Wednesday, December 24, 2008

Christmas not so Merry for Walmart!

Wal-Mart said on Tuesday that it would pay at least $352 million, and possibly far more, to settle lawsuits across the country claiming that it forced employees to work off the clock. Several lawyers described it as the largest settlement ever for lawsuits over wage violations.
After years of being embarrassed by lawsuits over its wage practices, the company agreed to settle 63 cases pending in federal and state courts in 42 states. The workers and their lawyers will receive at least $352 million, and the payments could reach $640 million, depending on how many claims affected workers submit.
Union critics of Wal-Mart, the world’s largest retailer, saw the settlement as proof of their view that the company achieves its low prices in part by cheating workers. But the company rejected that characterization, saying it had already corrected wage practices that it has long attributed to local managers acting without authority. “Many of these lawsuits were filed years ago, and the allegations are not representative of the company we are today,” Tom Mars, general counsel and executive vice president at Wal-Mart Stores, said.
The settlement — which wipes out all but 12 pending wage-and-hour lawsuits against Wal-Mart — also gives the company a cleaner slate as a new administration enters the White House. President-elect Barack Obama has indicated he will make wage-and-hour enforcement a priority, and groups critical of Wal-Mart suggested that the company had reached the settlement to avoid becoming a target of stepped-up enforcement.
“Wal-Mart is scared with what they’re going to face in an Obama administration,” said David Nassar, of Wal-Mart Watch, a union-financed advocacy group. “You clean up your house before the in-laws come over. That’s what they’re trying to do.”
Wal-Mart officials say that in recent years, they have taken strong steps to reduce wage violations, ordering managers not to demand off-the-clock work and threatening to fire employees who work off the clock or do not take their designated lunch and rest breaks. Wal-Mart has even programmed its cash registers and other equipment to stop working when employees are not on the clock.
Robert Bonsignore, co-counsel in nearly 40 of the cases, said that as a result of the settlement, “Wal-Mart can now say that it has taken action to make its stores a great place to shop and work.” Wal-Mart said it would take a charge of $250 million, or 6 cents a share, in this quarter to help finance the settlement.


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