DAILY MEMO: LABOR:

Wal-Mart sensing a new political day?

Settlement of Nevada wage-and-hour lawsuits may be a nod to a more labor-friendly administration

Wednesday, Dec. 31, 2008 | 2 a.m.

Employees forced to work off the clock. Workers locked in overnight. Illegal immigrants on the payroll. Union sympathizers banished or fired. Sweatshop and child labor.

When it comes to Wal-Mart, the stories are legion — and, from the perspective of the world’s largest retailer, unfair. The company’s outgoing chief executive, Lee Scott, has often blamed documented abuses on a bunch of “knuckleheads,” managers acting illegally without the knowledge of corporate headquarters. And over the years, Wal-Mart has fought these cases aggressively — in court and in print.

So it came as somewhat of a surprise last week when, two days before Christmas, the company settled 63 wage-and-hour lawsuits, many originating in Las Vegas and filed in Nevada, accusing it of systematically cheating employees out of hours they had worked. Wal-Mart operates 49 stores in Nevada.

Specifically, the class-action complaint alleged store managers engaged in a practice known as “time shaving,” clocking employees out one minute after their meal breaks ended — even though they worked for several hours afterward — and erasing overtime from their time cards.

The settlement, which involves hundreds of thousands of current and former employees, could cost the company as much as $640 million. How much money will flow to the company’s nearly 15,300 workers in Nevada is unclear.

The resolution seems to have as much to do with turning an embarrassing page (Scott is relinquishing the role of chief executive to Michael T. Duke) as it does with the country’s new labor-friendly political landscape.

Consider the environment: Sen. Barack Obama took Wal-Mart to task during the presidential campaign for its low wages and scant benefits and was elected in November with considerable organizing help from unions. His pick for labor secretary, Democrat Rep. Hilda Solis of California, has vowed to strengthen unions and enforce garden-variety labor law, such as the wage-and-hour rules at the heart of the Wal-Mart class-action suit. And, if Democrats stick together, Congress is just a few votes shy of passing a law that would make it easier for unions to organize.

“I’d be most interested to know when the (lawsuit) negotiations really got serious — before or after Nov. 4,” said Nelson Lichtenstein, a labor relations expert at the University of California, Santa Barbara, who’s writing a history of Wal-Mart. “I think they’re reading the tea leaves, and they know there’s a new era of labor law enforcement coming.”

Under the Obama administration, business leaders fear what Randel Johnson, vice president of labor policy at the U.S. Chamber of Commerce, has called a “shift from compliance assistance to pure enforcement.” Indeed, Lichtenstein said a lax regulatory environment and a business-friendly federal labor board have all but encouraged Wal-Mart and other companies to break the law, particularly during the past eight years.

A corporate statement announcing last week’s settlement seemed to strike a conciliatory note. “Resolving this litigation is in the best interest of our company, our shareholders and our associates,” said Tom Mars, Wal-Mart’s executive vice president and general counsel. “Many of these lawsuits were filed years ago and the allegations are not representative of the company we are today.”

Wal-Mart also recently reached a

$54 million settlement covering 100,000 former and current employees in Minnesota who had asserted they were owed money for off-the-clock work and missed breaks. Still, the company has appealed a number of cases alleging similar wrongs, and is still fighting a sex-discrimination lawsuit that has become the largest private civil rights case in U.S. history.

Another possible reason for last week’s settlement: There are indications all the bad press has affected Wal-Mart’s bottom line. A company-commissioned study found that between 2 percent and 8 percent of consumers have stopped shopping at Wal-Mart because of the negative stories.

Discussion: 15 comments so far…

By depositbox

12/31/08 at 4:26 a.m.

Comment removed by staff.
By depositbox

12/31/08 at 4:29 a.m.

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Also, of coarse Wal-Mart is going to settle a lawsuit every now and then. Cheaper to settle than forge on. Wal-Mart gets sued every 20 minutes by someone wanting an easy buck. So it makes sense that occasionally they will offer a settlement
By redferret

12/31/08 at 7:51 a.m.

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Excuse me, but it sounds like a lot of these people just want their buck. You know, the buck they worked for off the clock without their knowledge. Wal-mart is scum. Worse is their atrocious environmental record.
By homer

12/31/08 at 8:52 a.m.

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Wal Mart has had it's way with cheating and taking advantage of employees for years now, thanks to Bush. This is a great day for the American worker regardless of their position. This has nothing to do with unions but enforcement of existing labors laws.A Wal Mart executive once said "we don't care about a million dollar law suit we make that in seconds".
Now 640 million and 54 million may be an accumulation of seconds but it did get Scott relieved of his duties.

depositbox, Unfortunately there are 'things' like you in our society and we all suffer you, I will bet you don't work and suck the system dry, unlike the decent people who are victimized by the Wal Marts of the world.

I still refuse to shop at Wal Mart and try not to drive by a Wal Mart.
By homer

12/31/08 at 8:58 a.m.

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depositbox Only a fool who is ignorant of the facts would make such a statement. Or someone who is impaired and lacks a conscious.
By Johnathan_Abbinett

12/31/08 at 1:17 p.m.

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This is why no one with a conscious should ever shop at Walmart - besides you only save a few cents over Target! Walmart is one of the worst examples of a CORPORATE PREDATOR!
By paplikaplik

12/31/08 at 5:05 p.m.

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"The settlement, which involves hundreds of thousands of current and former employees, could cost the company as much as $640 million. How much money will flow to the company's nearly 15,300 workers in Nevada is unclear."

If it's like most other class action lawsuits, then the lawyers will get most of the settlement and the employees will get $1.50 and a coupon.
By getalife

12/31/08 at 10:34 p.m.

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Target? Target!, you mean the French owned company. When you say corporate predator; why do you say it with a french accent?

I was in WalMart today and picked up three movies at a great price..... (I am checking for french sub-titles as I type this).... When the new WalMart in my neck of the woods was getting ready to open the line was out the door with people (am I supposed to insert: idiots/morons/lackeys/dim-wits) looking for a job.

Shop at the other stores all you want, give your money to whomever you see fit, but think about this.

The people that work at WalMart need those jobs and are grateful for them.

The only people that don't work off the clock are union idiots who don't work on the clock either.
By getalife

12/31/08 at 11:26 p.m.

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Homer, when you drive into your trailer park don't you drive right by a WalMart?

Unions suck the life out of people, they make them into lazy do-nothings.

Thanks for blaming Bush, it goes to the heart of your comments.

Sleep well for your savior is coming, on Jan 20 all will be well with the world. What will you do with yourself when your small mind cannot bitch about anything anymore.

Speaking of impaired have you been hitting the holiday egg-nog a little hard today or are you always this verbose?
By azsk8fan

1/1/09 at 10:17 a.m.

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Walmart is EVIL and they need to be wiped off the planet - filthy stores, nasty low class customers - I was a vendor in many walmart stores and they were all consistently dirty and filled with the trailer trash of the world. They force vendors to practically GIVE them the product for nothing and in the case of my product it was a 'pay on scan' so they only paid for what they sold - the shrink, theft/damage was at MY expense and they did absolutely nothing to help ensure my losses would be kept to a minimum. When you have a shelf full of sports trading cards, which are easily stolen you don't pull up a 5ft high wall of coke products in front of them, thus blocking everyone's view - you don't do that, unless of course you're walmart - then you do it because you could care less about what gets stolen since you're only paying the vendor for what you sell. Walmart is the scourge of the earth.
By buzzbomb

1/1/09 at 11:32 a.m.

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Walmart is so successful because they fulfil a need in our society and do so very well. Organized labor is angry because they aren't getting a cut.

Why would anyone want unions to do for retail what they have done for the big 3 and other US manufacturing?

My small hometown is better of because it has a Walmart. People of average means have more buying power. The people who work there are happy with their jobs. Nearby businesses have benefited from the traffic draw. Some poorly run competitors failed - again the consumer is better off.

As for ask8fan - if Walmart closes those nasty low class customers will be shopping alongside you at those over-priced, poor-service dep't. stores. Also were you forced to be a Walmart vendor? I'm guessing you or your employer asked Walmart to stock your product.
By jfnance32

1/1/09 at 6:01 p.m.

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Walmart is evil.

We need to shut them down and fire all those employees who have been tricked into working for them especially when there are tons of high paying unions jobs at the unionize version of Walmart down the street.

Also, all those evil poor to low income people that shop at Walmart will have to learn to do with less. It is so shameful that do not shop at the expensive imaginary unionize version of Walmart down the street.

Down with Walmart. We need higher unemployment and higher prices for the poor/low income people.