Organic Consumers Association


Previous Page

Click here to print this page

Make a Donation!


Wal-Mart Under Fire

June 23, 2004, Issue #355
Monitoring Corporate Agribusiness
>From a Public Interest Perspective

TO RECEIVE: Send name and address


ANN ZIMMERMAN, WALL STREET JOURNAL: A federal judge in San Francisco ruled that a gender-discrimination lawsuit against Wal-Mart Stores Inc. could move
forward as a class action, allowing the lawsuit to apply to as many as 1.6
million current and former female employees who worked for the company since
December 26, 1998.

The move makes the case the largest civil-rights action ever brought against
a private employer in the U.S.

The original suit, filed in June 2001 by six former and current female
employees, charged that the Bentonville, Arkansas, retailer systematically
denies women workers equal pay and opportunities for promotion. Wal-Mart,
America's biggest private employer, with 1.3 million employees, said it
plans to appeal the decision.

Federal Judge Martin J. Jenkins rejected the retailer's argument that the
enormous class size made the case too unwieldy. In addition, Wal-Mart had
argued that most hiring and promotion decisions were made at the store
level, and thus, there wasn't any pattern of corporate discrimination.

The judge, however, found the plaintiffs had enough evidence that the
company had common pay and hiring practices across the country, raising the
"inference that Wal-Mart engages in discriminatory practices in compensation
and promotion that affect all plaintiffs in a common manner." The decision
affects who can participate in the case, but isn't an indicator of the

Judge Jenkins also ruled that the class can pursue an award of punitive
damages in addition to back pay for wage differences and lost earnings to
those who were actually denied promotions.

Joseph M. Sellers, co-counsel for the plaintiffs and a lawyer with the
Washington, D.C., firm of Cohen, Milstein, Hausfeld & Toll, called the
ruling "a terrific recognition of the plight of women at Wal-Mart." "It is
an unprecedented opportunity to pursue their claims together," he said.

Wal-Mart, however, noted that the certification is just a first step and the
case has a long way to go. "Let's keep in mind that today's ruling has
absolutely nothing to do with the merits of the case," said Wal-Mart
spokeswoman Mona Williams. "Judge Jenkins is simply saying he thinks it
meets the legal requirements necessary to move forward as a class action. We
strongly disagree with his decision and will appeal."

Wal-Mart has ten days to ask the U.S. Ninth Circuit Court of Appeals to
review the case. If the review is denied, lawyers for plaintiffs say they
hope to get a trial set within the year.

However, most cases of this size and complexity are settled out of court ---
and for huge sums. Home Depot Inc., for example, agreed to pay $104 million
in 1997 to settle a class action on behalf of 25,000 women who claimed they
were denied promotions because they were female. Coca-Cola Co. in 2000 and
Texaco Inc., now a part of ChevronTexaco Corp., in 1996 each paid well more
than $100 million to settle race-discrimination cases.

Wal-Mart, which racked up $9.05 billion in profit on $256.33 billion in
sales in the year ended January 31, has the financial wherewithal to deal
with a potentially large jury verdict or settlement, observers says. More
troubling are Wal-Mart's persistent image problems. The world's largest
retailer is facing a host of labor-related problems and has become a target
of unions and activists, who portray it as a penny-pinching corporate giant
that puts profits ahead of workers.

More than 30 lawsuits filed against Wal-Mart allege it failed to pay workers
overtime, and a federal grand jury is investigating whether the company
knowingly used contractors who hired illegal immigrants to clean its stores.

The company recently has taken steps to change its employment practices,
creating a director of diversity and a compliance team. In January, it
instituted its first company-wide electronic system to allow employees to
apply for management training. It also has restructured pay scales. At the
company's annual meeting in early June, Chief Executive Lee Scott also
announced that executives will forfeit a percentage of their bonuses if they
fail to meet specific employment diversity goals.

Still, Wal-Mart fiercely denied that it has engaged in a pattern of
discrimination against women. In a two-hour class-certification hearing last
September, Wal-Mart argued that each member's case is unique and that it is
entitled to individual hearings regarding each class member's claims. The
company said this process would entail at least 13 years of testimony and it
argued that such testimony was the only way it could receive "due process."

Wal-Mart also argued that most of its employment decisions are made on the
store level and don't amount to any pattern of corporate discrimination that
would merit class-action status for the lawsuit.

The plaintiffs in the case claim sheer numbers prove their point: About
two-thirds of Wal-Mart's hourly employees are women, though they make up
only a little more than a third of all its salaried managers. Just 14% of
the top managers at its 3,000 stores are female. The plaintiffs, women from
several states who mostly held hourly jobs, also contend that women earn
five percent to 15% less than their male counterparts in the same jobs,
differences that can't be explained by seniority or performance reviews. The
plaintiffs' statistical studies also show that the average proportion of
women in managerial positions at the country's 20 largest retailers is some
20 percentage points higher than at Wal-Mart, according to data filed with
the U.S. Department of Labor.

Although Wal-Mart has provided its own statistics that attempt to show that
women are paid fairly and they don't apply for promotions as readily as
males do, the judge was unconvinced, noting that the plaintiffs' statistical
presentation was "largely uncontested."

Judge Jenkins also rejected Wal-Mart's argument that the case is too large
to try, noting that this year is the 50th anniversary of the Brown v. Board
of Education case, "which serves as a reminder of the importance of the
courts in addressing the denial of equal treatment under the law wherever
and by whomever it occurs."

The plaintiffs are represented by three public-interest groups: The Impact
Fund of Berkeley, California; Equal Rights Advocates of San Francisco; and
the Public Justice Center of Baltimore. Four law firms also are involved in
their case: Cohen Milstein; Davis, Cowell & Bowe of San Francisco; Tinkler &
Firth, of Santa Fe, New Mexico; and Merit Bennett also of Santa Fe.


ASSOCIATED PRESS: Independent presidential candidate Ralph Nader chose
Wal-Mart Stores home state [June 18] to demonize the world's largest
retailer as a symbol of much of what he says is wrong in the nation.

During a brief appearance at a downtown Little Rock hotel attended by about
15 supporters and about as many members of the media, Nader put Wal-Mart's
price-slashing logo at the fore of the corporate influence he has long
complained is drowning out the people' voice in government.

Nader switched gears while talking about Arkansas' high poverty rate and
condemned Bentonville-based Wal-Mart for its internal policies and the
low-price demands it makes of suppliers.

"After all, this is where Wal-Mart started. Wal-Mart does not pay a living
wage," he said. "More and more, the most powerful message coming from the
Wal-Mart conglomerate is, 'meet the Chinese price of serf labor."'

Nader also criticized Springdale-based Tyson Foods, the world's largest meat
company, for labor practices including hiring illegal immigrants as

Wal-Mart is hypocritical for paying large corporate salaries and paltry
worker wages, said Nader, who called it a "pauperizing" corporation. He said
just as trade agreements like NAFTA are a foreign drag on the U.S. economy,
Wal-Mart is a domestic burden.

"It's hollowing out communities. It's throwing its weight around," he said.
"It is the exact opposite of how our country has progressed."

Wal-Mart spokeswoman Sarah Clark said Nader's comments are "totally wrong
and do not reflect the facts about our company.

"It is a shame that a presidential candidate would be so negative and share
so many untruths about a company that provides good jobs to more than 1.3
million people in the U.S. and is working hard to improve the standard of
living for Americans."

Nader stopped in Little Rock as part of a four-city southern tour that began
Thursday in Jackson, Mississippi He also plans to visit Birmingham, Alabama,
and Memphis.

As a Green Party candidate in 2000, Nader finished third in Arkansas with
13,275 votes, or two percent. U.S. President George W. Bush won the state's
six electoral votes with 51% and Democratic nominee Al Gore received 45%.

A campaign spokesman said Nader is confident he will qualify for the ballot
in Arkansas this November, when many Democrats fear he will cost presumed
nominee John Kerry votes. Nader needs 1,000 signatures of Arkansas voters by
August 2 to make the ballot, and the campaign wants to collect 1,300
signatures by then.

Nader has withdrawn from the Green Party nomination process but has picked
up the endorsement of the Reform Party, which ran Pat Buchanan for president
in 2000.

During Friday's visit, Nader touched on a broad variety of topics and
directed supporters to a web site,
for details. His speech included criticism of Bush, the war on Iraq and how
the U.S. should extricate itself from that situation.

Early in his remarks, Nader stuck to more generic complaints about the
influence of large corporations in Washington, saying they form a virtual
corporate government.

"They've managed to put 'For Sale' signs on many offices in the government
and the executive branch. Our government should not be for sale," he said.

Nader called Bush "a giant corporation disguised as a human being" and a
"pause and run" photo opportunist who has mismanaged a war he described as

To get out of Iraq, Nader said, he would withdraw U.S. troops and
corporations by the end of the year, call for immediate, internationally
supervised elections, continue humanitarian aid and install international
peacekeepers. He said one of Kerry's largest shortcomings is lack of a
clearly defined Iraqi exit strategy.

Nader was denounced by some as a spoiler for Bush in 2000, taking away
liberal votes in the deciding state of Florida that cost Gore the White
House. Nader said he doesn't see himself as a spoiler for either candidate.

Many moderate liberals who supported Bush four years ago have been angered
by domestic and foreign policy decisions the president has made and are
returning to the Democratic fold, Nader said, and that backlash has stripped
much of his own liberal support.

Nader said he intends to run a grass-roots campaign and will push to be
included in presidential debates. He said he is intent on breaking through a
system that includes two parties he described as having more in common with
each other than differences.

"We have to get over this idea that this is a two-party system that carves
this country up into districts that are dominated by one party," he said.

His campaign will rely heavily on volunteers in each state spreading the

"We don't believe in a celluloid campaign, especially since we can't afford
it," Nader said.