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Wal-Mart breaks the law

In June we noted here that NLRB has found Wal-Mart guilty of an array of legal violations — spying, harassment, intimidation, illegal firings — and Human Rights Watch concluded the company violates its employees “internationally recognized rights to freedom of association.”

The company’s disregard for wage-and-hour laws is well known — in December Wal-Mart agreed to pay up to $640 million to settle 73 lawsuits (including two filed in Illinois) charging wage-and-hour violations. Last year a Minnesota judge ruled the company had violated the state’s wage-and-hour law two million times and threatened $1,000 fines per violation (that’s $2 billion); the company agreed to settle for a bargain-rate $54 million.

That’s on top of a $50 million payout in a Colorado lawsuit in 2004; $172 million in California in 2005; $62 million in Pennsylvania in 2006; and $49 million in South Carolina this February.

It seems “Every Day Low Prices” means not just every-day low wages and a pathological opposition to unions, it means ignoring state laws mandating meal breaks, and forcing employees to work overtime without pay. The company is also the plaintiff in the largest gender discrimination lawsuit in U.S. history.

This disregard for law and decency is a central part of Wal-Mart’s ethos from its founding, according to this story from a new book on the company’s “Retail Revolution” reviewed by Harold Myerson in this month’s American Prospect:

“Around the time that the young Sam Walton opened his first stores, John Kennedy redeemed a presidential campaign promise by persuading Congress to extend the minimum wage to retail workers, who had until then not been covered by the law. Congress granted an exclusion, however, to small businesses with annual sales beneath $1 million — a figure that in 1965 it lowered to $250,000.

“Walton was furious. The mechanization of agriculture had finally reached the backwaters of the Ozark Plateau, where he was opening one store after another. The men and women who had formerly worked on small farms suddenly found themselves redundant, and he could scoop them up for a song, as little as 50 cents an hour. Now the goddamn federal government was telling him he had to pay his workers the $1.15 hourly minimum. Walton’s response was to divide up his stores into individual companies whose revenues didn’t exceed the $250,000 threshold. Eventually, though, a federal court ruled that this was simply a scheme to avoid paying the minimum wage, and he was ordered to pay his workers the accumulated sums he owed them, plus a double-time penalty thrown in for good measure.

“Wal-Mart cut the checks, but Walton also summoned the employees at a major cluster of his stores to a meeting. ‘I’ll fire anyone who cashes the check,’ he told them.”

More recently, according to Myerson, after Wal-Mart moved into Southern California, “decades of mutually profitable labor relations” with local supermarket chains were shattered by new demands that wages and benefits  be reduced to match the new competition.The proportion of Southern California grocery workers with health benefits dropped from 97 percent in 2003 to 54 percent in 2007.

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Category: development, jobs, labor, retail, Wal-Mart

Tagged: , , , , , , , ,

One Response

  1. […] that spirit, here’s a story from Walmart’s earliest days (related at length here a few years ago): At the time of Walmart’s founding in July 1962, President John Kennedy […]


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