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RWDSU President
Slams Wal-Mart Hypocrisy
Earth Times
June 27th, 2008
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The president of the Retail, Wholesale and Department Store Union today
blasted the announcement by Wal-Mart that it would notify its employees
about the Earned Income Tax Credit (EITC) and challenged the giant
retailer to take similar steps to notify workers of their legal right to
organize for union representation.
RWDSU President Stuart Appelbaum,
whose union has led efforts to prevent Wal-Mart from opening in New York
City, said that "rather than encourage employees to sign up for a tax
credit for low income workers, Wal-Mart ought to respect the right of
workers to a union contract and middle-class wages."
"If hypocrisy was an Olympic sport
Wal-Mart would hold the record for gold medals," Appelbaum said, adding
that the company, whose revenues now top $300 billion, has "ruthlessly
fought every effort by workers to organize."
Pointing out that Wal-Mart officials
said they would inform workers about the EITC through its internal Web
site, messages on pay stubs, and notices in store break rooms, Appelbaum
said the retail giant should use the same means to inform its employees
of their legal right to organize for union representation.
"Since none of Wal-Mart's executives
seem to understand that workers actually have the legal right to
organize I'm more than happy to send them a copy of the law," Appelbaum
said.
With more than 100,000 members working
in the retail sector and other industries, the RWDSU is an affiliate of
the United Food and Commercial Workers union.
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Study: Bennington Wal-Mart would hurt other businesses
By AP,
Rutland Herald
June 26th, 2008
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Doubling the size of Bennington’s
Wal-Mart store would provide short-term growth of about 75 new retail
jobs, but would trigger-long term job losses at it hurt local
businesses, a new economic study has found.
Economic consultants Kavet, Rockler &
Associates said construction costs on the expansion project would be
about $16 million, and that sales would be expected to more than double,
to about $48 million in the first year of the bigger Wal-Mart’s
operations.
But it said, “Most of the expanded
store’s growth will come at the expense of existing stores in the served
market area, with some impact on downtown but even more on commercial
areas north of the town center.
On the jobs front, the report said,
“In 2009, operation of the expanded store will generate a total of about
78 jobs, mostly in the retail trade sector. Total county employment
impacts over the longer term, however, shrink to zero by 2013 and
ultimately decline by about 35 jobs,” the report states.
The report estimates that 10 to 15
percent of the existing downtown businesses are likely to be hurt by the
Wal-Mart expansion, including those selling clothing, beauty and hair
products, sporting goods, electronics, eye wear and home and hardware
goods. It added that empty storefronts may remain so for longer periods.
The Wal-Mart expansion, proposed by
store owner BLS Bennington, LLC, would roughly double the current
store’s size to 112,000 feet. It has been hotly debated in town for
years.
The town passed a cap on the size of
retail stores at 75,000 feet, only to have residents overturn it in a
special election in April of 2005.
The town granted permits for the
project in January of 2006; it’s now before the District 8 Environmental
Commission.
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Wal-Mart sued by customer in premises liability complaint
By Steve Gonzalez,
The Madison St. Clair Record
June 25th, 2008
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A woman who was injured at the
Highland Wal-Mart filed a personal injury suit against the retailer in
Madison County Circuit Court June 23, alleging the property was not kept
in a reasonably safe condition. Maureen Neal claims she was at the
Wal-Mart on Nov. 5, 2007, for the purpose of assisting one of her
students in unloading merchandise from a Wal-Mart trailer when one of
the trailer doors swung closed on her leg and foot without warning. Neal
claims Wal-Mart owed her a duty to exercise ordinary care to see that
its property was reasonably safe for the use of those lawfully on the
property. Despite that duty, Neal alleges Wal-Mart was negligent by
failing to properly secure the trailer doors and failed to warn or
otherwise notify her that the trailer doors were not secured. She claims
the incident has caused and will continue to cause her to incur medical
expenses, lose income, sustain pain and suffering and suffer from a
disability. Represented by Joseph Hillebrand of Kassly, Bone English &
Hillebrand in Belleville, Neal is seeking a judgment in excess of
$100,000, plus costs. The case has been assigned to Circuit Judge Daniel
Stack.
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Anadarko family sues Wal-Mart for developing child porn
KSWO
June 25th, 2008
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Anadarko_The man accused of a horrible
case of child abuse, child pornography, and incest, will likely spend
the rest of his life in prison for the crimes, and the victims' family
wants one of the world's largest corporations to pay for not reporting
his disgusting actions. The victims' family says the Wal-Mart store in
Anadarko developed hundreds, possibly thousands, of child pornography
photos of the victims before ever calling police. The two victims from
Anadarko are sisters - 13 and 17 years old - and earlier this year their
great uncle pled guilty to abusing and taking pornographic photos of
them. Police learned about Robert Strange's horrible crimes after
receiving a phone call in February from the Wal-Mart photo lab in
Anadarko. The lab reported pornographic photos of the two victims, and
it was later reported that they were not the first photos of that nature
Strange had taken. "We found out that Wal-Mart, for a period of several
years, had been developing the child pornography," says the victims'
attorney, David Butler. Butler says Wal-Mart broke Oklahoma laws
regarding child pornography. "If they see anything they even question to
be child abuse or pornography, they're required to report that
immediately to law enforcement," he says. "Obviously, that didn't happen
in this case because it had been going on for two or three years."
Butler says that Robert Strange may be one of his best witnesses, since
he admits he took the photos and had Wal-Mart print them. "If it had
been reported the first time it was brought in there, he could have been
arrested the first time, and these girls would not have had to undergone
the abuse they suffered for several more years," says Butler. Butler
admits that taking on one of the world's largest corporate giants will
be an uphill battle, but he says the two victims deserve it. "They have
unlimited resources, and you know you're in for a fight, but we believe
it's a valid fight, and we're willing to go the distance for our
clients." The lawsuit is filed in Caddo County, and although Butler
would not say just how much money the family is seeking, he says it's
more than $10,000. 7News contacted Wal-Mart's legal department, and a
spokeswoman there said that they have not received a copy of the lawsuit
yet. However, they are beginning to research the matter after learning
of the story.
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August
hearing set for former Wal-Mart executive
Associated Press
06.24.08
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BENTONVILLE, Ark. - A hearing is set
for Aug. 22 over whether convicted former Wal-Mart executive Tom
Coughlin is entitled to his retirement package valued at up to $15
million.
Coughlin, who was convicted of
embezzling from the world's largest retailer, filed a counterclaim
against Wal-Mart (nyse: WMT - news - people ), accusing the company of
conducting a "witch hunt" against him. Coughlin, the former vice
chairman of Wal-Mart Stores Inc., was sentenced to 27 months of home
detention, plus 1,500 hours of community service. He also had to pay
$400,000 in restitution.
In a response to Coughlin's
counterclaim, Wal-Mart says the former executive is not entitled to his
retirement package because he defrauded the company. Coughlin pleaded
guilty in 2006 to five counts of wire fraud and one count of tax
evasion.
The Bentonville-based retailer also
denied Coughlin's claims that Wal-Mart committed a tort of outrage,
causing him mental anguish.
Copyright 2008 Associated Press. All
rights reserved
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Wal-Mart spin is thick with
lies
By David Fick,
Hi Desert Star
June 24th, 2008 [back to top]
“Wal-Mart benefits people,
environment” was the title of Mr. John Mendez’s Guest Soapbox Saturday.
Mr. Mendez, a senior manager of public
affairs for Wal-Mart, starts his spin early with a fantasy engagement
with me. I’ve heard enough “that’s a good question” to know what follows
is usually not a good answer.
“As Mr. Fick stated,” he begins, and
then proceeds to say things I never stated, showing his well-worn craft
that makes him the big bucks.
Mr. Mendez states a new store is
needed “because Yucca Valley’s population has increased almost
two-thirds since the early 1990s.” Yet Wal-Mart’s own environmental
impact report analysis says the 1990 YV population was 16,403 and 2005
YV population 19,726. That’s a 19 percent increase, hardly two-thirds!
Don’t people ever read these EIRs?
Also from the Wal-Mart EIR: “Utilizing
employment factors … the proposed project is anticipated to generate
approximately 589 jobs.” But Mr. Mendez in his Soapbox is, once again,
saying something different, that Wal-Mart Supercenter plans to employ
about 410 people (260 current, 150 new). That’s 410, not 589, underpaid,
off-the-clock and videotaped people working for that big global company
in Arkansas. What’s the truth here?
There’s a lot of tall-talking about
Wal-Mart Supercenter and that’s all it is. Some dismiss it as spin,
exaggerations or even falsehoods, but they do their job. Wal-Mart spends
millions per day on public relations to impress people and send the
profits along to Arkansas.
MBCA benefits people and the
environment of the Morongo Basin without the lies and money. Instead, we
fight with heart and truthful information.
Hope to see you tonight at Yucca
Valley Community Center, before 6 pm.
David Fick
Morongo Basin Conservation Association
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Naked Truth Investing: Wal-Mart customers 'save money' and 'live better'
while Wal-Mart employees pay more for their 401(k) plan and retire broke
By Daniel Solin ,
Blogging Stocks
June 24th, 2008 [back to top]
This is the part of a new series of
columns called "The Naked Truth," by retirement expert Dan Solin. Please
bring him your questions, in the comments box, and he will answer as
many as he can. Wal-Mart (NYSE: WMT) is the world's largest company with
over $380 billion in revenues. It's success is based on it ability to
squeeze vendors to the breaking point. The largest manufacturers are no
match for this retail giant. Wal-Mart's 401(k) plan has over $9.5
billion in assets. Its modestly paid employees count on this plan to
fund their retirement. A recent class action lawsuit makes allegations
which, if true, will cause many of these employees to be great
disappointed. The suit alleges that Wal-Mart's 401(k) plan pays "retail"
for its mutual funds, instead of the institutional rate for the same
funds. Institutional funds require a minimum investment ranging from
$100,000 up to $1 million. Clearly, not a big hurdle for Wal-Mart's mega
401(k) plan. The difference in cost between retail and institutional
funds is significant. The average annual expense ratio for retail equity
mutual funds is around 1.50%. The same expense ratio for an
institutional fund is around 0.50%. A 1% difference in costs doesn't
seem like much but it can add up. On an initial investment of $50,000,
it could cost investors as much as $19,000 over 20 years, assuming an 8%
rate of return. The failure to insist on lower cost institutional funds
is not the only problem with Wal-Mart's 401(k) plan. It is populated
with high expense ratio, actively managed funds, despite the fact that
lower cost, actively manged funds, with similar benchmarks and better
performance, are available from fund families like Vanguard. Yet even
these obvious deficiencies still don't address the primary problem with
the plan. Why are actively managed funds included at all? The plan
should consist solely of low-cost, broadly diversified, domestic and
international stock and bond index funds, and target retirement funds,
made up of low-cost index funds. The complaint alleges that, if Wal-Mart
had followed this practice, the plan would have increased in value by an
additional $140 million for the six-year period ending January 31, 2007.
Has Wal-Mart lost its negotiating mojo? Or has it succumbed to a flawed
401(k) system that places the interests of employers, brokers,
consultants and the mutual fund industry above those of its employees?
Dan Solin is the author of The Smartest Investment Book You'll Ever Read
(Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read
(Perigee Books, June 24, 2008). Visit his website at
Smartestinvestmentbook.com
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Size of
Northcross Wal-Mart Drastically Reduced
Austin Business Journal
June 24th, 2008
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Wal-Mart plans to cut the size of its
controversial store at Northcross Mall almost in half.
The retail giant already had city
approval to build a 192,000-square-foot store on the site at Burnet Road
and Anderson Lane. But now Wal-Mart says it will reduce the store's
footprint to 99,000 square feet as part of a nationwide reevaluation of
its new stores.
The planned store will now be just one
story instead of two and will have surface parking in lieu of a garage.
Groceries will remain part of the merchandise mix but a garden center
and auto shop will be eliminated in the new plan, a spokesperson says.
The design aesthetic of the building will remain largely intact.
Construction has not yet begun on the store since developer Lincoln
Property Co. has been concentrating its attention on another portion of
the site.
Since the plan was unveiled in late
2006, Lincoln Property Co., the group redeveloping the aging mall, and
Wal-Mart have drawn fire from area residents who said the store would
create tremendous traffic problems in the area among other issues.
Several lawsuits were filed but none was successful in stopping the
development.
Lisa Elledge, senior manager of public
affairs and government relations for Wal-Mart says the company is
currently working to complete the modifications to the store. She says
once Wal-Mart and the developer "have finalized the site plan...the
parties intend to provide more details to the city of Austin and the
surrounding neighborhoods."
Responsible Growth for Northcross, a
group of area residents and business owners that formed to oppose the
Wal-Mart plan, said the scaled back store is a better fit for the
neighborhood. RG4N had been planning to appeal its lost lawsuit
decision, but the group now says that won't be necessary.
"We still think a mixed-use
development is the ideal (use) for that location, but at least their new
plan is something that can work without hurting the surrounding
neighborhoods and small businesses," says Hope Morrison, RG4N's
president.
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Whole
Foods and Wal-Mart Execs Agree: We’re Not Green
By Lisa Everitt ,
B Net
June 23rd, 2008
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Put a Wal-Mart guy and a Whole Foods
guy on the same stage to talk sustainability at a conference in Boulder,
and what happens? Interesting things.
Fresh from their morning yoga and
organic luncheon, a not particularly friendly audience of execs and
marketers heard Wal-Mart senior director of corporate responsibility
Rand Waddoups say: “Wal-Mart is not a green company.” Countered Michael
Besancon, southwest regional president for Whole Foods Market: “If
Wal-Mart is not a green company, then Whole Foods is not a green
company. We do a lot of green things, and we have green intentions, but
we don’t believe that we are, and we try not to say that we are.” Later
in the discussion, asked by eco-journalist Simran Sethi whether Wal-Mart
sells products containing genetically modified organisms, Waddoups
answered, “Everybody is.”
Sethi started to pursue the point but
Besancon interrupted. “We are too,” he said. “We sell GM foods. We can’t
source corn and soy in every product… we can’t control everything
manufacturers do.” Because of this, consumers as well as retailers must
push for transparency of the supply chain, Waddoups said. Added Besancon:
“The more questions you ask, the more answers you get that you don’t
want to hear.”
Sustainability, Besancon added,
creates a great deal of tension between the three legs of the “triple
bottom line”: People, planet, and profits. Replacing plastic bags, which
cost a penny each, with paper bags, which cost as much as 17 cents each,
is not a zero-sum move.
Waddoups was the salty snack buyer at
Wal-Mart, sharing a cubicle with the water buyer, when the company
responded to Hurricane Katrina more quickly and effectively than the
government did — starting with 18-wheelers full of bottled water. That
showed him — and the rest of management — that the world’s largest
company could be a potent power for good. “We’re trying to be as good as
we were during Hurricane Katrina all the time,” he said. “What’s
happening now with the climate is like Hurricane Katrina in slow
motion.” Besancon, who went to work at a southern California health food
store 38 years ago, noted that Waddoups started corporate and adopted a
sustainable viewpoint, whereas “I started out as a hippie and became a
hard-assed businessman.” From my notebook:
•Food price inflation is the most
challenging aspect of the current economic environment for Whole Foods.
Having been able to take advantage of “incredible price elasticity” on
high-end foods, the company now has to add value to support its higher
prices, such as the “Whole Trade” certification. Asked to go beyond
what’s already required by Fair Trade and Rainforest Alliance, vendors
have complained but more than 70 are participating in the new program,
Besancon said.
•While Wal-Mart asks its 60,000
vendors to support sustainability measures, the company has found that
operational changes are much easier to manage. “We (once) thought of
energy expense as a noncontrollable expense,” Waddoups said, citing a
supercenter in Las Vegas that cut energy expenses 45 percent in two
years.
•Sometimes a sustainability change is
a win-win-win. Wal-Mart now sells Radio Flyer tricycles out of the box,
“because who needs a box?” Waddoups said. Because selling it without a
box meant it had to be easier to assemble, it’s also easier to display,
so “sales are great on it.” Reducing waste has always been a cultural
value at Wal-Mart. “Sam Walton was the master of getting rid of waste,”
Waddoups said.
•If last year was the year of the
compact fluorescent, and this year is the year to bring your own bag and
stop drinking bottled water, what happens next? “Spoilage,” said
Besancon. “We discovered we were throwing a lot of stuff out.” In his
four-state, 38-store region, Whole Foods composted 15 million pounds of
trash last year that would have gone into landfills — “and that’s after
food banks” take anything that’s still edible.
•While Waddoups is one of a
three-person corporate responsibility team, Wal-Mart established
sustainability captains at 40,000 stores. Each employee has a “Personal
Sustainability Project” that ranges from quitting smoking (20,000
people) to making all Wal-Mart seafood compliant with Marine Stewardship
Council guidelines (fish buyer Peter Redmond). “Sustainability is about
individual choices in the aggregate,” Waddoups noted — and Wal-Mart CEO
Lee Scott has told associates that sustainability will be key to getting
promoted.
•Michael Pollan’s accusation of
“industrial organics” in “The Omnivore’s Dilemma” was a wake-up call for
Whole Foods, Besancon said. While he supports buying local and is
conscious of food security, his overriding goal for nearly 40 years has
been to remove synthetic chemicals from agriculture “and the reason we
support industrial organic is because that’s how it gets done. It wasn’t
going to get done one little farm at a time.” When he heard that
Wal-Mart was the No. 1 seller of organic produce and organic cotton
clothing, “I said, damn, my life has been successful. I won.”
•Whole Foods and three personal care
manufacturers (Avalon Natural Products, Nutri Biotics? and Beaumont
Products) were sued June 12 by California Attorney General Jerry Brown
for selling products that contain a potential carcinogen, 1,4-dioxane.
“What the hell’s up with Jerry?” Besancon asked. “Why in the hell
doesn’t he sue Revlon? I don’t get it.”
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Local News for Northwest
Arkansas
By Kimberly Morrison,
The Morning News
June 23rd, 2008 [back to top]
Wal-Mart Stores Inc. in 2007 continued
to slip down a list of corporate reputation rankings, according to a
survey.
The Bentonville-based retailer ranked
No. 44 on the Harris Interactive report, which ranks the reputations of
the country's 60 "most visible" companies based on consumer perception
surveys.
It was the third consecutive year
Wal-Mart's score on the list declined.
Wal-Mart's slipped score was the also
the third largest rating change, trailing behind Bank of America and
Halliburton Co., which saw more significant declines in reputation
scores.
Wal-Mart has similarly dropped down
Fortune Magazine's list of America's most admired companies.
Wal-Mart in 2003 and 2004 was
America's No. 1 most admired company on Fortune Magazine's list, but
fell to No. 12 in 2005. The retailer in 2007 dropped to No. 19.
Wal-Mart isn't too concerned with
reports on its reputation.
"At a time when the public and
Wal-Mart customers specifically are being pressed financially to make
ends meet, we think the ultimate measure of reputation is sales," said
Greg Rossiter, a Wal-Mart spokesman. "Our sales over the last several
months demonstrate pretty clearly that the public trusts Wal-Mart to
help them save money to live better."
The retailer has in recent years set
out to be a better corporate citizen by incorporating health care and
environmental sustainability initiatives into its business. But it may
take time for the public to shift their perceptions of the retailer,
said Sam Waltz, the director of Sam Waltz & Associates and a specialist
in corporate reputational management.
"When there's acute reputational
damage that becomes chronic reputational damage, it becomes a very
difficult thing to regain positive attributes," Waltz said.
"In other words, it can take some time
to get public credit for the good work Wal-Mart is doing now. It could
take months and years because there's people who look at them with a
political paradigm and just do not want to give them credit."
Nearly half of the American public
surveyed said that companies need to address global social issues such
as poverty, hunger and disease. Yet treatment of employees, including
labor practices and human rights, continued to be a the most important
measurement in evaluating a company, according to the report.
Harris Interactive, a Rochester, New
York-based market research company, surveyed more than 20,000 people and
asked them to rate on a point scale a company's reputation on 20
attributes like vision and leadership, emotional appeal, financial
performance and social responsibility.
Each survey participant is asked to
rate one randomly selected company from the 60 included and each is
given the option to rate a second company.
About 535 people rate each company.
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Mother's
Lawsuit Blames Wal-Mart for Premature Birth
FoxNews.com
June 21st, 2008 [back to top]
HAGERSTOWN, Md. — A Hagerstown woman
who filed suit against Wal-Mart is asking for damages for herself and
her son, who, she says, was born prematurely after she fell in a store.
Radhia Haj-Mabrouk contends in the
suit filed Tuesday in Washington County Circuit Court that she slipped
on water on the floor in the Wal-Mart on Garden Groh Boulevard in August
2005, fell and was hurt.
Haj-Mabrouk was pregnant then and her
son was delivered by emergency C-section later that day, the suit
says.Haj-Mabrouk is seeking $1 million on her behalf and $2 million on
behalf of her son, Lofti Haj-Mabrouk, according to the lawsuit.
A Wal-Mart spokeswoman said Friday
that Wal-Mart had not yet been served with the lawsuit.
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Like Clock Work: Wal-Mart Faces 80 Class Actions, Most from
Off-The-Clock Allegations
By Kimberly Morrison,
The Morning News
June 21st, 2008
[back to top]
Wal-Mart has worked overtime to show
its kinder, gentler side, but accusations of workplace misdeeds are
surfacing in a slew of class-action lawsuits that continue to challenge
the retailers new image.
There are at least 80 class-action
lawsuits in 41 states pending against the Bentonville-based retailer, 76
of which stem from wage and off-the-clock issues, according to
Wal-Mart's 10K filing with the Securities and Exchange Commission.
There are more cases against the
Bentonville-based retailer than those disclosed in Wal-Mart's federal
filings. Companies are not required to disclose all legal proceedings,
just those that may result in "material" financial losses, or more than
10 percent of the current assets of the company.
Among the lawsuits facing Wal-Mart,
The Morning News examined five cases. The cases represent potentially
the largest judgments or potential financial impact, or the highest
number of plaintiffs.
Dukes v. Wal-Mart is a standout. It's
being called a landmark case in employment discrimination. The suit's
1.6 million plaintiffs, representing all of Wal-Mart's female employees,
makes it the largest sex-bias case in U.S. legal history.
"The company can not reasonably
estimate the possible loss or range of loss that may arise from these
lawsuits," Wal-Mart stated in its federal filing with the SEC.
There are, however, a few suits from
which the retailer might expect to take a blow.
Wal-Mart is facing a $198 million
lunch tab from Savaglio v. Wal-Mart, a class-action lawsuit in which
employees said they were not provided meal and rest breaks in accordance
with California state law.
A similar case in Pennsylvania
involved complaints of missed meal and rest breaks and other failures to
pay employees for all time worked. That case -- Braun/Hummel v. Wal-Mart
-- resulted in a judgment against Wal-Mart of nearly $188 million.
Wal-Mart has consistently denied
wrongdoing in these and other cases.
Both Savaglio and Braun/Hummel cases
are tied up in appeals, delaying the payout to 301,000 current and
former employees that make up the two lawsuits.
It also means the retailer hasn't yet
footed the combined $251 million bill.
But can any of these lawsuits
financially threaten a retailer that made $12.8 billion in net income in
its more recent fiscal year?
"It's not like they wouldn't be able
to pay the light bill if they had a billion dollar settlement," said
Patricia Edwards, fund manager with San Francisco-based Wentworth,
Hauser and Violic. "It wouldn't be good, don't get me wrong. But the low
point in cash last year at quarter end was just short of $5 billion."
Edwards said Wal-Mart reserves cash
for potential future lawsuit payouts so there would be a reduced impact
on shareholders in the event of such a case. With Wal-Mart's ability to
absorb some of the impact, a billion dollar payout may show up in
earnings as a loss of 5 cents per share, Edwards said.
There's also consolation, Edwards
said, that there doesn't seem to be a lot of new cases in the pipeline,
an indication that Wal-Mart may have changed its ways.
"If you're dealing with things that
happened three to five years ago and you've changed and are not doing
those things anymore, then you have to look at the company on a
go-forward basis rather than what's happened before," Edwards said.
But the ghosts of Wal-Mart have yet to
haunt the retailer.
The following are summaries and
updates of the largest cases facing Wal-Mart.
DUKES V. WAL-MART
Among all the cases facing Wal-Mart,
this one is the mother lode.
Dukes v. Wal-Mart represents a
whopping 1.6 million female employees and alleges Wal-Mart
systematically discriminated against women in promotions, pay, training
and job assignments.
"Wal-Mart has strong equal employment
opportunity policies, and fosters female leadership both among its
associates and in the larger business world," Daphne Moore, Wal-Mart
spokeswoman, said in an e-mail statement. "Wal-Mart has consistently
maintained that class certification is inappropriate because the alleged
experiences of the six women who brought this suit are not
representative of our female associates."
The case was brought on behalf of all
past and present female employees in the company's U.S. retail stores
and warehouse clubs since 1998. Six women, including two who still work
at Wal-Mart stores, originally filed the suit in 2001.
Wal-Mart in December lost its second
bid to have a federal appeals court in San Francisco reconsider a
lower-court decision to grant class-action status.
Wal-Mart is still fighting the court's
decision.
A three-judge panel of the federal
appeals court split 2-to-1 in the decision to uphold the class-action
status. The retailer on Jan. 8 filed a petition for "rehearing en banc,"
or, by the full 15-judge panel.
Both sides are waiting on the Ninth
Circuit to set a briefing schedule so they can respond to arguments.
After briefing, the court could still
take several months to resolve the panel and "en banc" reviews, said
Brad Seligman of Berkeley, Calif.-based The Impact Fund and lead
attorney for the eight firms representing the plaintiffs.
"At root, this is not a novel case,"
Seligman said. "It is a very straightforward case about whether Wal-Mart
is paying women less than men and not promoting them as often as they
should."
The plaintiffs seek, among other
things, injunctive relief, front pay, back pay, punitive damages, and
attorney's fees. And the final tally on that, should the plaintiffs win
their case, could amount to more than a billion dollars.
"Based on the analysis we presented to
the court in 2003, it didn't take any mental gymnastics to get to the
billion dollar range," Seligman said. "I'm sure it's more now."
HALE V. WAL-MART
A case that began in 2002 with five
former employees in Missouri has since swelled to more than 200,000.
The plaintiffs, who worked for the
company's stores and discount warehouses between 1996 and 2003, allege
systematic understaffing and overtime limits were enforced through the
retailer's corporate policies and a bonus incentive plan for managers
based on strict payroll and staffing controls. The understaffing caused
employees to miss breaks and work off the clock without compensation,
the plaintiffs allege.
The Missouri Court of Appeals last
June upheld the suits' class-action status, originally granted in 2005.
A trial has been set for April 6, 2009.
It will be a trial nine years in the
making since plaintiffs first filed the suit. But it's time that Steve
Long, lead trial attorney with Denver-based Shughart, Thomson & Kilroy
and one of the 12 attorneys representing the plaintiffs, said was
well-spent.
"I think the Missouri courts took a
long time to make sure they got it right and making sure this was a
proper class action," Long said. "Hopefully it will allow us to avoid a
lot of post-trial issues because so much has been decided already."
Long has gone up against Wal-Mart
before. Colorado-based attorneys Gerald Bader and Franklin Azar tapped
Long for help representing Wal-Mart workers in Colorado in a similar
off-the-clock lawsuit. That case reportedly settled for $50 million.
Long's career in business litigation
spans more than 30 years and 60 jury trials, but said facing off with
Wal-Mart is a daunting task.
"Wal-Mart is a formidable defendant,"
Long said. "They fight very hard for what they believe, and they fight
very hard to protect the way they practice their business in order to
preserve their profits. Since they make a lot of money, they can fight
very hard."
BRAUN/HUMMEL v. WAL-MART
The class-action lawsuit initially
filed by Michelle Braun in 2002 was soon followed by another lawsuit
filed by Dolores Hummel in 2004. The litigants proceeded separately
until the estimated 186,000 plaintiffs were consolidated for trial in
September 2006, according to court documents.
The plaintiffs alleged that they were
forced to miss rest breaks and work off the clock from March 1998
through May 2006.
A three-month, 32-day trial ended in a
jury siding with the plaintiffs, and found that Wal-Mart failed to pay
workers for all the work they performed and refused to allow workers to
take their paid mandatory rest breaks.
The jury awarded damages of $78.8
million.
A Pennsylvania judge later awarded
$62.3 million in damages, $10.2 million in interest and $36.5 million in
attorney's fees for the five firms representing the plaintiffs.
The final judgment was $187.6 million.
"The company believes it has
substantial factual and legal defenses to the claims at issue," Wal-Mart
said in its federal filing. The company filed a notice of appeal in
December.
SAVAGLIO V. WAL-MART
The largest verdict to date against
the retailer is Savaglio v. Wal-Mart, which also grabbed the No. 10 spot
on The National Law Journal's list of top verdicts from 2005.
The allegations in this case are like
the others -- they were not provided meal and rest breaks in accordance
with state law. In California, employees working more than 6 hours
receive a 30-minute meal break or an additional hour pay. Wal-Mart, the
workers allege, did neither.
The 2005 jury trial of the case
resulted in a verdict of $57 million in statutory penalties and $115
million in punitive damages. The judge later in 2006 awarded the
plaintiffs an additional $26 million in costs and attorney's fees.
Wal-Mart stated in its federal filing
that "the company believes it has substantial factual and legal defenses
to the claims at issue."
The retailer in January filed its
notice of appeal.
"We won and Wal-Mart has appealed
virtually everything under the sun," said Michael Christian, attorney
with Minneapolis-based Zelle, Hofmann, Voelbel & Gette LLP. "Nothing
happens during the pendancy of that appeal. The briefing will be
completed within the next months and at that point, the court will
likely set an oral argument for some point in the fall."
Christian is still working with the
case, but has since moved to Zelle Hofmann from San Francisco-based The
Furth Firm, which maintains control of the case.
BRAUN v. WAL-MART
A verdict is waiting in the wings for
a Minnesota class-action suit representing 56,000 Wal-Mart and Sam's
Club employees.
The trial began in January. Over the
next two and a half months of trial, attorneys for the plaintiffs argued
that Wal-Mart owes employees more than $50 million for unpaid work,
including 8 million missed meal and rest breaks, and falsified time
cards.
Wal-Mart attorneys have denied the
allegations.
"Wal-Mart did not force anybody to do
anything," company attorney Neal Manne said as the trial concluded April
1.
Plaintiffs claimed stores were
understaffed and managers were pressured to meet store performance
goals. They allege that store managers falsified timecards and asked
employees to work before clocking in and after clocking out.
Debbie Simpson, a former employee and
original plaintiff in the suit, testified she missed breaks because
there was too much work and no one was available to cover for her. She
eventually resigned from her position as a department manager.
"Wal-Mart is chronically understaffed
and we have a significant amount of evidence showing that -- not just
ours, but Wal-Mart's own records," said Justin Perl, who leads the case
for Minneapolis-based Maslon, Edleman, Borman & Brond LLP. "Wal-Mart is
now contending that its own time records are inaccurate."
The workers are seeking back pay to
1998 and as much as $1,000 per violation.
Judge Robert King Jr. said he would
issue a decision on liability, back pay and willfulness by July 1. A
jury trial would decide damages in a second trial to start Oct. 20,
should King rule in favor of Wal-Mart's employees.
BEYOND THE FIVE
Wal-Mart has argued in the cases that
circumstances are individual and not representative of worker's
conditions at its stores, and has vigorously challenged the class-action
certifications for every case.
"Wal-Mart is committed to treating its
associates fairly and in accordance with the law," Moore said in an
e-mail statement. "It is our policy to pay every associate for every
hour worked, and any manager who violates that policy is subject to
discipline, up to and including termination. The great majority of
courts across the nation have ruled that cases like this are not
properly suited for treatment as class actions because every
individual's circumstances are unique."
Wal-Mart additionally stated in its
March 31 federal filing with the SEC that class certification has yet to
be addressed in a majority of cases, but where it has, the company's
tally goes like this -- certification was denied in nine cases, granted
in 11 cases, conditionally granted in three cases, denied in nine cases
and in two cases, certification was granted, but the case was
subsequently dismissed.
[back to top]
Wal-Mart plans IT
back office in Bangalore
By Boby Kurian
& PP Thimmaya,
Economic Times
June 20th, 2008
[back to top]
BANGALORE: A new address may be added
to Bangalore’s already-crowded IT landscape. Wal-Mart, the world’s
biggest retailer, is mulling a captive IT/ITeS unit in India’s tech
capital, with the potential to create several hundred jobs, sources
said.
The $388-billion retail giant, based
in Bentonville in the US, has outsourcing ties with IT vendors like
Infosys and has done a recce for developing a captive shared service
centre to cater to multiple functions in its worldwide operations.
Besides IT development and maintenance, a shared service centre supports
different parts of a global enterprise such as HR, finance and
accounting.
Sources said Wal-Mart looked at a few
potential locations before more or less zeroing in on Bangalore. While a
definite call on the captive unit is still pending, Wal-Mart is believed
to have scouted for senior tech personnel to take the idea forward.
“Wal-Mart is expanding its IT
resources globally, including India, to support its growing
international business and operations in India. However, we have made no
further announcements to that growth. We currently have no plans for a
captive development centre in India,” a Wal-Mart spokesperson said.
Wal-Mart’s information systems division is centralised at Bentonville,
with a large pool of Indian techies on board. But going forward, the
retail behemoth may be looking at developing IT hubs globally to bolster
its round-the-clock support services.
In February this year, the retailer
said it was expanding IT staffing in India through outsourcing deals
with unidentified vendors. The press statement at the time mentioned
that Wal-Mart was expanding outsourcing even as it created several
hundred new jobs in Northwest Arkansas in the US. Some observers said
Wal-Mart may firm up plans only after the US presidential elections
later this year as the flight of jobs abroad continues to be a sensitive
issue in America. Interestingly, the development comes when there’s a
raging but inconclusive debate about the long-term viability of captive
IT units on concerns of escalating costs.
But several global retailers like
Tesco, Target and Supervalu have set up captive support centres in
Bangalore in the last 3-4 years. A source said Wal-Mart may kick off the
captive centre with a small operation and may even rope in a dedicated
third-party vendor to start with a small basket of offerings. But
Wal-Mart’s global peers have set up their own captives due to the fact
that no large Indian IT/ITeS player has the capability to provide
end-to-end services in the dynamic and complex world of retailing.
UK’s Tesco, the world’s third-largest
retailer behind Wal-Mart and Carrefour, set up a captive centre nearly
four years ago, and currently employs over 2,700 people. Tesco Hindustan
Service Centre caters to the entire IT life-cycle management of the
parent’s global retail operations, besides support businesses and
finance services like payroll and pension management as well as store
design support. In fact, the Hindustan Service Centre played a crucial
supportive role in Tesco’s recent high-profile foray into the US market
pitting it against Wal-Mart on the latter’s home turf.
At the same time, India’s outsourcing
majors have been deepening their retail vertical offerings, with Infosys
counting Wal-Mart and Tesco among its clients while TCS does work for
Home Depot. Most frontline IT companies have projected a substantial
ramp-up in their retail vertical, with the rapidly-expanding domestic
retail sector showing huge potential.
Wal-Mart has entered into a joint
venture with the Sunil Mittal-led Bharti Group for cash & carry
operations while Carrefour and Tesco are rumoured to be in advanced
discussions with local suitors for similar tie-ups.
[back to top]
SmartCare closes 15 Wal-Mart med clinics,
By Joyzelle Davis
Rocky Mountain News
June 20th, 2008
[back to top]
SmartCare Family Medical Centers on
Friday unexpectedly shut its 15 in-store health clinics located in
Wal-Mart stores throughout Colorado.
Wal-Mart had no prior notice, company
spokesman William Wertz said.
SmartCare's public relations agency
issued a statement confirming the closures and referred questions to the
company's Texas headquarters, which didn't return a call.
The in-store clinics treated common
medical problems like strep throat and ear infections for a $65 flat
fee. The clinics, staffed with nurse practitioners, were open from early
morning to late evening seven days a week for walk-in appointments.
Several other operators of in-store
health care clinics, including New York-based CheckUps, have closed
sites amid high operating costs. Last month, CVS/Caremark, the parent of
MinuteClinic, said it was curbing growth plans and might shutter some
locations.
Wal-Mart contracts with a number of
clinic operators nationwide and remains committed to the idea, Wertz
said.
It's too soon to tell what Wal-Mart
will do with the SmartCare clinic locations, he said, but the store
might consider a partnership with local medical centers or other
providers.
[back to top]
Companies deny breaking
pledges
By He Huifeng ,
South China Morning Post
June 19th, 2008
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