Tuesday, July 31, 2012

Walmart Employee Complaints and Walmart lawsuits

Wal-Mart is the largest employer in the world, and accounts for 2 percent of the nation's gross national product.(Cappeli)  It is no surprise that it has continually been on the news mainly because of human resources issues, employee compaints, and lawsuits.  The following report highlights these issues and offers recommendations to alleviate the problems.

Cappeli, Peter "Wal-Mart and the Obligations of Business" HRExecutive.com.   March 6, 2006

Company Profile:

The very first Wal-Mart store opened in 1962 in Rogers, Arkansas.  It was founded by Sam Walton who had a passion for customer satisfaction and everyday low prices.  Wal-Mart is now the world's biggest retailer, and the world’s biggest employer - with over 2 million people.  It not only operates in the U.S, but 12 other foreign countries as well.  As of April 2009 the company had 7,928 retail units worldwide.  Wal-Mart reported over 401 billion dollars in sales in 2009 with a net income of 13.4 billion in 2009.

Associates at Wal-Mart are eligible for health coverage for as little as $8 per month.  Children of Wal-Mart associates are also eligible for health coverage.  More than 92 percent of Wal-Mart employees have health coverage, and all employees who have health coverage through Wal-Mart are also offered generic prescription drugs for as little as $4.

Wal-Mart employees are eligible for 10 percent of all regularly priced Wal-Mart general merchandise; 10 percent off fruits and vegetables; 10 percent off glasses and contacts at Wal-Mart's Vision Centers; and over 100 discounts at walmartbenefits.com

In 2008 Wal-Mart put $870 million into Profit Sharing and 401k accounts.  Wal-Mart also offers an Associate Stock Purchasing Program that allows associates to purchase stock without most brokerage fees, and Wal-Mart matches a portion of the purchase.

"Wal-Mart" http://nyjobsource.com/walmart.html

Walmart discrimination in the workplace lawsuits

Equal Workplace Rights:
Despite four decades of focus on equal workplace rights, gender discrimination concerns still persist.  Wal-Mart has never been found guilty of gender discrimination, and it may never be - considering many of these cases are settled out of court.  But as recently as 2007, in the case of Dukes v. Wal-Mart, 1.5 million women got the go-ahead from federal appeals court for a class-action lawsuit, with claims that Wal-Mart shortchanged female employees on opportunities for promotion.

Patricia Surgeon, a plaintiff in the lawsuit claimed that she was a layaway manager making $7.50 an hour.  But when she was reposted to the cashiers office, her replacement made nearly twice as much.  She also stated that, "[Wal-Mart] would never post [open management positions]," and claims her bosses often assumed that she wouldn't be interested in jobs that would require her to relocate.  She recalls that they would say "you have a family, you can't do that."

These types of cases are hugely detrimental to a large business.  They get bad press from the media, and they're usually forced to settle things out of court rather than risk losing a trial.  Robin Conrad a vice president for the US chamber of commerce says, "it's basically extortion" for the plaintiffs.
In order to prevent discrimination in the workplace lawsuits and other Walmart employee complaints  Walmart should adhere to the recommendations on avoiding job promotion discrimination are mentioned later in this report.

Trumbull, Mark "Wal-Mart suit shows glass ceiling still an issue" The Christian Science Monitor.  February 8, 2007.  <http://www.csmonitor.com/2007/0208/p01s02-ussc.html>

Illegal overtime at walmart

Overtime disputes:
Wal-Mart has had its fair share of overtime disputes and employee complaints for illegal overtime.

In 2007 Wal-Mart paid $33 million in back wages to thousands of employees after turning itself in to the Labor Department for paying too little in overtime in the previous 5 years.

In October of 2006 Wal-Mart workers in Pennsylvania won a $78.5 million judgment for being forced to work off the clock and through rest breaks.  Workers claim they were intimidated into working past store hours, and through lunch breaks by the threat of being denied promotions or pay raises.

In August of 2009, Maria Gamble, a former Wal-Mart employee filed a class-action suit against Wal-Mart on behalf of 20,000 current and former employees for forcing employees to work without pay, sometimes locking them in the store into the stores after their shifts were over.  Gamble claims that she was routinely locked in the stores at night and forced to count out registers and restock merchandise, despite being off the clock.  She also claims that Wal-Mart would require employees to work through their meals and rest breaks although Wal-Mart was not providing "spread of hours pay" which requires for an employee working more than 10 consecutive hours to be entitled to one additional hour of minimum wage pay.

In order to eliminate employee complaints, Wal-Mart needs to adhere to the overtime laws mentioned later in this report.

Valenti, Catherine "Employee Sues Wal-Mart for Overtime" ABC News  August 9, 2009 <http://abcnews.go.com/Business/Story?id=87844&page=1>

The Associated Press "Wal-Mart Settles Overtime Dispute" MSNBC.com.  Jan 25, 2007 <http://www.msnbc.msn.com/id/16809248/>

Walmart Unfair Termination

Unfair Termination at Walmart
Majid Hamade was fired from a Massachusetts’s Wal-Mart after he flicked another employee on the forehead with his finger.  He did this after he claims he was bullied and tormented because of anti-foreigner sentiments by his co-workers.  Hamade stated that he was harassed and ridiculed every day by his co-workers.  At one point Hamade's co-workers threw a paint can and a cup of coffee at him.  Hamade was fired but his tormentors went unpunished, so Hamade took the case to court.

The employee voice system, disciplinary procedures, and termination procedure recommendations I have provided later in this report should be used to handle this type of issue fairly to avoid future Walmart employee complaints.

Chesto, Jon "Fired Worker Sues Wal-Mart Stores" Mar. 21, 2008.  wickedlocal.com

Walmart Human Resource Recommendations

Walmart Human Resource Recommendations

Walmart employee voice systems:
As is in the unfair termination case above, lawsuits occur when a manager fails to avoid using fair and effective disciplinary tactics.  This could be due to the manager being unaware of the organizational rules and procedures, the manager's fear of formal grievances, or the fear or losing the friendship of the employee.  Managers should be informed of the consequences of not pursuing disciplinary action to help avoid this type of mishap.

Managers at Walmart should also allow provide employees with the opportunity to be heard, and communicate their problems with their bosses to avoid Walmart employee complaints.  Voice systems can allow an employee to seek a formal, or informal, impartial review of an action that affects him or her.  There should be an open-door policy which allows employees to voice their concerns to their supervisors, and a skip-level policy which allows an employee to voice their concern to higher-level management if their problem involves their supervisor.  Employees should also be provided with toll-free numbers they can call to anonymously voice their concerns.   These type of systems are simple to understand, trustworthy and apply to a broad range of issues.  The system needs to be well-advertised, and information on how to file and complaint should be publicized in order to maximize its effectiveness in eliminating Walmart employee complaints.

Cascio, Wayne "Managing Human Resources"  Chapter 14.  McGraw Hill 2009

Walmart Workplace Discipline

Disciplining employees:
When absenteeism, poor performance, or rule violations arise, it is often best to resolve the issue with an informal conversation or coaching sessions.  Proper workplace discipline is something that Walmart has failed to do. When a repeat violation, or a violation of more serious nature occurs it is best to follow a procedure of progressive discipline that proceeds from an oral warning, to a written warning, to a suspension or dismissal.  For this to be effective a manager needs to know; what the problem is, what he or she must do to fix the problem, have a time period to fix the problem, and understand the consequences of inaction.  Managers must be immediate in applying discipline.  He or she must inform employees of the consequences of undesirable work behavior.  And managers must be consistent and impersonal in imposing discipline to assure fairness.   This is the best way to go about workplace discipline for Walmart

Cascio, Wayne "Managing Human Resources"  Chapter 14.  McGraw Hill 2009

Walmart Illegal termination

Walmart has been involved in legal battles in illegal termination. Terminating employees is a difficult task that a manager has to deal with.  Inequality or procedural injustice to those who are terminated is often what drives them to court.  It is recommended that manager's provide discipline in the form of written warnings and final warnings, as this type of documentation helps in court.  Documented warnings need to include what led up to the incident, the problem, and the setting, and whether it’s a first offense or not.  It should include specifically what happened - including names, times, witnesses and all other related facts.  The warnings need also describe what must be done to correct the situation, and a time frame to do so, and should state the consequences of further violations.

Cascio, Wayne "Managing Human Resources"  Chapter 14.  McGraw Hill 2009