Wal-Mart and Labor Laws
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Labor Laws
Off The Clock
It is alleged that Wal-Mart's salaried managers have pressured hourly employees to work "off-the-clock" in order to avoid overtime pay. [[Citing sources citation needed]]As of the time of submission of Wal-Mart's 10-Q Report for the quarterly period ended October 31, 2005, the company faced "numerous cases containing class-action allegations in which the plaintiffs have brought claims under the Fair Labor Standards Act (“FLSA”), corresponding state statutes, or other laws. The plaintiffs in these lawsuits are current and former hourly Associates who allege, among other things, that the Company forced them to work “off the clock,” or failed to provide work breaks, or otherwise claim they were not paid for work performed."[link]
Wal-Mart's 10-Q further details that "Class certification has yet to be addressed in a majority of the cases. Class certification has been denied or overturned in cases pending in Arizona, Arkansas, Florida, Georgia, Indiana, Louisiana, Maryland, Michigan, Nevada, New Jersey, North Carolina, Ohio, Texas, West Virginia, and Wisconsin. Some or all of the requested classes have been certified in cases pending in California, Colorado, Massachusetts, Minnesota, Missouri, New Mexico, Oregon, and Washington. Conditional certifications for notice purposes under the FLSA have been allowed in cases in Georgia, Michigan, and Texas."
In 2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had worked off-the-clock. These employees, as well as several former managers, have testified that Wal-Mart had an unofficial policy requiring off-the-clock work, to keep the cost of payroll down. [link]
Class-action suits were filed in 1995 on behalf of full-time Wal-Mart pharmacists whose base salaries and working hours were reduced as sales declined, resulting in the pharmacists being treated like hourly employees. Initial judgments ruled in favor of the plaintiffs, but an appeal by Wal-Mart resulted in the cases being remanded to a lower court in February 2005 due to insufficient evidence that Wal-Mart committed the offense often enough that the salaries were equivalent to hourly wages. [link] [link]
Meal and Rest Breaks
As of the time of submission of Wal-Mart's 10-Q Report for the quarterly period ended October 31, 2005, the company reported: "The Company is a defendant in Savaglio v. Wal-Mart Stores, Inc., a class-action lawsuit in which the plaintiffs allege that they were not provided meal and rest breaks in accordance with California law, and seek monetary damages and injunctive relief. The trial began on September 6, 2005, in the Superior Court of Alameda County, California. The Company believes that it has substantial factual and legal defenses to the allegations at issue."[link]
Child labor violations
In January 2004, the New York Times reported on an internal Wal-Mart audit conducted in July 2000 which examined one week's time-clock records for roughly 25,000 employees. According to the New York Times, the audit "pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals" including 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times. Wal-Mart’s vice president for communications, Mona Williams, responded that company auditors had determined that the methodology used was flawed. "This audit is so flawed and invalid that we did not respond to it in any way internally." [link]Today Wal-mart gets fifteen days' notice before child labor inspections. [link]
Arrangement with Department of Labor
Under an arrangement, disclosed by the New York Times, Wal-Mart will be allowed 15 days to investigate and rectify employee complaints before the Department of Labor conducts any investigation. Upon receiving a complaint about a potential violation of wage and hour laws, DOL’s field offices around the country are now instructed to notify the DOL office in Little Rock, Arkansas, which will then notify Wal-Mart’s headquarters in Bentonville, Arkansas of the complaint. The Department will not launch its own investigation during that time and it remains unclear under what circumstance it would launch an investigation after the 15 day period ends, Representative George Miller (D-California) requested an investigation by the DOL’s Inspector General to determine whether the arrangement represents a sweetheart deal between the Bush Administration and Wal-Mart. [link]Critics respond that Wal-Mart’s labor law violations range from illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employees who dare to speak out. [“Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart," A Report by the Democratic Staff of the Committee on Education and the Workforce, 2/16/04]
Illegal use of undocumented workers
Since 1997, investigators have found 250 illegal immigrants working at Wal-Mart stores. These individuals were employed by custodial services subcontractors used by Wal-Mart. Many of the janitors worked seven days a week without overtime pay or injury compensation. To settle federal criminal charges relating to these incidents, Wal-Mart paid $11 million in March 2005 without admitting wrongdoing or liability. [link] There were no charges brought against Wal-Mart or any of its associates. Several of the custodial services firms that employed the illegal immigrants pled guilty to criminal charges.On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states, in a crackdown known as "Operation Rollback". [link] When they left, the agents had arrested 250 nightshift janitors who were undocumented workers. Following the arrests, a grand jury convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Mart executives have tried to lay the blame squarely with the contractors, federal investigators point to wiretapped conversations showing that executives knew the workers were undocumented.
Additionally, some of the janitors have filed a class-action lawsuit against Wal-Mart alleging both racketeering and wage-and-hour violations. According to the janitors, Wal-Mart and its contractors failed to pay them overtime totaling, along with other damages, $200,000. One of the plaintiffs told the New York Times that he worked seven days per week for eight months, earning $325 for 60-hour weeks ($5.41 per hour), and that he never received overtime pay. A legal question now being raised is whether these undocumented workers even have the right to sue their employers.
The October 2003 raid was not the first time Wal-Mart was caught using undocumented workers. In 1998 and 2001, federal agents arrested 102 undocumented workers at Wal-Mart stores around the country. [link]
In February 2004, "the civil rights suit filed against Wal-Mart Stores Inc. by illegal immigrants was expanded Monday to accuse America’s biggest retailer of locking its janitors inside stores during their shifts."[link]
In March 2005, Wal-Mart settled the lawsuit the government brought against them, for $11 million. "We acknowledge that we should have had better safeguards in place to ensure our contractors were hiring only legal workers," said Mona Williams, a Wal-Mart spokeswoman. "That's why we are agreeing to pay the $11 million." [link]
In November 2005, 125 alleged illegal immigrants were arrested while working on construction of a new Wal-Mart distribution center in eastern Pennsylvania. According to Wal-Mart, the workers were employees of Wal-Mart's construction subcontractor. [link]
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