for Interview on Union Activity;
Labor Board Issues New Complaint in 2000 Firing of North Carolina Worker

WASILLA, AK — On the same day the head of Wal-Mart's "people division" was cited in a New York Times article about its anti-union program as bragging the giant retailer had "never been found guilty of firing any employees" for supporting a union, an administrative law judge for the National Labor Relations Board ordered an Alaska worker reinstated with full backpay.

Ken Stanhope was fired in March, according to Wal-Mart, over a conversation he had with a co-worker about supporting the union.  The co-worker said Stanhope had used profanity in the course of this conversation.  The judge found that the conversation was union activity, that Stanhope was, among other things, informing the co-worker about "his perceptions of the necessity of union representation for [Wal-Mart] associates," and that Wal-Mart knew this.  The judge also found that the co-worker who accused Stanhope of using profanity struck him as a witness "who could not be trusted."

The judge found that store managers, based on advice from Wal-Mart's home office in Bentonville, Arkansas, denied Stanhope's lawful request for an employee witness -- a right commonly known as a "Weingarten right" when management sought to question him about the conversation. Instead of permitting Stanhope to exercise his Weingarten rights, Wal-Mart demanded that he continue to participate in the interview and unlawfully fired him after he twice refused to participate without a

Judge Burton Litvack wrote that Wal-Mart "effectively eviscerated Stanhope's [legal] rights" and thus violated the National Labor Relations Act.  "Whether in a union or non- union context, it is, of
course, patently unlawful for an employer to terminate an employee because he/she invokes his/her Weingarten rights," the judge said.

The judge also found that out of eight employees disciplined for using profanity at the store, Wal-Mart had only previously immediately terminated two of them.  He ordered Stanhope reinstated with full back pay and benefits, and ordered Wal-Mart to post a notice stating:

"WE WILL NOT require that our employees, who have a reasonable believe that the matters to be discussed may result in their discipline, continue to participate in investigatory interviews after their request for the presence of their own witness has been denied by us.
"WE WILL NOT discharge our employees because they request the presence of their own witness before participating in an investigatory interview which they reasonably believe may result in discipline against them."

In October, Wal-Mart agreed to a similar posting in College Station, Texas, to avoid a trial on a similar Weingarten complaint issued by the NLRB.  In that case, the company's posting stated: "WE WILL NOT deny our associates/employees, upon request, representation during investigatory
interviews which the associate/employee reasonably believes might result in disciplinary action."

Wal-Mart also agreed not to ask employees about union activities or leave them under their impression that their activities are under surveillance, not to interfere or threaten employees with termination for lawfully soliciting for the union during breaks, meals and other non-work times, and not to threaten to reduce their bonuses or promise them benefits in order to influence employees about the union.

The NLRB also issued yet another complaint against Wal-Mart, this time for discharging Steven Lockyer, an employee in its Boone, N.C., store who posted his own  leaflet protesting low pay in the breakroom. Lockyer was fired in March of 2000, and a hearing before an administrative law judge was scheduled for February 19, 2003, in Boone.

The Boone complaint also alleges the company established an overly-broad rule against union solicitation and distribution of union literature.

Prior to the Alaska decision, the New York Times reported on November 8, 2002 ("Labor Opens a Drive to Organize Wal-Mart) that the chain had been found guilty of illegal practices in 10 cases and had settled 8 others.  The paper said, "Coleman Peterson, the  executive vice president of Wal-Mart's people division, said the company instructs managers not to violate labor laws and has never been found guilty of firing any employees — Wal-Mart calls them associates — for supporting a union."

"While I'm proud that Local 1496 exposed Wal-Mart's hypocrisy," said Walter E. Stuart, president of the UFCW local union in Anchorage, "it is terrible that Mr. Stanhope has had to suffer the indignity  of unemployment for so many months at the hands of the world's largest and richest corporation." 

Stuart called on Wal-Mart to "prove you put people first and immediately put Mr. Stanhope back to work and don't contest his back pay.  Let him resume his life."

For additional information on the Stanhope decision, contact: Walter E.
Stuart, president, UFCW Local 1496, 907-258-1496.

For additional information on Wal-Mart in general, contact: Greg
Denier, UFCW Director of Communications, 202-223-3111.



November 8, 2002
Class Action Lawsuit for Back Pay Filed by Texas Associates

Wal-Mart Loss Prevention agents have a clear mission—to prevent losses.  But a lawsuit filed recently in federal court for the Eastern District Court of Texas charges Wal-Mart with stealing time and money from the very workers assigned to root out theft. 

Loss Prevention associates in Tyler, Texas, are fighting back with a class-action lawsuit claiming the retail giant has a "pattern and practice" of failing to pay Loss Prevention associates for all of the
time Wal-Mart requires them to work.  Federal law requires employers to pay workers time and a half for all hours above 40 worked in a week.

The plaintiffs, Michael Michell and Robert Weaver, claim Wal-Mart fails to maintain records of all hours worked by Loss Prevention associates, much less compensate them for the extra hours.  The ironic twist to their case is that, among their duties, Loss Prevention workers are charged with enforcing the company's policy prohibiting off-the-clock work.

Some of the unpaid overtime worked by the two plaintiffs was spent installing surveillance equipment at management's direction to monitor the employees' union activities.  These workers are also responsible for preventing theft and overall store security.

If the suit is successful, Wal-Mart could be forced to pay workers back wages for all  unpaid overtime for the past three years and the court could double that award as liquidated damages.

Thousands of current and former Wal-Mart  Loss Prevention associates could be eligible to join the lawsuit, and can inquire by calling Attorney Michael Ace, 903-593-3001.

For more information, contact Michael Ace, attorney at law,


Hearing set on Wal-Mart zoning appeal

By Treena Shapiro
Honolulu Advertiser Staff Writer                                                                                   

Tuesday, November 5, 2002...The city Zoning Board of Appeals has tentatively scheduled a hearing Jan. 30 in response to a citizen group's concerns that the Ke'eaumoku "superblock" Wal-Mart project has been approved based on erroneous information.

The Citizens Against Reckless Development has appealed the Department of Planning and Permitting's determination that the plan to build a Wal-Mart store and Sam's Club is consistent with existing zoning requirements and does not require public hearings or environmental impact statements.

"We've asked the Zoning Appeals Board to use its authority to reverse the Department's action because we think it violates the spirit and also the letter (of the law)," said retired columnist Jim Becker, one of the organizers for the group.

Cynthia Lin, Wal-Mart spokeswoman, yesterday said Wal-Mart doesn't believe there's any basis for an appeal and still intends to proceed with the project. She said the property is already zoned to permit the project.

The property is zoned for "commercial business mixed use."

The board will meet Dec. 12 to address any procedural issues before the January contested case hearing when the board will discuss the merits of the case. A contested case hearing is a more formal proceeding in which parties can be represented by lawyers, call witnesses and cross-examine witnesses from other parties.

Loretta Chee, acting planning and permitting director, said that her department will continue to review the applications for building, grading and foundation permits Wal-Mart has already submitted. Once issued, she said the Zoning Board of Appeals does not have the authority to ask her department to revoke them.

She could not comment on what would happen if the group won the appeal because she was not certain what the decision the organization is appealing. "The director has not made any decision and hasn't actually issued any permits," she said.

Becker said he is pleased that the city will allow concerned parties the public hearing, which he said "will give us time to let the community understand what's really coming here -— this monstrosity in a densely populated area."

Becker anticipates problems such as noise, increased traffic and nearby small businesses being hurt by the competition. "If at the end of the day that's what people want, then the people will be heard," he said.

Lin, however, said "while some neighbors may oppose the project, many more Honolulu residents support it and are looking forward to the store opening."

In May, Wal-Mart purchased the 10.5 acre property for an estimated $35 million, with plans to build a double-decker Sam's Club and Wal-Mart on the block bounded by Sheridan, Makaloa, Rycroft and Ke'eaumoku streets.

Wal-Mart plans to open the stores in spring 2004.

Reach Treena Shapiro at tshapiro@honoluluadvertiser.com


Supermarkets Take Tougher Stance with Labor as Non-Union Chains Enter Market.
By Delroy Alexander, Chicago Tribune.

Nov. 3-In what promises to be an old-fashioned slugfest between management and labor, the battle lines are being drawn at supermarkets across the U.S.

Grocery chains want to roll back union benefits and limit pay raises as they face fresh competition from non-unionized supercenter stores, led by Wal-Mart Stores Inc.

Chicago, which has two major grocery chains-Albertson Inc.'s Jewel Food Stores and Safeway-owned Dominick's-is right in the eye of the storm.

Arguing that spending on wages and benefits accounts for half of every dollar retail grocers take in, many supermarket giants appear to be growing weary of unions and their demands. For the entire food industry, labor accounts for 38 percent of costs.

For their part, union chapters across the nation are locking horns with grocery-store management in a bid to maintain their hard-won benefits.

Contract talks at Dominick's, which has 113 stores in Chicago, are being watched closely as they could help set the tone for the industry for years to come, analysts say.

The United Food and Commercial Workers union, which represents about half of the estimated 3.5 million supermarket workers nationwide, already is galvanizing the rank and file locally and nationally for a prolonged struggle.

Typically, 1 percent to 1.5 percent of workers' salaries goes toward union dues, a small portion of which is allocated to a strike fund.

On Thursday, the UFCW will poll thousands of local Dominick's workers, asking them to approve a $2-per-week increase in union dues. The national UFCW plans to help build a special "war chest" that would ensure workers would continue to receive wages in the event of strike.

The Chicago vote on increasing the strike fund comes just two days before Dominick's existing three-year pay deal is due to end on Saturday.

Although the negotiations have been described by participants as "excruciatingly painful," neither side will say much publicly about the discussions.

"We are in contract negotiations for the next five or six days," said S.J. Peters, a spokesman for one of two local UFCW chapters that represent close to 10,000 Dominick's workers in Chicago. " The
negotiations are tough, but that's all I can say."

David Faustman, vice president of labor relations at Dominick's parent Safeway, also is reluctant to comment on the state of negotiations but said his team of local managers is negotiating in "good faith."

"I don't think its fair to say we are trying to reduce living standards of our workers," said Faustman. "We are just trying to keep competitive in the Chicago marketplace. That's what any responsible company would do.'

However, the pressure is on Safeway to improve Dominick's operating performance, which has become a drag on earnings since its $1.9 billion acquisition four years ago, said Bob Summers, an analyst for Banc of America Securities.

"The Dominick's acquisition really hasn't gone that well," Summers said. "Since [Safeway] acquired the company, they've done nothing but lose market share. They put too many Safeway components into the business, and it wasn't well received by customers."

It's little surprise to Summers that labor negotiations across the network of 1,800 Safeway's stores and elsewhere in the industry are increasingly tense.

Summers points to growing tensions in California, Safeway's headquarters state, where Wal-Mart has aggressively opened up stores with a full grocery component inside.

But it's not just in California where supercenters are popping up in growing numbers.

The number of Wal-Mart Supercenters in Illinois rose by three, to 33, over the past 12 months. In neighboring Michigan, the company has doubled its presence to 14 over the past year, and in Missouri its up to 58 from 53.

In October, Wal-Mart said it would continue its aggressive growth in the fiscal year beginning Feb. 1, 2003. Wal-Mart will open approximately 45 to 55 discount stores and 200 to 210 supercenters.

"This represents a continued acceleration of supercenter unit expansion and reflects the strong consumer acceptance and financial results from the format," said the company in a statement. "Relocations or expansions of existing discount stores will account for approximately 140 of the
supercenters, while the remainder will be built in new locations."

One of the biggest advantages of the Wal-Mart Supercenters, say supermarket managers, is in the cost of hiring and keeping its service clerks, bag packers and meat cutters.

In Wal-Mart's California stores, which are not unionized, basic pay for a service clerk is about $8 per hour, compared with as much as $18 an hour for unionized employees at a Safeway store in the same area.

But even where this competitive dynamic doesn't appear to hold true, Safeway and other chains are attempting to contain labor costs, which is the single largest expense in the highly competitive food arena.

For example, Safeway is the dominant player in Hawaii, where its 18 stores accounts for about 60 percent of the market, Nevertheless, the company has taken an especially hard stance in contract negotiations.

Recently, UFCW members in Hawaii completed contract talks with Safeway. Pat Loo, president of Local 480 in Hawaii, said his negotiating team had to swallow some tough concessions. He expects Safeway to make similar same demands in Chicago.

"The company pretty much has a cookie-cutter approach to things," said Loo.

One demand by Safeway was to change progression rates: the speed at which junior staff make it through the ranks to journeyman status.

It typically would take a new service clerk in Hawaii about two years working full time to progress from an hourly rate of about $7.50 up to $14.61. But under the new deal, that time has been extended to about five-and-a-half years.

Dominick's service clerks in Chicago start at about $6 per hour. A similar demand is on the negotiating table, according to sources close to the talks.

Like many chains, Safeway is relying more on part-time staff, so it could take employees as many as 10 years to reach journeyman status, Loo said.

Also under the new Hawaii contract, new employees no longer will be eligible for pension benefits immediately after their 60-day probation is up. Instead, they will have to wait a full year before being
eligible. Union health and pension benefits cost Safeway an extra $1.10 per hour. In addition, time and a half for overtime and other premium rates during holidays have been slashed in favor of an extra 50 cents per hour.

One area the union would not compromise on, Loo said, was Safeway'sdesire to build a second tier into the pay structure, which would have effectively created a lower pay scale for new hires.

"We couldn't agree to that," said Loo. "But I can see them trying this elsewhere."

Loo intends to ask his members in November to ratify an increase in dues for their own strike fund.

"I kept in close contact with my Chicago brothers," said Loo, who represents about 1,600 store workers on four Pacific islands.

When the new contract ends on July 31, 2004, Loo will negotiate for the first time as part of the 60,000 strong Northern California UFCW region.

"There is strength in numbers," said Loo. "I am telling my members it's not a question of if [we have to strike] but when."

KRTBN Knight-Ridder Tribune Business News: Chicago Tribune Copyright (C) 2002 KRTBN Knight Ridder Tribune Business News
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October30, 2002...HONOLULU –  After saying no to the $35 million Keeaumoku Superblock property a year ago, while under fire from neighborhood residents, environmentalists and the downtown business community, Wal-Mart disappeared from the public radar screen and took its plans to city hall.  The resurrected 317,000 sq.ft., doubledecker superstores project, which was announced to the public on May 5, 2002, has made its way to near-ground breaking without meeting any environmental tests or gaining public acceptance.

 The community’s response came last Tuesday as an ad hoc group of community activists, calling themselves, Citizens Against Reckless Development (CARD), held a press conference on the steps of city hall, after being denied access to a Planning Committee meeting.

CARD spokesperson, Jim Becker, a resident of the Makiki neighborhood community let it be known that the residents of the impacted Superblock neighborhood will not sit quietly by while Wal-Mart destroys their neighborhood with increased traffic, noise, air pollution and other negative environmental impacts associated with the project.

 CARD filed an appeal with the city on the 10.5-acre proposed Wal-Mart site, seeking a delay in the onset of construction, which has been rumored to start in the next week or so.

 The lengthy appeal filed by CARD, which now has more than 200 members and growing, contained some 60 pages of expert review and criticism of the project including a review of Wal-Mart’s recent traffic study, health-related air quality concerns and a review of negative economic impacts of the proposed Wal-Mart.

 “We have had experts look at this project in view of our city’s general plan and the most recent iteration of the Primary Urban Center Development Plan (PUC), which call for collaborative, neighborhood-based planning to produce livable, walkable, vibrant neighborhoods in this area,” remarked the CARD mentor.

According to Becker, the Wal-Mart project as presented flies in the face of Hawaii’s and Honolulu’s proud tradition of participatory democracy and publicly informed government decision-making.  He further believes that the planning and zoning departments’ action in not properly addressing key environmental and community issues is improper as a matter of law and reckless as a matter of policy.

Becker and his community activists are not the only one’s denouncing the project and questioning its propriety.  State Senator Carol Fukanaga requested an independent review of the Wal-Mart Traffic study by the University of Hawaii Environmental Center. In a 4-page response to the Senator’s inquiry, Environmental Coordinator John T. Harrison, Ph.D., stated that the project will have  “significant environmental and economic effects”, including major impacts on public utilities in the area.

 The Center’s letter was critical of the Wal-Mart traffic study agreeing with CARD’s traffic engineer that the traffic impact was understated by 20 percent or more and did not address a number of key traffic-related issues including the impact of the proposed BRT transit that will create a loss of two lanes on Kapiolani forcing even more traffic to King and Beretania Streets, which border the project on the north and south.

 The University report also is highly critical of city and county officials “pressing for swift approval of permits for construction … which certainly appear injudicious in performance of their discretionary duties.” The report calls attention to the failure of Hawaii’s state environmental laws to protect the public from bureaucratic loopholes that undermine environmental and public review of such projects.

 Wal-Mart, which is the world’s largest corporation, with retail sales of more than $220 billion in 2001 and a bottom line profit of nearly $7 billion, is now faced off with a determined opponent that wants to stop the clock on development until an environmental impact report can be properly prepared on the Superblock project. Wal-Mart already operates seven discount and club stores in Hawaii, including three on Oahu, and now has plans to build another large store in Pearl City, near their existing Sam’s Club operation.  It is rumored that Wal-Mart is also looking to build a supercenter in Kihei, Maui, six miles from its store in Kahului.  

Only time will tell who will prevail in this David and Goliath battle in the streets of Honolulu, where citizens of the Makiki District are fighting to protect their piece of paradise from the largest proposed Wal-Mart store in the world and the worst traffic congestion in Honolulu.


 Bullying people from your town to China

By Jim Hightower

October 2002...Corporations rule. No other institution comes close to matching the power
that the 500 biggest corporations have amassed over us. The clout of all
535 members of Congress is nothing compared to the individual and
collective power of these predatory behemoths that now roam the globe,
working their will over all competing interests.

The aloof and pampered executives who run today's autocratic and secretive
corporate states have effectively become our sovereigns. From who gets
health care to who pays taxes, from what's on the news to what's in our
food, they have usurped the people's democratic authority and now make
these broad social decisions in private, based solely on the interests of
their corporations. Their attitude was forged back in 1882, when the
villainous old robber baron William Henry Vanderbilt spat out: “The public
be damned! I'm working for my stockholders.”

The media and politicians won't discuss this, for obvious reasons, but we
must if we're actually to be a self-governing people. That's why the
Lowdown is launching this occasional series of corporate profiles. And why
not start with the biggest and one of the worst actors?

The beast from Bentonville

Wal-Mart is now the world's biggest corporation, having passed Exxon/Mobil
for the top slot. It hauls off a stunning $220 billion a year from We the
People (more in revenues than the entire GDP of Israel and Ireland combined).

Wal-Mart cultivates an aw-shucks, we're-just-folks-from-Arkansas image of
neighborly small-town shopkeepers trying to sell stuff cheaply to you and
yours. Behind its soft homespun ads, however, is what one union leader
calls “this devouring beast” of a corporation that ruthlessly stomps on
workers, neighborhoods, competitors, and suppliers.

Despite its claim that it slashes profits to the bone in order to deliver
“Always Low Prices,” Wal-Mart banks about $7 billion a year in profits,
ranking it among the most profitable entities on the planet.

Of the 10 richest people in the world, five are Waltons -- the ruling
family of the Wal-Mart empire. S. Robson Walton is ranked by London's “Rich
List 2001” as the wealthiest human on the planet, having sacked up more
than $65 billion (£45.3 billion) in personal wealth and topping Bill Gates
as No. 1.

Wal-Mart and the Waltons got to the top the old-fashioned way -- by
roughing people up. The corporate ethos emanating from the Bentonville
headquarters dictates two guiding principles for all managers: extract the
very last penny possible from human toil, and squeeze the last dime from
every supplier.

With more than one million employees (three times more than General
Motors), this far-flung retailer is the country's largest private employer,
and it intends to remake the image of the American workplace in its image
-- which is not pretty.

Yes, there is the happy-faced “greeter” who welcomes shoppers into every
store, and employees (or “associates,” as the company grandiosely calls
them) gather just before opening each morning for a pep rally, where they
are all required to join in the Wal-Mart cheer: “Gimme a W!” shouts the
cheerleader; “W!” the dutiful employees respond. “Gimme an A!” And so on.

Behind this manufactured cheerfulness, however, is the fact that the
average employee makes only $15,000 a year for full-time work. Most are
denied even this poverty income, for they are held to part-time work. While
the company brags that 70 percent of its workers are full-time, at Wal-Mart
“full time” is 28 hours a week, meaning they gross less than $11,000 a year.

Health-care benefits? Only if you've been there two years; then the plan
hits you with such huge premiums that few can afford it -- only 38% of
Wal-Marters are covered.

Thinking union? Get outta here! “Wal-Mart is opposed to unionization,”
reads a company guidebook for supervisors. “You, as a manager, are expected
to support the company's position. . . . This may mean walking a tightrope
between legitimate campaigning and improper conduct.”

Wal-Mart is in fact rabidly anti-union, deploying teams of union-busters
from Bentonville to any spot where there's a whisper of organizing
activity. “While unions might be appropriate for other companies, they have
no place at Wal-Mart,” a spokeswoman told a Texas Observer reporter who was
covering an NLRB hearing on the company's manhandling of 11 meat-cutters
who worked at a Wal-Mart SuperCenter in Jacksonville, Texas.

These derring-do employees were sick of working harder and longer for the
same low pay. “We signed [union] cards, and all hell broke loose,” says
Sidney Smith, one of the Jacksonville meat-cutters who established the
first-ever Wal-Mart union in the U.S., voting in February 2000 to join the
United Food and Commercial Workers. Eleven days later, Wal-Mart announced
that it was closing the meat-cutting departments in all of its stores and
would henceforth buy prepackaged meat elsewhere.

But the repressive company didn't stop there. As the Observer reports:
“Smith was fired for 'theft' after a manger agreed to let him buy a box of
overripe bananas for 50 cents, Smith ate one banana before paying for the
box, and was judged to have stolen that banana.”

Wal-Mart is an unrepentant and recidivist violator of employee rights,
drawing repeated convictions, fines, and the ire of judges from coast to
coast. For example, the Equal Employment Opportunity Commission has had to
file more suits against the Bentonville billionaires club for cases of
disability discrimination than any other corporation. A top EEOC lawyer
told Business Week, “I have never seen this kind of blatant disregard for
the law.”

Likewise, a national class-action suit reveals an astonishing pattern of
sexual discrimination at Wal-Mart (where 72 percent of the salespeople are
women), charging that there is “a harsh, anti-woman culture in which
complaints go unanswered and the women who make them are targeted for

Workers' compensation laws, child-labor laws (1,400 violations in Maine
alone), surveillance of employees -- you name it, this corporation is a
repeat offender. No wonder, then, that turnover in the stores is above 50
percent a year, with many stores having to replace 100 percent of their
employees each year, and some reaching as high as a 300 percent turnover!

Worldwide wage-depressor

Then there's China. For years, Wal-Mart saturated the airwaves with a “We
Buy American” advertising campaign, but it was nothing more than a
red-white-and-blue sham. All along, the vast majority of the products it
sold were from cheap-labor hell-holes, especially China. In 1998, after
several exposes of this sham, the company finally dropped its “patriotism”
posture and by 2001 had even moved its worldwide purchasing headquarters to
China. Today, it is the largest importer of Chinese-made products in the
world, buying $10 billion worth of merchandise from several thousand
Chinese factories.

As Charlie Kernaghan of the National Labor Committee reports, “In country
after country, factories that produce for Wal-Mart are the worst,” adding
that the bottom-feeding labor policy of this one corporation “is actually
lowering standards in China, slashing wages and benefits, imposing long
mandatory-overtime shifts, while tolerating the arbitrary firing of workers
who even dare to discuss factory conditions.”

Wal-Mart does not want the U.S. buying public to know that its famous low
prices are the product of human misery, so while it loudly proclaims that
its global suppliers must comply with a corporate “code of conduct” to
treat workers decently, it strictly prohibits the disclosure of any factory
names and addresses, hoping to keep independent sources from witnessing the
“code” in operation.

Kernaghan's NLC, acclaimed for its fact-packed reports on global working
conditions, found several Chinese factories that make the toys Americans
buy for their children at Wal-Mart. Seventy-one percent of the toys sold in
the U.S. come from China, and Wal-Mart now sells one out of five of the
toys we buy.

NLC interviewed workers in China's Guangdong Province who toil in factories
making popular action figures, dolls, and other toys sold at Wal-Mart. In
“Toys of Misery,” a shocking 58-page report that the establishment media
ignored, NLC describes:

13- to 16-hour days molding, assembling, and spray-painting toys from 8
a.m. to 9 p.m. or even midnight, seven days a week, with 20-hour shifts in
peak season.

Even though China's minimum wage is 31 cents an hour -- which doesn't begin
to cover a person's basic subsistence-level needs -- these production
workers are paid 13 cents an hour.

Workers typically live in squatter shacks, seven feet by seven feet, or
jammed in company dorms, with more than a dozen sharing a cubicle costing
$1.95 a week for rent. They pay about $5.50 a week for lousy food. They
also must pay for their own medical treatment and are fired if they are too
ill to work.

The work is literally sickening, since there's no health and safety
enforcement. Workers have constant headaches and nausea from paint-dust
hanging in the air; the indoor temperature tops 100 degrees; protective
clothing is a joke; repetitive stress disorders are rampant; and there's no
training on the health hazards of handling the plastics, glue, paint
thinners, and other solvents in which these workers are immersed every day.

As for Wal-Mart's highly vaunted “code of conduct,” NLC could not find a
single worker who had ever seen or heard of it.

These factories employ mostly young women and teenage girls. Wal-Mart,
renowned for knowing every detail of its global business operations and for
calculating every penny of a product's cost, knows what goes on inside
these places. Yet, when confronted with these facts, corporate honchos
claim ignorance and wash their hands of the exploitation: “There will
always be people who break the law,” says CEO Lee Scott. “It is an issue of
human greed among a few people.”

Those “few people” include him, other top managers, and the Walton
billionaires. Each of them not only knows about their company's
exploitation, but willingly prospers from a corporate culture that demands
it. “Get costs down” is Wal-Mart's mantra and modus operandi, and that
translates into a crusade to stamp down the folks who produce its goods and
services, shamelessly building its low-price strategy and profits on their

The Wal-Mart gospel

Worse, Wal-Mart is on a messianic mission to extend its exploitative ethos
to the entire business world. More than 65,000 companies supply the
retailer with the stuff on its shelves, and it constantly hammers each
supplier about cutting their production costs deeper and deeper in order to
get cheaper wholesale prices. Some companies have to open their books so
Bentonville executives can red-pencil what CEO Scott terms “unnecessary

Of course, among the unnecessaries to him are the use of union labor and
producing goods in America, and Scott is unabashed about pointing in the
direction of China or other places for abysmally low production costs. He
doesn't even have to say “Move to China” -- his purchasing executives
demand such an impossible lowball price from suppliers that they can only
meet it if they follow Wal-Mart's labor example. With its dominance over
its own 1.2 million workers and 65,000 suppliers, plus its alliances with
ruthless labor abusers abroad, this one company is the world's most
powerful private force for lowering labor standards and stifling the
middle-class aspirations of workers everywhere.

Using its sheer size, market clout, access to capital, and massive
advertising budget, the company also is squeezing out competitors and
forcing its remaining rivals to adopt its price-is-everything approach.

Even the big boys like Toys R Us and Kroger are daunted by the company's
brutish power, saying they're compelled to slash wages and search the globe
for sweatshop suppliers in order to compete in the downward race to match
Wal-Mart's prices.

How high of a price are we willing to pay for Wal-Mart's “low-price” model?
This outfit operates with an avarice, arrogance, and ambition that would
make Enron blush. It hits a town or city neighborhood like a retailing
neutron bomb, sucking out the economic vitality and all of the local
character. And Wal-Mart's stores now have more kill-power than ever, with
its SuperCenters averaging 200,000 square feet -- the size of more than
four football fields under one roof! These things land splat on top of any
community's sense of itself and devour local business.

By slashing its retail prices way below cost when it enters a community,
Wal-Mart can crush our groceries, pharmacies, hardware stores, and other
retailers, then raise its prices once it has mono-poly control over the

But, say apologists for these Big-Box megastores, at least they're creating
jobs. Wrong. By crushing local businesses, this giant eliminates three
decent jobs for every two Wal-Mart jobs that it “creates” and a store full
of part-time, poorly paid employees hardly builds the family wealth
necessary to sustain a community's middle-class living standard.

Indeed, Wal-Mart operates as a massive wealth extractor. Instead of profits
staying in town to be reinvested locally, the money is hauled off to
Bentonville, either to be used as capital for conquering yet another town
or simply to be stashed in the family vaults (the Waltons, by the way, just
bought the biggest bank in Arkansas).

It's our world

Why should we accept this? Is it our country, our communities, our economic
destinies -- or theirs? Wal-Mart's radical remaking of our labor standards
and our local economies is occurring mostly without our knowledge or
consent. Poof -- there goes another local business. Poof -- there goes our
middle-class wages. Poof -- there goes another factory to China. No one
voted for this . . . but there it is. While corporate ideologues might
huffily assert that customers vote with their dollars, it's an election
without a campaign, conveniently ignoring that the public's “vote” might
change if we knew the real cost of Wal-Mart's “cheap” goods -- and if we
actually had a chance to vote.

Much to the corporation's consternation, more and more communities are
learning about this voracious powerhouse, and there's a rising civic
rebellion against it. Tremendous victories have already been won as
citizens from Maine to Arizona, from the Puget Sound to the Gulf of Mexico,
have organized locally and even statewide to thwart the expansionist march
of the Wal-Mart juggernaut.

Wal-Mart is huge, but it can be brought to heel by an aroused and organized
citizenry willing to confront it in their communities, the workplace, the
marketplace, the classrooms, the pulpits, the legislatures, and the voting
booths. Just as the Founders rose up against the mighty British trading
companies, so we can reassert our people's sovereignty and our democratic
principles over the autocratic ambitions of mighty Wal-Mart.


More of Jim Hightower's writing can be found in his monthly newletter, The
Hightower Lowdown. For more information, see http://www.jimhightower.com.

Also See:

Wal-Mart Watch

Wal-Mart Dungeon in Red China

Working for Wal-Mart in China: Earning 36 cents a month, 8 cents  a week
  or, 1/10th of a cent per hour


Wal-Mart says layoffs not related to pay

By LAURA RUANE lruane@news-press.com

10/11/2002...A Wal-Mart official Thursday acknowledged some local layoffs but denied
allegations from two former employees that more than two dozen workers
were laid off in the past week at a south Fort Myers store.

The workers at the Supercenter at 14821 Six Mile Cypress Parkway say
they were let go for lack of work - even as others were being hired at
lower, starting pay.

"That particular store has about 620 employees," said Tom Williams, the
Bentonville, Ark.-based company spokesman. "They have cut 10 to 15 very
recently, due to business conditions.

"As for the allegations we are pushing them out the door to make room
for cheaper employees, I would disagree with that," Williams said.

However, Dana Mailloux and Teresa Adkins - dismissed Oct. 3 from the
store at Six Mile Cypress Parkway - said they see signs to the contrary.

"They told us they were cutting the work force due to lack of work. But
they're doing orientation for new associates," said Mailloux, 33, an
eight-year employee, who most recently worked as a cashier.

And, when Mailloux returned Thursday to get her last paycheck, "They
still had that sign out that says `Now Hiring.' I think that's a slap in
our face." She estimated as many as 35 employees were cut.

"It was wrong, the way they let us go. No warning, no nothing," said
Adkins, 39, a stocker who worked for Wal-Mart two years.

Both women said that in the past year, they'd been suspended for a day
with pay for different rule infractions. Wal-Mart managers mentioned
these violations on their last day of work, they said. However Adkins
and Mailloux said they were asked to sign a form that stated they were
being dismissed for lack of work. The form did not mention any

Mailloux refused to sign the form and has retained Fort Myers attorney
Geralyn Noonan to look into the situation.

Noonan, who specializes in labor issues, said it appears a number of
individuals have been laid off recently.

She said she is concerned about possible violations to the federal
Worker Adjustment and Retraining Notification Act.

The WARN Act requires companies to alert certain government agencies
about layoffs of 50 people or more, 60 days in advance. It's intended to
bring in timely job-placement and retraining help to the affected

"This is a law you don't hear about much in Lee County, Florida,"
Noonan said. "It tends to be invoked where there is union involvement."

Mailloux said she was told she could reapply for her job in three to
six weeks - "and come back at base pay, with no benefits." Adkins said a
manager also told her she could reapply for a job at the same store.

Wal-Mart's Williams said that on occasion, stores will rehire workers
in good standing when business improves.

If their separation from the company has been six months or less, "I do
believe they retain seniority in terms of vacation," he said.

As for pay upon their return, that depends on the job for which a
worker is rehired, Williams said.

 The Wal-Mart Supercenter in south
Fort Myers displays a "Now Hiring" sign despite claims of layoffs.

3d(c) Copyright 2002, News-Press. All Rights Reserved.


Wal-Mart denies wage, hour abuses
Labor suits hit retailer in Michigan, 29 states


October 9, 2002...When Leona Crawford clocked out for lunch at the Wal-Mart in  South Haven,         she would eat at her desk and keep working. When she clocked out
for the night, she couldn't just walk out of the store and go home.

Sometimes, the doors would be locked and Crawford, 50, and other late-shift workers would    straighten shelves and aisles until a manager with a key came by and let them out. While she was scheduled to work 40 hours a week, she usually worked at least 45, and five of those were

"It makes you feel you're a little worthless, that you're being taken advantage of, " Crawford said.

Crawford's claims are part of a lawsuit against Wal-Mart that accuses the world's largest retailer of holding down its labor costs by forcing hourly employees in Michigan to work for free.

Similar suits are pending in about 29 other states as labor lawyers take on the powerhouse retailer      and union leaders try to organize its workforce.

Wal-Mart spokesman Bill Wertz denies the allegations of widespread abuses.

"Our associates are central to our business success, and it makes no sense from a business     standpoint to mistreat or cheat the people we depend upon to provide the service our customers expect," Wertz said.

With annual sales of $218 billion and a U.S. workforce of 1 million, Wal-Mart operates more than         3,300 discount stores, supercenters, Sam's Clubs and Neighborhood Markets.

In Michigan, Wal-Mart has 45 stores, 14 supercenters, and 21 Sam's Clubs, with about 22,400 employees combined.

But a retail expert says labor troubles could undermine what seems to be an invincible competitor in the discount and grocery businesses.

"One of the things I've consistently heard is that if there could be a piece to the Wal-Mart puzzle            that begins to show a crack in their armor, it could be a people piece," said Frank Gambino, associate professor of food marketing at Western Michigan University.

Wal-Mart has long been known for low prices. It may also be getting a reputation for labor trouble:

Wal-Mart is facing wage-abuse lawsuits in states from Oregon to West Virginia.
Richard Feinberg, a retail management professor at Purdue University, says Wal-Mart is sued a thousand times a year, and the number of wins by employees is "infinitesimal. Wal-Mart fights these suits and most people lose."

Nevertheless, Joe Mellon, a Denver lawyer working on the Michigan case, said, "We have not been deterred by what we've seen, and as a result, we are continuing to move forward with these cases."

The National Labor Relations Board has issued about 30 local complaints against Wal-Mart for interfering with labor drives. Wal-Mart is contesting those cases.

The United Food and Commercial Workers Union has made organizing Wal-Mart stores its top priority.
"It has to be No. 1," said Al Zack, director of the union's strategic programs. "Wal-Mart is leading a drive to reduce the working standard -- the living standard -- in the retail industry down to the lowest common denominator."

Meat cutters let go The United Food and Commercial Workers Union has organizing drives
under way at 96 Wal-Mart locations around the country, including 10 in Michigan.

It has won just a single vote -- the meat department of Wal-Mart's Jacksonville, Texas, store.

But a week after a majority of the meat cutters agreed to join the union in 2000, Wal-Mart said it was going to pre-packaged meats.

All but one of the Jacksonville store's 10 meat cutters were let go or reassigned.

The National Labor Relations Board investigated, but did not issue a complaint against Wal-Mart.

Leonard Page, the NLRB's general counsel at the time and a former lawyer with the United Auto Workers in Detroit, says the timing -- and a lack of corporate records showing the move to case-ready meat had been in the works for six months or a year -- made Wal-Mart's decision
"extremely suspicious."

Page says Wal-Mart cooperated with the investigation. He concluded that its decision to go to case-ready meats right after the Jacksonville vote was a coincidence.

Page, however, was also investigating Wal-Mart's response to organizing drives around the country. In early 2001, he began to pursue a national complaint against the company for what he considered a pattern of illegal responses to organizing drives coming out of Wal-Mart's
headquarters in Bentonville, Ark.

Two weeks before he was to meet with Wal-Mart to discuss the complaint, the Bush administration called Page and told him he was being let go. Wal-Mart was not mentioned.

"That was the biggest thing I had pending on my platter at the time," Page said. "Perhaps it's just another coincidence."

Page is now living in Cheboygan. An NLRB spokesman said the agency determined last year that there was an "insufficient basis to seek a nationwide order against Wal-Mart."

Wertz, the Wal-Mart spokesman, declined to comment on Page's allegations.

Labor problems in stores Labor lawyers are also wrangling with Wal-Mart over the way it treats
hourly employees.

The 30 lawsuits across the country claim Wal-Mart holds labor costs down by forcing employees to work through breaks, and before or after their shifts. The lawsuits also allege that Wal-Mart doctors time cards to avoid paying overtime, and keeps clocked-out, graveyard shift employees locked in the stores until a manager lets them out.

Wertz says the company does not allow employees to work off the clock.

"We have a very strict policy to pay our associates for every minute that they work and for any overtime they work," Wertz said. "We think the instances alleged in these suits are infrequent and isolated, and really are not the consequence of any systematic abuse."

Wal-Mart has settled a labor suit in Colorado -- it is sealed -- and the Oregon case goes to trial in federal court in Portland in November. It covers about 400 current and former workers in Oregon.

In Texas, a judge has declared a similar suit against Wal-Mart a class action, while a judge in Louisiana denied workers there the right to file as a class.

Both rulings are on appeal.

In Michigan, lawyers for seven former Wal-Mart workers from around the state will go to court Nov. 5 to ask that their complaint be made a class action, allowing thousands of past and current workers to sue for unpaid wages.

Filed in September of 2001 in Saginaw Circuit Court, the suit claims Wal-Mart engaged in a "systematic scheme of wage abuse against its hourly employees in Michigan."

Crawford, who has provided sworn testimony in the lawsuit, says employees at her store were reprimanded when they worked more than their assigned hours on the clock. They'd get in trouble if they didn't finish their work.

And as a member of the accounting department, Crawford says, she was asked by other employees to alter their time cards when they went over their assigned hours.

Crawford says she worked off the clock because she needed her job. She has a high school education, and her husband works on a farm, driving a tractor.

"It takes two incomes," said Crawford, who worked at the store for nearly seven years before going out on disability in April 2000 after hurting her back on the job.

Contact JENNIFER DIXON at 313-223-4410 or dixon@freepress.com.


Big Box Ordinance Adopted In Martinez

         MARTINEZ,  CA -- At a standing-room-only meeting last night at Martinez City Hall, a two-year campaign to pass a Big Box Ordinance in this city ended in a 3-to-1 vote in favor of the first ground-breaking Neighborhood Business Preservation Ordinance.  The opposition to this ordinance was led by Wal-Mart, who currently operates a 125,000 sq. ft. store in Martinez.

            Mayor Mike Menesini introduced the ordinance two months ago and brought it to a public hearing and a vote on September 4th.  After a two-hour public hearing, the Council adopted the ordinance on a 3-to-1 vote.  Strong support from the labor community helped put the ordinance over the top.

            “We were very pleased that the City Council, under tremendous fire and pressure from Wal-Mart and the Chamber of Commerce, did the right thing for our community of 36,000 residents.  I have lived in Martinez for over 26 years and I am proud of our City officials who did the right thing for our community and for the 400 UFCW members and retirees who live here,” remarked President Barbara Carpenter following the meeting.

            “Many of our members who live or work in Martinez also showed their support at the two Council meetings and helped us get this measure passed,” concluded Carpenter.

            The initial attempt to get an ordinance adopted started in August 2000 before Wal-Mart closed its deal to purchase an existing retail store from COSTCO failed.   Because of the tax deficit created by COSTO leaving town, the City Council was reluctant to introduce any ordinance that would interfere with getting a replacement operator at the vacant COSTCO location. Wal-Mart also promised the city fathers that they did not intend to expand the existing store into a supercenter or offer a large amount of non-taxable food items in the Martinez store.

            At the September 4th  City Council meeting, city staff recommended against adopting a restrictive ordinance on big box stores; however, the Council proponents backed by study and survey information provided to them by Local 1179 Legal Council Mark Wolfe of Adams, Broadwell, Joseph & Cardozo.

            Wal-Mart says they are not through yet and have indicated they intend to start a referendum ballot measure so they can take their battle for free competition to the voters.

            The Martinez ordinance restricts the sale of non-taxable items to 5% in retail stores  90,000 sq. ft. of gross floor space or more.

             For additional information, contact President Barbara Carpenter at United Food & Commercial Workrs Union, Local 1179, 4121 Alhambra Avenue, Martinez, CA 94553, email: bcarpenter.local1179@unions.com.


Attached is President Dority's letter to the Federal Deposit Insurance Corporation opposing Wal-Mart's application to purchase Franklin Bank of California, a small industrial bank. As noted in the letter, if this application is approved and the Congress approves pending legislation to allow industrial banks to accept demand deposits, Wal-Mart will have successfully skirted the 1999 prohibition on commercial enterprises owning and operating banks.  
click here > President Dority's letterFrom: "Brenda Holtz" <bholtz@ufcw.org>


               Wal-Mart  Bank

Please write your Senators urging them to oppose this legislation.  In 1999, the Congress passed banking  reform legislation which  prohibits commercial  businesses from operating banks.  If  Wal-Mart's purchase  of a small industrial bank in California goes through, this bill  would open the door to a nationwide Wal-Mart bank. It is nothing  more than an end-run around  legislation which was specifically adopted to  prevent  an earlier attempt by Wal-Mart to  buy a bank                                                                                          .                                                 

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Issues & Action

Exposing the Wal-Mart Corporations relentless war against it's workers      who are organizing for better workplace conditions and how you can help!



Brent Hopkins\ Staff Writer

Los Angeles Daily News

Supermarket workers fear Wal-Mart's preparations to muscle its way into Southern California will quash their high pay and good benefits, and are preparing a campaign to keep the world's largest retailer at bay.

Wal-Mart announced earlier this year that it plans to open 40 of its SuperCenters - massive department stores with huge grocery components - in Southern California. While the number pales in comparison to the 450 stores under the Ralphs banner, for example, the Bentonville, Ark.-based giant can leverage its immense buying power to offer deep discounts.

Union leaders at the United Food and Commercial Workers, long critical of the megastore, fear the cut-rate prices could woo enough customers away from existing stores to force cuts in members' compensation.

"This is war," said George L. Hartwell, president of UFCW Local 1036, which represents Ventura County. "(They) declared it by saying they'll build the 40 super Wal-Marts."

UFCW has decided to fire back, however. Members of its Los Angeles ,County branch, Local 770 voted this week to increase their monthly dues to pay for lobbying campaigns, advertising and the hiring of organizers to establish union contracts at the chain's stores. Local 1036 hopes to
follow, petitioning its 12,000 members to chip in an extra hour's worth of pay each month to facilitate the hiring of 18 organizers to supplement the anti-Wal-Mart ads it already runs in Ventura County.

Wal-Mart poses no immediate threat to the grocery clerks and service workers employed by most chains. But union leaders fear that the increased competition will put the heat on Albertson's, Ralphs, Vons and other chains to cut overhead, either by cutting the work force, or less
extreme actions as eliminating benefits.

"We have a fight and we know it," Hartwell said. "Our standard of living could go right down the tubes. Right now if you're a full- time clerk, you can buy a home, send your kids to school and still go on vacation. At Wal-Mart's wages, you can't do that. We want to bring them to our standard of living."

Journeymen clerks protected by union contracts earn hourly wages in the $17 range, with attractive medical benefits and vacation. In contrast, most Wal-Mart associates begin near minimum wage and part- time workers don't qualify for medical coverage until a year of service.

"Every job we have nationwide is above minimum wage," said Bob McAdam, Wal-Mart's vice president of communications. "We do market analysis and we pay competitively, but that doesn't necessarily mean it's the same as a union job. We do offer bonuses, stock purchase options and company contributions to a 401(k)."

But that's not good enough for workers like Michael Rosales. A 25- year employee at Ralphs, he worries that if Wal-Mart comes to town, he'll lose the modest, but comfortable, life he's built for himself.

"I feel threatened," the 44 year-old Lancaster resident said. "It's threatening my livelihood and puts a scare to me. Their object is to come in and undermine businesses. They put their prices a lot lower than what the regular supermarket would do, then put them out of businesses
and raise prices."

McAdam said the chain - which announced plans Monday to open a 1.3 million-square-foot warehouse with loading docks for 300 trucks in San Bernardino County - seeks only its own niche, not to force out others.

"There's no evidence anywhere we have supercenters where it's lessened competition," he said. "It's been quite vibrant, particularly in the metro markets. We're not out to cause harm to anyone, we believe that there's more than enough competition."

Retail expert David Unter, a senior manager of consumer business practice for Deloitte & Touche's Costa Mesa office, wasn't so sure. "Any time Wal-Mart enters a market, the competition has to take a look," he said. "Because of the way they've positioned themselves as being a low
price leader, they've established dominance wherever they've put their footprint. I could definitely see why other retailers would be tense knowing they're coming in."

The California Grocers Association has taken no formal position on the subject, but retailers' actions to gussy up their stores indicate an interest in staving off Wal-Mart. Bobby Ray Oliver, a North Hollywood resident who's clerked for Gelson's for 18 years, already feels the pressure.

"It's a great threat to me," he said. "If Wal-mart opens up and competes against my company, my company's paying realistically $21 an hour with benefits. Wal-Mart doesn't do that, so for my company to stay in business, they'll have to ask me to take less wages or give up my benefits. That would make life harder for me and my children. I might have to work two jobs, and if I'm not home watching my kids, they could go out and get in trouble."

Though the locals don't relish locking horns with Wal-Mart, they're more than ready to take up the cause.

"It's going to be very difficult, but we've got 12,000 members," Hartwell said. "That's 12,000 organizers, and if they're married or living at home, then that's even more. We've got an army to mobilize."

Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved.


Wal-Mart's biggest bargain? It may be squeezing free overtime out of workers.
By Jennifer Mathieu

Judy Danneman's shift at Wal-Mart started at 6 a.m., before the store even opened, and she always arrived on time. She and fellow employees would have to wait outside in the darkened parking lot until an assistant manager showed up to let them in.
But the manager was often up to a half-hour late. When they were finally allowed to clock in, the workers wouldn't get credit for time spent standing outside. Those minutes eventually added up to several hours.

Danneman, a recently widowed mom supporting three young children, was hired in 1990 at $8.10 an hour. She was desperate for every dollar she could squeeze out of an eight-hour shift.

"When you're surviving on a single income, you can't afford to give up a half-hour," she says. "Eight hours paid my phone bill. Eight hours paid my water bill."

In fact, her workday stretched even longer. Even though her shift ended at 3 p.m., Danneman says, it was common to work until 3:30 or 4 p.m. -- and not get a dime for it.

"At three o'clock we dutifully went to the clock and clocked out and went back to our departments for another half an hour, because you could not leave until your department was straightened up," says Danneman. Wal-Mart's policy strictly states that working off the clock is not permitted, but Danneman says a culture of fear pervaded -- employees either worked that unpaid overtime or were fired.

"The company took total advantage of the fact that people would do what they were told because they were desperately afraid of losing their jobs," says Danneman.

Danneman stayed with Wal-Mart for almost ten years, eventually getting promoted to management. Once in the higher ranks, she says, she was regularly instructed to make sure employees' time cards showed only 40 hours -- even if they worked much longer.

She was told to not credit workers for paid sick time and vacation time, and says she got in trouble when she tried to treat them right. She finally quit after being demoted, a move she says Wal-Mart made to try to push her out.

Danneman, a Florida resident, is now part of a legal war being waged in 28 states through lawsuits that accuse the world's largest retailer of taking millions of dollars in unpaid hours from workers by not honoring overtime or breaks for rest or lunches. The Florida resident is among the plaintiffs represented throughout the South by Houston attorney Russell T. Lloyd, a former district judge in Harris County. Wal-Mart (its Sam's Club stores are also defendants) has 349 stores in Texas, and there are roughly 300,000 class members in the Lone Star State alone.

The corporation beat back efforts for class action suits in three other states, although plaintiffs in a Brazoria County suit gained class certification in May from state District Judge Ben Hardin in Angleton. Wal-Mart is appealing Hardin's decision, while plaintiffs are challenging the rulings in the other states.

Attorney Lloyd admits the legal wrangling could go on for years, and that plaintiffs shouldn't expect more than $3,000 to $4,000 each in compensation.

Danneman, whose oldest daughter lives in The Woodlands, and other Lloyd clients say it's not the money that matters. It's getting Wal-Mart to realize they can't treat people like indentured servants.

"On the one hand, their business plan is brilliant," says Danneman. "But on the other hand, you have to look at what they've destroyed as they've built. There was nothing given back. And there was so much taken."

Wal-Mart's Likely Growth Strategies Detailed
  in New Retail Forward Report

In a recently released report entitled "The Age of Wal-Mart," Retail Forward, a global management consulting and market research firm specializing in retail intelligence and strategies, expects that Wal-Mart will continue to grow rapidly and test the outer edges of its brand reach with consumers.

"The Age of Wal-Mart," authored by Dr. Ira Kalish, Chief Economist for Retail Forward, explores five likely growth strategies Wal-Mart may pursue, examining rationales, prospects, and likely effects on competitors and suppliers.

"In order to grow, Wal-Mart will need to sell new categories of merchandise, operate in new geographic locations (including those in the US that it has not yet tapped), appeal to new consumers, obtain greater share of wallet from its existing customers, and operate in new business sectors," Kalish states.

In the next five years, Retail Forward expects Wal-Mart to focus on five key growth strategies:

1. Food. Wal-Mart's growth in the past decade was largely the result 
of its enormous foray into the food market. Although Wal-Mart is    now
the market leader, it still has a long way to go. Retail    Forward
predicts that, by 2006, there will be over 2,000 Wal-Mart  
Supercenters in the US and food sales at Wal-Mart Supercenters    will
account for approximately one-third of the national increase    in
spending on food.

2.  Foreign. "While further foreign acquisitions are expected,  
Wal-Mart will not be successful as a global retailer if its only  
advantage is price," Kalish comments. "It must also provide a  
superior shopping experience, strong localized merchandising, and    a
clear differentiation from competitors," he adds. However, it is  
unlikely that Wal-Mart's overseas expansion will move swiftly    enough
to fuel the company's growth engine. The company's most    probable
courses of action will be 1) to grow its existing    businesses in the
US, extending customer reach, and 2) to move    into other businesses in
the US with the same velocity it moved    into food.

3. Fashion and Family. To get more out of existing stores, and to  
attract a more affluent consumer, Wal-Mart must ramp up efforts in  
apparel and home goods. Wal-Mart is already a major apparel force    in
certain categories, Retail Forward's annual shopper survey    indicates.
If Wal-Mart succeeds in convincing shoppers to view the    retailer as a
destination for fashion needs, it will have a huge    impact on the
market. "Wal-Mart will need to focus on expanding    its range of
merchandise, improving the quality and variety of its    non-food
assortment, and developing strong private and exclusive    labels,"
Kalish states.

4.  Format. To reach more markets and more consumers, Wal-Mart will  
drive growth through multi-channel delivery of its core    businesses.
By opening smaller food stores, developing formats for    urban
shoppers, and potentially leveraging its strengths by    developing
drug, dollar, and convenience stores, Wal-Mart could    overcome the
limitations created by its Supercenter focus.

5.  Fringe. "Wal-Mart will seek to test the outer boundaries of what  
consumers are willing to allow Wal-Mart to be," Kalish comments.    The
company will seek to expand at the fringe of its core business    by
developing sales in highly new and unusual categories.    Wal-Mart's
aggressive rollout of fueling stations could be    followed closely with
the company selling used cars, financial    services, home improvement,
and foodservice.

The Age of Wal-Mart Awaits

Wal-Mart's growth over the next five years will revolutionize global retail markets and render the retail industry and supplier industries far more consolidated than they are today. However, its size will test the limits of its organizational scale. "The challenge for Wal-Mart will
be to sustain growth without straying from its core strengths, and without spreading its wings too thinly," Kalish concludes.

Retail Forward, Inc. (www.retailforward.com) is a globally focused management consulting, market research, and executive development firm specializing in retail intelligence and strategies. The company's syndicated research and executive development program known as the
Retail Forward Intelligence Program, provides members with an authoritative perspective on the retail and consumer products industries. "The Age of Wal-Mart" special report can be purchased for $495 (US) at http://www.retailforward.com/.

Wal-Mart Ordered to Pay in Dispute

AP Online DENVER (AP) - Retail giant Wal-Mart must pay $464,280 to a Nebraska company for patent infringement, a federal judge said in a ruling issued Tuesday.

U.S. District Judge Zita Weinshienk said Wal-Mart infringed on a patent held by Golight Inc. of Culbertson, Neb., for a revolving, portable searchlight. Golight was issued patents in 1996 and 1997 for the light, according to court records.

Golight officials said Wal-Mart, through its Sam's Club stores, began selling a portable light similar to theirs. Golight officials said they notified Wal-Mart in 1998 that they believed the company was infringing on their patent.

No one answered the phones at Wal-Mart's Bentonville, Ark., offices after business hours.

Gerald Gohl said he and Al Gebhardt invented the light based on Gohl's experiences as a cattle rancher in Nebraska. Gohl said instead of using hand-held searchlights during calving season, he had the idea to mount a revolving searchlight on a vehicle.

The two men invented a wireless, remote-control light that could spin all the way around.

Wal-Mart, which imported about 14,600 similar lights from a Hong Kong company, argued Golight's patent was invalid because the device was an obvious solution to a problem. But the judge said the item sold by Wal-Mart was likely a deliberate copy of Golight's product.

Weinshienk also said Golight was due interest and lawyers' fees. The judge rejected Golight's request for extra damages, saying the infringement was not bad enough to warrant the penalty.

Copyright 2002 The Associated Press. All Rights Reserved.

Decorah Illegally Approved Wal-Mart, Court Says

Register Staff Writer
The new Wal-Mart Supercenter in Decorah is scheduled to open Oct. 16.Opponents of the 184,000-square- foot store hope it never does.

In fact, they hope the giant retailer will be forced to demolish the store built in the Upper Iowa River flood plain."Sometimes big corporations make big mistakes," said Karl Knudson, an
attorney representing a group of Decorah residents trying to block the

On Wednesday, the Iowa Court of Appeals decided the Decorah City Council illegally allowed Wal-Mart to build the large store on a flood plain.

The Bentonville, Ark.-based retailer filled the area with dirt to prevent flooding, but critics complain that the runoff will flood the northeast Iowa community and surrounding farmland.

The appeals court reversed a district court ruling that supported the city's actions that allowed the store's construction. The higher court sent the case back to the district court to be worked out, saying the city overstepped its authority.

Wal-Mart spokesman Bill Wertz said the retailer is deciding whether to ask the Iowa Supreme Court to review the case. Wal-Mart says it has 30 days to appeal.

The company plans to open the Decorah store in October and close an existing smaller store there, he said. Wal-Mart could be forced to raze all or part of the multimillion-dollar store, Wertz acknowledged. "It's possible. There are a lot of possibilities," he said.

Decorah City Attorney Richard Zahasky said that about 80 percent of the Wal-Mart building and parking lot sit on land that is not in the flood plain. Other remedies could include seeking a special-use permit or paying a fine to allow the store to remain open, he said.

Knudson said his clients feel the appropriate resolution to the dispute would be to take the building down."That is the normal remedy, the usual remedy whether it's a garage or a big building," he said. "The same principle applies."

Frank Holland, a Wal-Mart opponent who owns about 240 acres of farmland across from the Wal-Mart, is pleased with the ruling "because we're right." The retired engineer doubts the company will be forced to remove the building. "You know that's not going to happen," he said.

Holland's attorney said Wal-Mart officials pushed ahead on the project despite legal challenges. "They made the decision to proceed at their own risk," Knudson said.

Strategic.Programs@ufcw.org (Strategic Programs Strategic Programs)

Wal-Mart lawyers settling customer suits retailer resisted for years
BENTONVILLE ...Under the watch of Tom Mars, former director of the Arkansas State Police,       Wal-Mart Stores Inc's. legal department is settling customer lawsuits it's been fighting for years.

Punished more than 60 times in the last six years by judges for hiding evidence, the company quietly named Mars its top lawyer in May.

In the past three months the country's largest retailer settled long-standing claims ranging from slip-and-fall injuries to abductions of customers in store parking lots, lawyers said. Previously        those who sued Bentonville-based Wal-Mart often found they had to spend more money
litigating than they might recover in damages because the company fought claims to the bitter   end, lawyers said.

Company officials now seem to have more concern than their predecessors about the publicity  of sanctions by judges for keeping evidence from customers and have made their legal department more pro-customer, said Burt Flickinger, managing partner of Reach Marketing, a retail-industry consulting firm.

"They're supposedly trying to become a kinder, gentler Wal-Mart," said Lewis Laska, a  Nashville  lawyer who runs the Wal-Mart Litigation Project, a Web site that tracks lawsuits against the company. "Lawyers are calling me in a mild state of bewilderment, saying, 'They  just offered me $75,000.' I tell  them to take the money."

Wal-Mart, which has 3,300 U.S. stores, has also dropped a 13-year-old policy of paying many of  its outside lawyers a flat, per-case fee, which often discouraged them from doing work needed to
move older cases along, according to company and customer lawyers.

"There is a whole new team there," said Bruce Kramer, a Memphis lawyer who recently settled  two long-standing cases on behalf of customers abducted at Wal-Mart stores and later raped. "They are tough negotiators, but at least they're talking now."

 4,900 SUITS   Customers, employees and other companies sued Wal-Mart, the largest U.S. company by revenue, about 4,900 times in 2000, according to a 2001 report in USA Today that   cited company figures. Wal-Mart spokesman William Wertz said the company no longer provides such figures to   news outlets.

Since 1998, the department has grown from 24 lawyers to about 80, Wertz said. Mars declined to comment on his department's staff and policy shifts. In May, without public announcement,         Wal-Mart replaced its general counsel, Robert K. Rhoads, with Mars, its litigation chief. Mars,  who used to represent clients who sued companies, took the litigation job in January, replacing Ronald

After leaving the state police in the summer of 2001, Mars and David Stills opened the  Fayetteville office of Kutak Rock LLP, an Omaha based law firm. Stills, who has since left the firm  to join Mars'  legal team at Wal-Mart, was the former chief counsel of the Arkansas State Police. Before their stint with the state police, the two worked as law partners for the Fayetteville firm  Mars and Everett Mars received a bachelor's degree in criminology in 1980 from Arkansas  State University and a law degree from the University of Arkansas School of Law in Fayetteville    in 1985.

Mars once worked in Little Rock's Rose Law Firm and practiced law in Springdale and Fayetteville  before he was tapped to head the state police.

 'USELESS EXERCISE'   Robert W. Rack, chief mediator for the U.S. court of appeals that has jurisdiction over suits filed in Kentucky, Michigan, Ohio and Tennessee, told Kramer in 2000 that the court had a policy of refusing to schedule settlement talks between Wal-Mart and people who sued it.

Such court intervention was a "useless exercise" because Wal-Mart never settled, he said in a letter to Kramer, who settled a 12-year-old case July 25 after Wal-Mart's change in settlement practice.

Many customers' lawyers blame Wal-Mart's flat-fee arrangement with outside lawyers for        discouraging company attorneys from spending time needed to respond to customers' demands  to produce documents and other evidence before trial.

 In April, Wal-Mart, again without public announcement, abandoned these flat-fee arrangements with outside lawyers, who are now paid on an hourly basis.  "The change ensures we have  access to the widest range of high-quality outside legal representation," said Wertz.

COURT SANCTIONS   Wal-Mart's shifts in policy and staff came after the retail giant was punished repeatedly over the last six years for concealing or destroying evidence and for delaying customer lawsuits. In 2000, Wal-Mart said it had been sanctioned 60 times since 1997. Company spokesman  Wertz declined to provide an updated figure.

In Kramer's 12-year-old case, a 37-year-old woman was abducted from a Wal-Mart parking lot in Memphis, then raped and murdered. Her husband, Roger McClung, asked Wal-Mart to turn over any studies of parking lot security. Wal-Mart lawyers said there were none.

Later, McClung discovered from a magazine article that Wal-Mart had conducted a study of its parking-lot safety and started a pilot program that used golf carts to patrol parking lots.

The patrols reduced crime against customers, the article said.

In a 1996 case in Beaumont, Texas, a woman sued after she was abducted from a Wal-Mart lot and  later raped. The judge threatened to fine Wal-Mart $18 million for failing to give her lawyers the study that had surfaced in McClung's case.

WAL-MART'S APOLOGY   The judge withdrew the fine in 2000 after Williams, then the litigation  chief, apologized in court for the company's "misguided conduct." Last year, after Wal-Mart settled  the case on confidential terms, a memo from Williams appeared on a legal Web site. It showed he had warned Wal-Mart officials about crime in the company's Beaumont parking lots.

He suggested in the memo that the company start using cart patrols.

In Ohio a woman won a $2 million verdict against Wal-Mart in a suit over a 1992 accident in  which a forklift at a Wal-Mart store crushed her husband.

The woman's lawyers discovered Wal-Mart had hidden evidence of similar accidents.

The Ohio Supreme Court let her sue a second time to recover damages caused by Wal-Mart's withholding of evidence. A trial is set for November.

Information for this article was provided by Alex Daniels of the
Arkansas Democrat-Gazette.

Wal-Mart:No Reason For German Employees To Strike

July 25,2002...WUPPERTAL, Germany  (Dow Jones) - Wal-Mart Stores (NYSE: WMT - News) Inc. said there's no reason for employees at its German stores to go on strike, since Wal-Mart has bound itself to honor union collective bargaining agreements.

Germany 's services union, Ver.di, called on its members who work at Wal-Mart to strike Friday and Saturday to pressure Wal-Mart to become a member of the employers association, which negotiates collective agreements with the union.

"Again this year, we renewed our pledge to follow completely the compensation, blanket and  other wage agreements now and in the future. So there's no reason for a strike," Wal-Mart said in a   statement.

The union complains that Wal-Mart refuses to make any agreements with the union, either     one-on-one or via collective bargaining. Other large retailers in Germany are members of the employers association.

Wal-Mart said Thursday in a statement that managers will do all they can to keep stores in Germany open during the strike.

Ver.di has said it's not yet clear how many workers will participate, but the strike will likely affect at least half of Wal-Mart's 95 German stores.

Wal-Mart Slammed for Firing Worker,
Failing to Give COBRA Notice

Date: 7/17/02 8:22:51 AM Pacific Daylight Time...An Ohio court ruled that Wal-Mart unlawfully failed to give a COBRA notice to a terminated worker, even though the worker couldn't have afforded Wal-Mart's health insurance if she had known she had the right to buy it. COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, requires companies to notify workers who quit or are terminated that they have the opportunity to continue health insurance
coverage under the company's policy at the company's reduced group rates.

After the worker's husband suffered a severe stroke, she requested a leave of absence to care for him full-time. Wal-Mart's Family and Medical Leave Act (FMLA) policy requires workers to    provide medical certification within 15 days after they begin their leave. The husband's doctor        told the worker that he could not fill out the form for several days. Eight days after she began her leave, Wal-Mart fired the worker for not providing the required certification and failed to give her COBRA notice.

The court rejected Wal-Mart's defense that the worker admitted that she couldn't have afforded    the insurance even if Wal-Mart had given her notice. The court explained that workers do not        have to prove that a company's failure to provide COBRA notice harmed them. Rather, it said, COBRA notices are necessary to allow workers to make informed decisions about whether to       elect coverage, and companies violate COBRA when they fail to provide timely notice period.

The court also ruled that Wal-Mart violated the worker's FMLA rights "by not providing her  [with] adequate time to return the medical certification and by terminating her."  The court noted that not  only did Wal-Mart fail to wait the full 15 days its policy allowed, but FMLA regulations require companies to accept medical certifications workers provide after 15 days if the workers provide them "as soon as reasonablypossible under the particular facts and circumstances."
(Strategic Programs)
Chenoweth v. Wal-Mart Stores, Inc., 159 F.Supp.2d 1032 (S.D. Ohio 2001)

Chickasaw jury awards ex-employee $8.5 million in suit against Wal-Mart

Associated Press Newswires
Copyright 2002. The Associated Press. All Rights Reserved.

HOUSTON, Miss. (AP) - A Chickasaw County jury has awarded $8.5 million
to a former Mississippi state trooper who sued a Wal-Mart in Louisiana
after he was accused of shoplifting chewing tobacco.
The jury ruled for Lamon Griggs, who was working for Wal-Mart in
Hammond, La., at the time the accusations were made.
Griggs was hired by Wal-Mart after serving eight years with the Highway
Patrol. He was paid about $70,000 a year as a truck driver and accident
investigator, said Griggs' attorney, Jim Waide of Tupelo.
Waide said his client was wrongly fired in 1997 after he put the
tobacco in his pocket and stepped outside to use a pay phone. He said
Griggs intended to pay for the tobacco.

Waide said Wal-Mart claimed it had a videotape of the theft but the
company admitted at trial that no videotape existed.
Wal-Mart spokesman Bill Wertz said the nation's largest retailer won't
make a decision on an appeal until the judge rules on post-trial

"We were pleased the claim of wrongful termination was dismissed,"
Wertz said. "We believe the award was out of proportion on the
defamation charge."
Waide said Wal-Mart relied upon Mississippi's Employment At-Will
Doctrine in its defense. Waide said the doctrine allows an employer to
fire an employee without proof of wrongdoing.
No charges were filed against Griggs.
Griggs was hired by the Chickasaw County Sheriff's Department after he
was fired by Wal-Mart.

Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved.


Woman wins suit against Wal - Mart
A San Diego federal jury has awarded $535,000 to a former Wal - Mart
employee who said she was sexually harassed because she is gay.

The jury awarded Karla Johnston $35,000 in economic damages for the
sexual harassment and $500,000 in punitive damages, which are aimed at
punishing the company and detering future harassment.

Johnston, who was hired by Wal - Mart in 1997 to prevent shoplifting at
the company's Aero Drive store in the Serra Mesa neighborhood, claimed
that Wal - Mart did nothing after she complained about a manager, Kyle
Harris, harassing her. She contended he repeatedly asked her whether she
was gay, made sexual jokes and passed around pornography during

Johnston said when she complained about his comments, he ignored her
and retaliated against her by leaving her out of company events.

Harris, who was not named in the suit, denied the allegations.

Although jurors found Wal - Mart liable for the harassment, they
concluded the company did not unjustly fire her in 1999.

Yesterday, Johnston said she was pleased with the jury's decision to
award her damages, although she doubted the verdict would prevent future
harassment at the company.

"I wish ( Wal - Mart ) would take some action and not allow other women
in my place to go through what I went through," she said. "But I believe
that Wal - Mart is not going to do anything."

Bill Wertz, a spokesman for the company, which has headquarters in
Bentonville, Ark., said Johnston never complained about being harassed,
adding that Wal - Mart takes sexual harassment complaints seriously.

"Our company has a very strict policy against discrimination," he said.
"Respect for the individual is one of our company's basic principles."

Wertz said Wal - Mart is deciding whether to appeal.

During the weeklong trial, Johnston testified that she complained about
the harassment but company officials failed to investigate. She said
Harris ordered another employee to secretly place a video camera in her

Harris later fired her, saying he videotaped her making personal calls
and doing homework on company time.

Johnston's attorney, R. Craig Clark, said Harris still works at Wal -
Mart and has since been promoted.

The San Diego Union-Tribune
Page C-2
(Copyright 2002)

Marisa Taylor: (619) 293-1020; marisa.taylor@uniontrib.com



September 6, 2002

Newly Released Video Featuring
Wal-Mart Managers And Workers Available At UFCW.org

Go behind the closed doors of management's secret meetings and find out
the reality that Wal-Mart covers up with its smiling face. Intimidation,
threats, profiling, surveillance, illegal firings and Orwellian double
talk are integral parts of a corporate-wide culture and continuous
campaign to crush worker organizing efforts according to Wal-Mart
managers and workers featured in a newly released video, Wal-Mart's War
On Workers.

For the first time, managers who were actually there as it happened
tell the true story of Wal-Mart's war on workers. The words, the faces
and the expressions of the managers and workers paint a grim picture of
the reality behind the smiling face. 

Highlights of the video include:

Supervisory personnel - titled "people managers" -  profile and
identify potential union supporters for heightened scrutiny, discipline,
isolation or termination. Union busting manuals are hidden from workers,
with managers instructed never to allow associates to see or even be
aware of the manual. Secret management meetings are held in out of the
way locations with directions to the meetings covertly slipped to key

Every store manager has a hotline number to report any union activity,
real or imagined, immediately to the "People Department" in Bentonville.
Union busting is a key component of every manager's job, and drilling
anti-union sentiment into every associate is a daily routine with the
constant repetition of Wal-Mart's prescribed anti-union mantra, "I don't
need third party representation, I can speak for myself."

The company's response to worker organizing activity can be ruthless
and devastating to workers. A team from Bentonville descends on the
offending store or Sam's club, and what follows is a steady dose of
harassment, forced meetings, threatened job or benefit loss,
browbeating of individual workers in meetings with multiple supervisors,
promises of promotion or pay increases and discipline and often firings
for those who refuse to capitulate to company pressure.

The video is part of a mass mobilization effort to ignite grass roots
efforts across on the United States to demand that Wal-Mart obey the
law, respect the rights of workers and create good jobs with living
wages and family benefits. As the largest employer in the United States
without over 900,000 American workers, Wal-Mart is setting, and sinking,
the standards for wages, benefits and corporate conduct.

The National Labor Relations Board (NLRB) - and independent government
agency - has issued complaints against the retailer in 25 states for
illegal firings, threats, intimidation and coercion.

Visit UFCW.org and see the video in its entirety. Bona fide reporters
can receive a copy of the video.

(The 1.4 million member United Food and Commercial Workers
International Union (UFCW) is America's neighborhood union with members
working in local neighborhood grocery stores in virtually every
community. UFCW members working in packing houses and food processing
plants put dinner on the table for America's families. In nursing homes
and hospitals, the UFCW is giving care a voice. And in chemical,
textile, garment and manufacturing  plants, the UFCW is making it in the U.S.A.)      

For more information, contact Greg Denier at 202-466-1591, Jill Cashen
at 202-728-4797 or email press@ufcw.org

Wal-Mart: Timing of Cover Was Mistake

Saturday, August 31, 2002 4:58 p.m. EDT

RALEIGH, N.C. (AP) - Wal-Mart executives said it was a mistake to mail a company publication featuring Republican Senate candidate Elizabeth Dole on the cover less than two weeks before the GOP primary.

The publication, sent to nearly 200,000 North Carolina  residents, was meant to promote literacy - not Dole's candidacy, they say.

"There was nothing remotely political in the intent," Jay Allen, Wal-Mart's senior vice president for corporate affairs, said Friday. "It was a matter of coincidence and an honest mistake."

Allen said the Bentonville, Ark., company would send a letter to the Federal Election Commission informing it of the mailing to make sure no campaign laws were violated.

Dole's rivals said the mailing was a blatant attempt by the nation's largest retail chain to influence North Carolina's primary.

"We've had the political titans invade North Carolina attempting to influence the electorate," said Jim Snyder, a Lexington lawyer and one of six GOP opponents of Dole seeking to replace Jesse Helms.

Wal-Mart requested the Dole interview in March, about the same time the company's executives were contributing the maximum amount allowed under federal law to her campaign.

Copies of "Source" were mailed to 195,000 North Carolina homes and several million residences nationwide.

The cover features a picture of Dole with an American flag flying in the background.

In an article titled "Elizabeth Dole would like you to read this article," Dole talks about the need to encourage literacy. The article does not mention the election.

Wal-Mart officials said they approached Dole about appearing on the cover of their annual literacy issue after Oprah Winfrey  turned the company down.

"They knew she was active on the issue and wanted her to talk about literacy for the back-to-school issue," said Jack Cox, a Dole campaign spokesman. "They did not tell us when it would come out. They were very specific to say they did not want to talk politics or mention the

On March 4, David Glass, the chief executive officer of Wal-Mart, and his wife gave the Dole campaign a total of $4,000, the maximum allowed for individuals, according to campaign finance records.

Eight days later, Wal-Mart's political action committee contributed $10,000 to Dole's campaign, the maximum permitted for a PAC.

Copyright © 2002 Associated Press. All rights reserved.


Wal-Mart Health Suit Is Class-Action
Saturday, August 31, 2002 2:28 p.m. EDT
ATLANTA (AP) - A federal judge has granted class-action status to a lawsuit that claims Wal-Mart's denial of health insurance coverage for birth control is unfair to female employees.

U.S. District Judge Julie Carnes said Friday that all women working for the nation's largest retailer after March 2001 could pursue claims against the company if they were using prescription contraceptives.

Lisa Smith Mauldin, a customer-service manager at a Wal-Mart store in Hiram, filed the lawsuit in October asking the court to declare the company's health plan illegal and to order Wal-Mart to reimburse her and other employees for uninsured prescription contraceptives.

Her lawyer, George Stein, called the judge's decision to grant class-action status "a major victory for the working women of America."

"A lot of working women in this country are single and have children and have to pinch their pennies to make ends meet," he said. He said the company saves about $5 million a month by denying birth control coverage.

Wal-Mart attorney Mark Casciari noted that the judge had yet to address the merits of the lawsuit and had declined to include male Wal-Mart employees whose spouses use birth control.

"For that reason, I don't see this as a major victory for anybody," Casciari told The Atlanta Journal-Constitution.

The company is reviewing the ruling and hasn't decided whether to appeal, Wal-Mart spokesman Bill Wertz said Saturday.

Copyright © 2002 Associated Press. All rights reserved.

Date: Wed, 28 Aug 2002 16:13:33 -0400

The Wal-Mart suits raise a red flag

August 28, 2002

Our position is: Hard-driving labor tactics may deserve credit for Wal-Mart's industry-low operating costs.

Some rules of labor are non-negotiable, regardless of whether a company is unionized. Among them: Hourly employees don't work for free. Lunch breaks are for lunch. Employees shouldn't be locked in a building with no way of escape.
Yet Wal-Mart Stores, the nation's top retailer known for the slogan "We sell for less," is accused of violating all three rules in unfair labor complaints leveled in lawsuits around the country.

As reported Aug. 25 by The Star's Bonnie Harris, current and former Wal-Mart employees in Indiana have joined those in 28 states that have filed legal action, alleging among other things that the company forces free labor from employees and rewards managers with bonuses for limiting overtime costs.

One of the more disturbing allegations came from stock clerks and cleaning crews who work overnight to prepare for the next day's business and are locked in stores for security reasons, reportedly with no way out in event of emergency.

According to a Northwestside store employee, a co-worker once fell ill, and medical personnel had to wait outside the store for an hour until a day manager arrived with a key. Another time, the same worker said he couldn't leave after learning that his mother had a stroke. 

A hearing is scheduled for December in Marion Superior Court to determine whether the Indiana suit should be certified as a class action to cover more than 160,000 current and former employees.

Though Wal-Mart denies the allegations, the complaints become more credible with each new lawsuit. Currently, there are suits alleging off-the-clock work in Ohio, Iowa, Kentucky, Louisiana, Nevada, New Mexico, New York, California, Texas, Oregon, Georgia and Indiana.

A Wal-Mart spokesman says it's against company rules to require someone to work without pay and doors must be locked at night to keep burglars out and prevent employee theft. He admits that store managers refrain from approving overtime because of budget constraints.

In 2001, Wal-Mart stores, including Supercenters and Sam's Clubs, had $191 billion in net sales. The company employs more than 1.2 million worldwide and plans significant expansion.

Clearly, the company's hard-driving labor tactics are part of the reason its operating costs have reached an industry-low of 16.6 percent of sales. In comparison, Sears' costs are 24.9 and the industry average is 20.7 percent.

It would be a shame if Wal-Mart's success was built on the backs of workers denied the most basic protections.

Wal-Mart Hit With Labor Suits
Employees in 28 states, including Indiana, cite pay, break, lock-in issues.
By Bonnie Harris
August 25, 2002

Former Wal-Mart employee Danielle Hause was about five months pregnant when she began working in the deli of the store at 7325 N. Keystone Ave. two years ago.
She started at $6.75 an hour, usually putting in 40 hours a week -- or more. She alleges she often had to clock out, then spend another hour -- without pay -- cleaning the deli or filling in for workers who called in sick. 
Hause, 22, said complaints to her supervisor went nowhere. It didn't matter that she had clocked out; the deli had to be cleaned. Moreover, she needed the job.  Alleging similar complaints, former and current Wal-Mart Stores' employees in 28 states have sued the massive retailer. A Dec. 2 hearing is set in a Marion Superior Court to determine whether the Indiana case will be certified as a class action, which could include as many as 166,000 former and current hourly employees -- including Hause -- who have worked for Wal-Mart stores in Indiana since 1994. 
Wal-Mart Stores Inc., headquartered in Bentonville, Ark., owns Wal-Marts, Wal-Mart Supercenters, Sam's Clubs and distribution centers.

Wal-Mart is the largest private employer in the state and in the country. The company, which also has overseas operations, had revenues of $218 billion in 2001. Former Indiana Wal-Mart employees filed their lawsuit two years ago, alleging they were:  * Forced to clock out, then required to work additional time without pay. * Not always given rest or meal breaks, even though store policy required them. * Not paid for hours if they forgot to clock out and didn't notice
discrepancies in their paychecks. * Locked into stores during work hours and not allowed to leave, even though they had clocked out. The allegations may not have merit, said Wal-Mart corporate spokesman Bill Wertz. "We do pay overtime, and if any manager or supervisor either requires or requests or even tolerates work that is not compensated, we
discipline them, even fire them," he said. Rest and meal breaks also are a policy, even though Indiana law doesn't require employers to offer them.

In court, the corporation will offer testimony from other Indiana Wal-Mart employees, hoping to persuade the judge that the allegations are neither a practice nor a pattern at their stores.
Indianapolis resident Robert Scott said in a sworn statement that he had to work overtime without pay when he unloaded trailers of merchandise at a Northwestside Wal-Mart about 10 years ago. 
He and other night-shift workers had to stay until the job was done, he said, even after they had clocked out. When he and about 10 other employees complained to the store manager, they were promised it would be "looked into." But it never was, said Scott. Workers also didn't always get their rest breaks, he said. Nor were they allowed to leave the locked store until a day manager
came on duty. When Scott got a call one night that his mother had had a stroke, he couldn't leave. His supervisor, Scott said, had no key. On another shift, a co-worker fell ill, said Scott, and a emergency medical rescue squad had to wait outside the store for more than an hour until a day manager arrived. Stores that aren't open round-the-clock are locked for security and toguard against theft, said Wertz, adding, "There is supposed to be somebody there to let people out."
About 20 former Indiana Wal-Mart employees have given sworn depositions, alleging Wal-Mart owes them money for time they worked off the clock.Among them is Danielle Buckley, who in her deposition said that when she worked at a Northwestside Sam's Club in the mid-1990s, she didn't always get rest or meal breaks and was required to attend meetings without pay. As a cashier, she said she also was asked to clock out, then come back and count out her cash drawer. In Indiana, former Wal-Mart employees are seeking back wages and interest on all unpaid wages from the date that money was earned. Wal-Mart has "a reputation of not paying workers a living wage," said local labor attorney Bill Groth of Fillenwarth Dennerline Groth & Towe.

Wal-Mart prides itself on keeping prices low by holding wages down and fighting unionization at every turn, Groth said. The retailer settled a class-action suit in Colorado two years ago. The
lawsuit claimed about 60,000 Wal-Mart employees there worked off the clock.
A lawsuit in Gallup, N.M., was settled after 120 employees attested to widespread unpaid work.
Wal-Mart's Wertz said that case wasn't a class action, the problems were isolated to one store, and the manager was fired. As far as the Indiana lawsuit goes, said Groth, "I would expect that
Wal-Mart would put up a very vigorous and extremely well-funded defense." Wertz insists employees who miss breaks are supposed to be compensated.
"We have provisions in place to make adjustments to time records, and we do that -- regularly and frequently," he said. As a customer, he said, he doesn't take kindly to workers who say they
can't help him because they are on break.  "We emphasize to our associates that customers come first," he said. "That's why we believe we've been successful in the marketplace."


US Senate Measure Would Let           Non-Banks Offer Checking Accts

By DAWN KOPECKI           

WASHINGTON -- A seemingly innocuous amendment to a noncontroversial bill in the Senate would kick open the door for companies such as Wal-Mart Stores (WMT) to offer federally   insured bank accounts without Federal Reserve oversight.

The measure's sponsor, Sen. Robert Bennett, R-Utah, is blocking widely supported legislation in the Senate that would allow banks to start paying interest on business checking accounts and allow the Federal Reserve to pay banks interest on their own reserves held at the central bank.

Bennett wants to attach an amendment to that bill expanding the powers of so-called industrial  loan corporations. Chartering or buying an industrial bank is one of the only ways non-bank businesses can offer bank-like services to their customers.

They are also less regulated than traditional banks, falling outside the Federal Reserve's jurisdiction and most federal banking laws. But federal law limits the type of products they can offer to federally insured savings accounts and other savings products.

Bennett's amendment would allow industrial banks also to offer their customers interest-bearing checking accounts.

"From our perspective, it's really just a question of equal treatment," said Bennett spokeswoman Mary Jane Collipriest.

Senate Banking Chairman Paul Sarbanes, D-Md., is said to oppose Bennett's amendment. While Sarbanes' office didn't return calls seeking comment, lobbyists say the legislature is hopelessly deadlocked and may not pass at all this year.

The use and size of industrial loan corporations has rapidly increased in recent years - from   total    assets of $42.9 billion in 1999 to $115.1 billion in 2001 - and has raised some questions in Washington.

BMW (G.BMW), American Express Co. (AXP), AT&T Corp. (T) and postage meter maker Pitney   Bowes Inc. (PBI) all have one. They are primarily used by brokerage firms such as Merrill Lynch & Co. Inc. (MER), however, which has the largest industrial bank, to  sweep cash from brokerage clients' accounts into federally insured savings accounts held at an
industrial bank.

With favorable tax laws and liberal regulations, Bennett's home state of Utah houses the most    industrial banks with 23, including Merrill's. California, which has a similar tax and regulatory environment, has 21. Another 12 industrial banks are spread throughout five other states that        offer the special industrial loan corporation charter.

"It's a terrific charter," said Washington, D.C., bank and regulatory consultant Karen Petrou.  She said many commercial companies that would otherwise be barred from establishing or  buying  a bank can still perform many of those functions by chartering an industrial loan corporation.

The charter has recently attracted attention from Wal-Mart, which has an application pending before  the California Department of Financial Institutions to buy a small industrial bank in that state.

Federal bank regulators are said to oppose Wal-Mart's application as well as Bennett's amendment, which would allow Wal-Mart, if approved, to offer their customers checking and savings accounts along with discounted diapers and shampoo.

A Federal Reserve spokesman would not comment on Bennett's amendment. But the agency  has warned lawmakers in the past to the dangers of expanding the powers of industrial banks.

"Industrial loan corporations and nonbank banks have virtually all of the powers of commercial banks, and the ILC charter has become available to any commercial company," Fed Gov. Mark Olson told House lawmakers in March. But they operate "in a less constrained regulatory environmentthan do banks and thrift institutions."

"This lack of consolidated supervision and regulation raises supervisory and safety and soundness issues because owners and affiliates of these insured institutions are allowed to  take risks and  conduct operations that may have a material effect on the insured institution," he said.

-By Dawn Kopecki, Dow Jones Newswires; 202-862-6637; dawn.kopecki@dowjones.com
Updated July 22, 2002 12:24 p.m. EDT