Wal-Mart’s Labor Problem

By Aaron Ludensky, CampusProgress, September 15, 2008

The company has a history of (not) dealing with workers’ rights and shirking on employee benefits.

There are a lot of reasons to dislike Wal-Mart. From running small-town businesses into the ground to its notorious environmental «green washing,» Wal-Mart has a reputation for being the big corporation everyone loves to hate.

But the company’s most egregious problems are with labor. Accusations against the company range from workers being denied overtime to union busting. The company’s corporate management insists that these accusations are unfounded and that this rhetoric is slander meant to bring down the company. But Wal-Mart continues to pay out millions of dollars in settlements from lawsuits brought against the company. In the last two years, the National Labor Relations Board (NLRB) ruled against Wal-Mart six times for activities related to union-busting.

Since it was founded in 1962, Wal-Mart has opened 3,800 stores in the United States and an additional 2,800 worldwide. The company employs approximately 2.1 million people worldwide and 1.4 million domestically, making it the largest private employer in the United States. Roughly 100 million people shop at the retail giant every week.

Campus Progress has rounded up a list of the company’s worst alleged labor practices. You can decide for yourself whether Wal-Mart deserves its bad rap.

Income Discrepancy

CEO Lee Scott’s total compensation: $29.8 million in 2003.

Average employee’s income: $8.23/hour, total annual full-time salary $13,861. Most work about 24 hours a week, making an average annual income closer to $10, 271. In 2003, the poverty line was $14,630 for a family of three. During this same fiscal period, each Wal-Mart store was worth an average of $204 billion. In 2005, the net worth of the family members who own the corporation was approximately $100 billion combined.

Violation of Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) of 1938 guarantees workers rights like overtime pay, equal wages regardless of gender or race, and a minimum wage. Also called the Wages and Hours Bill, it has been amended several times and is still the predominant tool used to protect workers’ rights.

Perhaps one of the more egregious offenses is the company’s refusal to appropriately compensate its employees for overtime work. In 2002, Wal-Mart was found guilty in a lawsuit that charged that «managers got employees to work off the clock by asking them to clean up the store after they had clocked out and by deleting hours from time records.» Even if employees aren’t forced to stay after their shift ends, they often feel compelled to do so since they may be assigned tasks that require more time than their shift allows. Wal-Mart has faced over 50 lawsuits in state and federal courts. The company paid $50 million in 2000 to settle an «off-the-clock lawsuit» involving 69,000 workers in Colorado, and another for $500,000 covering 120 workers in New Mexico. In 2007, Wal-Mart paid more than $33 million in back wages plus interest for violating overtime rules.

Wal-Mart also has denied workers their federally mandated breaks. According the United Food and Commercial Workers (UFCW), «a[n] internal audit of 128 Wal-Mart stores found 127 were ‘not in compliance’ with company policies concerning workers not taking breaks. The audit found workers nationwide didn’t take breaks 76,472 times in a one-week period.» Today, the company is facing 80 more lawsuits at various stages regarding wage and hour violations.

The Family Medical Leave Act Violations

In 2005, the California Fair Employment and Housing Commission fined Wal-Mart $188,000 when the company refused to reinstate a woman after her maternity leave was up. According to Wal-Mart Watch, this is one of many violations of the Family and Medical Leave Act filed against the company.

Union Busting

A Wal-Mart store manager who hears rumors of unionizing is required by corporate policy to report the activity to the Bentonville, Ark. headquarters. The store manager is then essentially relinquished of his responsibilities, and all further decisions about labor policy at the store go through upper-tier management at the headquarters.

Each new employee is shown videotapes explaining the corporation’s «open door» policy where complaints can be directed to others above one’s immediate superior. It is said to serve as an alternative to unionizing. However, many employees have insisted that this is anti-union propaganda that amounts to intimidation. It has become a running not-so-funny joke among many employees that the «open-door» policy is more like the «open-your-mouth-and-they’ll-show-you-the-door» policy. In 2005, Wal-Mart decided to shut down its Jonquiere, Quebec, store just six months after its workers had unionized. This put over 200 employees out of work without severance.

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