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| Science Forum Index » Economy Forum » Wal-Mart Suffers Two Big Defeats |
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| Steven L. Robinson |
 Posted: Thu Jan 12, 2006 10:19 pm |
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Wal-Mart Dealt Legal Setbacks on U.S. Workers' Rights
<http://quote.bloomberg.com/apps/news?pid=10000006&sid=aDYNXv6NxaOY&refer=ho
me>
Jan. 12 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer,
suffered defeats in two U.S. states that may add pressure to the company to
change its employment practices. The shares had their biggest decline in a
month.
In Maryland, the Senate today voted to override a veto of the ``Wal-Mart
bill'' requiring companies with more than 10,000 employees to pay for some
health-care benefits. A Pennsylvania judge last month granted class-action
status to a lawsuit claiming Wal-Mart employees were pressured to work
through breaks and after hours.
The latest actions add to legal and legislative setbacks for Bentonville,
Arkansas-based Wal-Mart that may affect how much Wal-Mart provides in pay
and benefits to its 1.3 million U.S. employees. The company is already
appealing a California jury decision last month that awarded Wal-Mart
workers $172.3 million in another off-the-clock case. The company also
settled a similar case in Colorado for $50 million.
``They have very slim margins already and I find it hard to believe that
they're not going to have to step up and do more in terms of health care and
that's going to affect their margins, and therefore their earnings,'' said
Patricia Edwards, who helps manage about $6.4 billion at Wentworth, Hauser &
Violich in Seattle, including Wal-Mart shares.
Shares of Wal-Mart fell 83 cents to $45.74 at 4:01 pm in New York Stock
Exchange composite trading. Shares declined 11 percent last year.
Veto Override
The Maryland Senate today voted 30-17 to override Republican Governor Robert
Ehrlich's May veto of a bill requiring companies with more than 10,000
employees in the state to pay a set amount of money for health-care
benefits.
The state's House of Delegates plans to cast its vote later today. An
override of a veto requires a three-fifths vote from both chambers of the
state legislature.
The legislation, called the Fair Share Health Care Fund Act, requires large
companies to devote at least 8 percent of their payroll to health care and
would become the first U.S. state law of its kind. Wal-Mart employs almost
17,000 people in Maryland and is the only company there known not to meet
the bill's requirements.
More than 30 other states, including Michigan and Wisconsin, are considering
similar measures.
``This is a great moment for working families of Maryland and for businesses
that do the right thing,'' said Vincent DeMarco, head of Maryland Citizens'
Health Initiative, an advocacy group in Baltimore that supports the bill.
``After the House votes, this measure will sweep the country.''
An override could prompt Wal-Mart to rethink its plan of opening a
distribution center in the state that would provide 800 jobs, company
spokesman Nate Hurst said yesterday.
Jobs At Stake
``Maryland legislators shouldn't be putting these jobs at risk by making
laws that attack Wal-Mart,'' he said.
More than 600,000 workers receive health care coverage from Wal-Mart, making
it one of the largest insurers in the U.S., Wal- Mart spokesman Kevin
Thornton said. It's also one of the few retailers to offer health insurance
to part-time employees, he said.
In state court in Philadelphia, Judge Mark Bernstein last month granted
class-action status to a lawsuit against Wal-Mart that claims workers were
pressured to work off the clock.
The suit could include as many as 150,000 former or current employees in the
state who have worked at a Wal-Mart store or the company's Sam's Club
warehouse chain since March 1998, Michael Donovan, the lead plaintiff's
lawyer, said in an interview today The suit was approved for class
certification last month.
Going To Trial
Wal-Mart has given ``every indication'' that it will go to trial rather than
settle, said Donovan, from the firm Donovan Searles LLC in Philadelphia. He
said he expected the trial to start in Philadelphia in early September.
Wal-Mart will discipline managers who allow off-the-clock work, Wal-Mart's
Thornton.
``We strongly deny the allegations in this lawsuit,'' he said. ``Wal-Mart's
policy is to pay associates for every minute they work. Certifying this as a
class does not mean that the company has done anything wrong or improper.
There has been no ruling on the merits of the plaintiffs' claims.''
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