The world of the Beast of Bentonville is all abuzz with news of various kinds–not the kind of news that is fuzzy and warm to living creatures everywhere (a friend of mine says I should write more positive things…okay, I’ll try…he obviously didn’t read my recent baseball riff). So, where do we start? How about with the news that Wal-Mart managers knew something was wrong when it came to illegal working conditions:
Wal-Mart managers were told in 2000 that employees were not taking breaks required under company policy and state laws, but ignored the findings of the company’s own internal audit, court documents show.
Stores were not in compliance with company and state regulations concerning the allotment of breaks and meals," said the report, referred to as the Shipley Audit. A judge said Wal-Mart’s management, instead of responding to the audit’s findings, "put their heads in the sand."
Wal-Mart Stores Inc. now faces more than 70 lawsuits across the country accusing the Bentonville retailer of failing to award rest or meal breaks to its employees or forcing employees to work off the clock without pay.
No, it’s hard to believe that the top dogs at Wal-Mart didn’t know this was going on. And it will end up costing he company:
In a class-action case in Minnesota, District Court Judge Robert King Jr., in a 151-page order released June 30, found that Wal-Mart breached its contract and violated state labor laws by not giving its employees breaks. He awarded the class of about 56,000 workers $6.5 million.
The next phase of that trial is scheduled to start Oct. 20. Wal-Mart faces a penalty of up to $1,000 on each of the 2 million state labor violations. Under Minnesota law, money assessed for the labor violation penalties goes to the state, not the class members. But punitive damages, or those imposed to punish the wrongdoer, will be decided during the trial and will go to the class if awarded.
"I don’t know if it’s going to be $2 billion," said Bill Sieben, a Minneapolis attorney who represented the employees in the Minnesota case. But, he said, even if the jury fines Wal-Mart only $100 per violation, "then it’s a $200 million exposure. They’ve got a very serious risk of a huge verdict against them."
Personally, I think the company should make CEO Lee Scott pay for the financial hit, either by docking his multi-million pay package, or, better yet, making him work for ten years at one of the company’s subcontractors in China…speaking of which…
Turns out that when a national government has a policy to force companies to let unions in, Wal-Mart plays the game, as Business Week reports:
Wal-Mart Stores (WMT) may stiff-arm unions in the U.S., but not in China. The giant retailer has just signed a new collective bargaining deal with the All China Federation of Trade Unions, the government-controlled union representing Wal-Mart’s Chinese workers. Under the agreement, which for now only covers two Chinese cities (Quanzhou in the southeastern province of Fujian and Shenyang in China’s northeast), Wal-Mart employees will get 8% pay raises this year and next.
The deal is a victory for the government, which successfully forced Wal-Mart to unionize its 48,000 local employees in 2006. It’s also a sign that employers in China, both local and foreign, are starting to take labor, safety and environmental issues more seriously.
Now, this isn’t the union you and I might think we want:
Chinese workers of course still have few rights: They can’t form independent unions, for instance, and they criticize the government’s labor policies at their peril.
But, it does show what happens when national policy–albeit, in a less than open society–requires that companies sit down and negotiate with unions. Wouldn’t it be nice if that was true in the U.S., too?
