Social Media Puts Wal-Mart on the Defensive

Social media appears to be playing a significant role in an epic battle between Wal-Mart Stores, the world’s largest retailer,  and an American union that presumably would like to represent Wal-Mart workers, The United Food and Commercial Workers .

The union has channeled worker dissatisfaction with  Wal-Mart’s  wages, benefits and working conditions into an innovative social media campaign  featuring web sites funded by the union called OURWalmart (Organization United for Respect at Walmart) and Making Change at Walmart.    These sites include a fundraising arm for “striking” Wal-Mart associates, news about alleged poor labor practices by Wal-Mart, and slick videos of associates complaining about their treatment by Wal-Mart. On Tuesday, OURWalmart referred associates to information allegedly leaked by OccupyWallStreet.org on secret Wal-Mart power points   that tell managers how to fend off unionization efforts.

OURWalmart has garnered national publicity for labor protests at Wal-Mart stores across the nation and appears to be making some gains, possibly because of Wal-Mart’s seeming overreaction to the protests of associates and the reality of Wal-Mart’s stingy  pay and benefits.

The National Labor Relations Board (NLRB) Office of the General Counsel recently issued a consolidated complaint  against Wal-Mart alleging that the company violated the rights of its employees as a result of activities surrounding employee protests in 14 states. The complaint involves more than 60 employees, 19 of whom were discharged allegedly as a result of their participation in activities protected by the National Labor Relations Act (NLRA).  The NLRA guarantees the right of private sector employees to act together to try to improve their wages and working conditions with or without a union.

Wal-Mart contends that most of the associates were fired “for violating Walmart’s attendance policies that apply to all associates. Some of these individuals violated the attendance policy dozens of times in the last six months. In other cases, they were absent from work for more than eight days without letting anyone know when they would be returning to work. The facts present a very different story from what OUR Walmart/UFCW asserts.”

Wal-Mart has responded to the UCFW campaign with its own web site called, OURWalmartFactcheck.com , which states its purpose is “to examine claims and provide facts about the Organization United for Respect at Walmart (OUR Walmart) – a group funded by the United Food and Commercial Workers International Union. This site is sponsored and operated by Wal-Mart Stores, Inc.”

Fact checker

Ironically, Walmart’s OURFactcheck.com  on Tuesday appeared to need a fact checker.

The web site incorrectly quotes a story in The Daily News Telegram of Worchester, Massachusetts, as reporting  that the average the average Walmart associate earns $12.83 per hour, and less than 1/2 of 1% of associates earnclaim_source minimum wage.  Walmart provides a link to the The Telegram story, which quotes Kory Lundberg, a Walmart spokesman, as stating:  “In Massachusetts … the average wage of a full-time hourly associate at Walmart is $13.86. He also noted that the majority of Walmart employees are full time. Mr. Lundberg said less than 1/2 of one percent of all Walmart associates earn minimum. Walmart’s pay is comparable to other retailers; it has to be to stay competitive, he said.”

There’s obviously a difference between the average pay of a Walmart associate and the average wage in Massachusetts of a full-time hourly Walmart associate.

NLRB Complaint

According to the NLRB,  the consolidated complaint against Wal-Mart actually was authorized in November of 2013, but withheld until last week while the Office of the General Counsel engaged in failed settlement discussions with Wal-Mart.  Additional charges are under investigation.

The NLRB states that Wal-Mart unlawfully threatened employees with reprisal if they engaged in strikes and protests during two national television news broadcasts and in statements to employees at Walmart stores in California and Texas. At stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington, the NLRB says that Wal-Mart unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests.  At stores in California, Florida, Missouri and Texas, the NLRB says Wal-Mart unlawfully threatened, surveilled, disciplined, and/or terminated employees in anticipation of or in response to employees’ other protected concerted activities.

Note: OurWalmart includes a “legal disclaimer” stating that the UCFW is not trying to organize Wal-Mart workers but merely to “help Wal-Mart employees as individuals or groups” in their dealings with Wal-Mart.

As Walmart Goes, so Goes the Nation

Impact of unemployment, stagnant wages

Yesterday, there was no Provolone cheese in the dairy section at my local Wal-Mart. In fact, many of the sections where sliced cheese is normally present in abundance were completely bare.

So I ate my ham sandwich sans cheese.

I thought of this today when I read news reports indicating this is proving to be a bad year for Walmart, the world’s leading retailer.

Bloomberg this week reported the contents of a Sept. 17 internal e-mail between a Walmart ordering manager and a supplier that stated inventory at Walmart stores has outpaced sales growth, and that the retailer missed out on some sales because it didn’t have enough employees to keep shelves stocked.

Wal-Mart’s workforce has fallen by 120,000 since 2008, despite adding several hundred locations. The company’s same-store sales have dropped for two straight quarters.

All of which raises some questions in my mind.

What happens when a company doesn’t hire a sufficient number of employees, treats them poorly and pays them so little that turnover is astronomical?  Hmm … The shelves aren’t stocked even though the product sits behind a door in the store’s inventory. Shoppers don’t make purchases they would otherwise make.  The store loses money.

(This week Wal-Mart said it was adding 35,000 permanent workers and increasing the hours of an additional 35,000, as well as hiring 55,000 seasonal workers.)

And what happens when our society is upside down – when most of our nation’s profits bypass the middle class and go directly to the richest people in the country.  Hmmm … If the middle class doesn’t have the money to buy Walmart’s products, who will? How much Provolone cheese can Bill Gates, Warren Buffet, the Koch brothers and the Walton family eat? (Yes, the Walton family is on Forbes list of the richest people in America.)

Wal-Mart told CNBC that Bloomberg’s story was “misleading” and Wal-Mart spokesman David Tovar told CNBC that the company has hundreds of inventory categories that are being constantly managed based on consumer demand.

Still, Walmart shares fell 1.5 percent last week.

Some of Walmart’s plight is believed to reflect a more general malaise in the retail sector.  Back-to-school sales were disappointing and some analysts forecast that the Christmas spending season will be the weakest since 2009.

The Christian Science Monitor interviewed Howard Davidowitz, a retail consultant based in New York, who notes that Walmart represents about 11 percent of total U.S. retail sales.

“If you look at this economy, it’s a train wreck for [the bottom] 80 percent of the American people, and Walmart sells to that 80 percent,” said Davidowitz. And “77 percent of the new jobs created this year were part-time jobs. We have the lowest full-time labor participation rate in 35 years. Consumers’ incomes are not growing. One of six Americans are in poverty, and another one in six are an inch away from poverty.”

Walmart’s problems may seem trivial today, when our government is literally closed for business. However, one suspects the two matters are related

 

Walmart Dodges Bullet on Sex Discrimination

Scale of JusticeWal-Mart may have dodged the bullet for alleged systemic sex discrimination dating back at least a decade.

Last week a federal judge in San Francisco denied class certification in a statewide class action lawsuit filed by five female Wal-Mart employees in California on behalf of 150,000 past and present female workers in that state who  allegedly were denied equal treatment in pay and promotions.

This is the second defeat for plaintiffs seeking to file class action lawsuits against Wal-Mart on a state or regional basis. Wal-Mart won dismissal of a lawsuit in October that sought to represent female Wal-Mart workers in Texas.

 The U.S. Supreme Court last year rejected a 12-year-old class action lawsuit filed by six female employees of Wal-Mart on behalf of  1.6 million past and present female workers around the country. 

What’s left for the plaintiffs?

Class action lawsuits often are the only realistic way of addressing systematic discrimination by corporations because of  the high cost of litigation, the defendant’s “deep pockets,”  and the relatively paltry amount of damages typically available in individual cases.

Underwhelmed

Senior U.S. District Judge Charles R. Breyer ruled the California lawsuit failed to meet the  U.S. Supreme Court’s criteria for a collective legal action, including evidence of a company policy or decisions by higher-ups that affect all workers in the class. He the statistics “still do not reflect significant proof of a general policy of discrimination.”

Judge Breyer concluded the following evidence from the plaintiff’s is “underwhelming”:

  • About three-quarters of the stores paid women, on average, the same hourly rates as men. (Note: of course, this means that a quarter of Wal-Mart stores pay women, on average, a lower hourly rate than men. PGB)
  • Eighty-six female Wal-Mart employees in California described personal experiences of discrimination  – that represents only one woman for every 1,745 members of the proposed statewide class. (It’s unclear what number would be sufficient  for class action status- PGB)
  • The plaintiff’s produced evidence that Wal-Mart’s then-chief executive, Thomas Coughlin, in a 2004 meeting attended by district managers who approve pay and promotional decisions, said the key to success in choosing leaders was “a single focus to get the job done,” and that “men are better at focus.”
  • The plaintiffs said they had evidence of disparities throughout California and biased statements by top managers.

The U.S. Supreme Court ruled unanimously in June 2011 that the original lawsuit against Wal-Mart in 2001 failed to show any company-wide policy or attitude of discrimination  and said there were too many women in too many jobs at Wal-Mart to wrap into one lawsuit. The high court overturned lower court decisions that allowed nationwide class-action status.

Judge Breyer said the California lawsuit “is essentially a scaled-down version of the (nationwide) case with new labels on old arguments.” He said the plaintiffs challenged “the discretionary decisions of hundreds of decision-makers,” which, according to the U.S. Supreme Court, cannot be the basis of a class-action suit.  

Breyer said the remarks attributed to former Wal-Mart CEO Coughlin may have come from an outside consultant and were made after the period covered by the lawsuit.

Breyer, 72, was appointed to the federal bench in 1997 by then-President Bill Clinton.  His brother is U.S. Supreme Court  Justice Stephen Breyer.

Dodged a Bullet?

At one point, Wal-Mart, the nation’s leading retailer, was concerned about potentially serious liability for alleged sex discrimination.

In  2010, the New York Times published an article on a 1995 memorandum issued by Wal-Mart’s then counsel, Akin Gump Strauss Hauer & Feld,  that reported widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores.

The NYT reported the memo said that “women employed by Wal-Mart earned less than men in numerous job categories, with men in salaried jobs earning 19 percent more than women..”

By one measure, the memo states “. . . men were five and a half times as likely as women to be promoted into salaried, management positions.” Furthermore, in 1993, men employed by Wal-Mart as department managers were paid an hourly rate 5.8 percent higher than women in those positions. 

The Memo estimated that Wal-Mart’s potential legal exposure in a class-action sex discrimination suit was $185 million to $740 million for 1993 alone.

The  overall disparities in job assignments, the memo states, were “statistically significant and sufficient to warrant a finding of discrimination unless the company can demonstrate at trial that the statistical disparities are caused by legitimate, nondiscriminatory factors.”

At this point it appears that Wal-Mart has dodged that bullet.

Wal-Mart was “pleased” by California Judge Breyer’s ruling and said it has a had a  “strong policy” against discrimination in place for many years.

Taxpayers’ Xmas Present to Walmart?

WalmartWho pays when an employer does not offer health care or pension benefits to its employees, opting instead to pocket its profits?

Taxpayers.

 The Huffington Post has obtained a copy of Walmart’s health care policy, which shows that the, the nation’s largest private employer will begin to deny insurance to new employees who work fewer than 30 hours a week. The company can also choose to eliminate health coverage for current workers whose hours dip below the 30 hour threshold.

“This is another example of a tremendous government subsidy to Walmart via its workers,” says Nelson Lichtenstein, the director of the Center for the Study of Work, Labor and Democracy at UC Santa Barbara.

 In anticipation of the Affordable Care Act, experts say that Walmart  is effectively shifting the costs of paying for its employees onto the federal government.  The Act extends Medicaid to low- income citizens and many if not most Walmart employees working fewer than 30 hours per week would drop below the poverty limits for inclusion in the expanded program. Merry Xmas Walmart!

Meanwhile, Walmart Stores reported a 9% increase in third-quarter net income last month as the world’s largest retailer continues to bring back shoppers by emphasizing it has the lowest prices.

 The Associated Press reports that revenue for Walmart’s U.S. business, which accounts for about 60% of the company’s total business, rose 3.6% to $66.1 billion, while revenue at Wal-Mart’s Sam’s Club rose 4.7% to $13.9 billion. Revenue at its international division, which accounts for about a quarter of Walmart’s total revenue, rose 4.7%.

 Wal-Mart accounts for nearly 10% of nonautomotive retail spending in the U.S.

Walmart has reportedly instructed its public relations staff to stop communicating or responding to inquiries from The Huffington Post.