GLOVER COLUMN: Wal-Mart wonders from its roots

Published 12:00 am Wednesday, February 7, 2007

Despite unbridled financial success that elevated the family run company from its local roots in Arkansas, Wal-Mart and its policies are beginning to draw the ire of its employees and many members of the general public.

The company has been lambasted in the past few years over a myriad of company policies and the accusations of its employees. The company has been demonized in many circles for its policy of providing low wages for many employees, limiting hours employees can work to rid itself of overtime pay and, many times, limiting the benefits of employees though policies that make it difficult for them to qualify for full time benefits.

Yet the company continues growing, stating record profits and expanding into other markets, where its ability to provide low cost goods strangles out small competitors that cannot withstand the juggernaut presence of Wal-Mart.

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That could all change in the not to distant future as Wal-Mart braces for the financial blow that it could face from a class action lawsuit, which the Ninth Circuit Court of Appeals in San Francisco ruled on Tuesday. The lawsuit was brought against the company alleging sexual discrimination that limits the pay and mobility within the ranks of the company for female employees.

Not only is the case bad for the ailing image of &8220;America’s Company,&8221; but the fallout for the company could be financially detrimental if not devastating. The opinion of the court stated:

&8220;This case involves the largest certified class in history. The district court was cognizant of this fact when it concluded that the class size, although large, was not unmanageable. In analyzing the manageability of the class at all stages of the case, the district court reasoned that if Wal-Mart was found liable of discrimination the court could employ a formula to determine the amount of back pay and punitive damages owed to the class members.&8221;

The statement comes on the grounds of the appeal filed by Wal-Mart on the legality of such a large class action lawsuit. Wal-Mart contends that the size and general theme tying all class members into one suit is against the law and that the company should be able to face the charges on a one on one basis with those seeking claims.

Wal-Mart does little to argue against the fact that its policy did discriminate among the sexes of its employees. It opted to claim that by lumping such a large number of accusations against it, the company was unable to adequately defend itself.

Aside from the fact that Wal-Mart did little to keep the mud off of its reputation by defending against the claims, it is an asinine argument to appeal for the court to allow individual trails in each case. While such a measure will deter quite a few of the class against Wal-Mart, the company is facing a class action suit from approximately 1.5 million employees who are or were employed by its 3,400 stores nationwide. The plaintiffs originally sought the class to be defined as:

But the court decided to limit that group somewhat, allowing for the current class size.

Facing a court battle with even a minute portion of this group from across the nation would cost the company nearly as much as the estimated billions of dollars in claims it is looking to hand out in this case. And the plaintiff isn’t even looking to hit the company with compensatory damages, only punitive damages to punish Wal-Mart for the alleged &8220;reckless disregard of the rights of its women employees to equal employment opportunity, and to deter similar misconduct by Wal-Mart and other large retailers in the future.&8221;

The conclusions of the appeal court concurred with the original decision on allowing the class to be formed from such a diverse range of claims, stating that all claims had the common factor of a corporate policy of discrimination towards women.

In its conclusion the court stated:

Though there was a dissenting opinion on the merits of the common theme throughout the class, no member of the court mentioned any notion that Wal-Mart was not at fault for cooperate policies that discriminate against women. Nor did Wal-mart in its appeal.

It seems that Wal-mart would do better to focus on its detrimental policies such as sexual discrimination, as well as its other policies drawing the ire of its employees and the public, rather than trying to weasel out of a decision on a technicality. The company should focus less on the bottom line, which has gained them the resentment of many communities and made them one of the most successful companies ever, and return to the family values that the company exhibited and grew from during its formative years in backwoods Arkansas.