CASE STUDY

Wal-Mart case study

Wal-Mart case study

Introduction

Starting off with Sam Walton's idea of low prices in the 1940s, Wal-Mart has since then become the world's largest public corporation, topping the list of Fortune's Global 500 for the sixth time in seven years. With headquarters in Bentonville, Arkansas, this retail giant has over 2 million employees worldwide, with 1.4 million within the United States alone, making it one of the largest private employers in the nation (Wal-Mart Stores, 2008).

Like any other global corporation, Wal-Mart is engaged in multiple and complex relationships with number of different stakeholders. Labor unions, environmentalist groups, grassroots organizations, religious groups and community members have criticized Wal-Mart for its perceived lack of concern in its current business practices and policies. Complaints have included unequal employment opportunities to lack of health insurance leading to lawsuits, which were close to 5,000 in 2000 (Willing, 2001). The opposition came to a head in 2005, as two advocacy groups specifically targeting Wal-Mart were formed in spring 2005 to unite disgruntled community members: Wake-Up Wal-Mart, a union group backed by the United Food and Commercial Workers, and Wal-Mart Watch, a joint project of the Center for Community and Corporate Ethics. The mission of both groups was to cause the corporation to improve its practices for its employees, its customers, and the surrounding communities in a more ethical and acceptable way.

The Issue: Employee Relations and Workers' Rights

Over the past several years Wal-Mart has been criticized for its large number of violations regarding wages and work hours for its employees. In 2003, Wal-Mart associates made $8.23 an hour, amounting to $13,861 a year, almost $1,000 below the federal poverty line for a family of three. However, by 2008, the average hourly wage for full-time employees had increased to $10.83 and is even higher in more urban areas (De Avila, 2007). But, in spite of the increased wages, there have been an increasing number of lawsuits against Wal-Mart regarding managers forcing employees to work off the clock, requiring associates to skip lunch and short breaks, and tampering with time and wage records. By 2008 the company was simultaneously facing 80 different lawsuits that involved these labor-related issues. One of these cases was a $50 million settlement involving 69,000 workers in Colorado in 2000. Another awarded back pay to 83 workers in Oregon who were forced to work off the clock. According to attorney Justin Perl, who was a part of the team that represented 56,000 Wal-Mart and Sam's Club hourly workers in Minnesota, “Wal-Mart knew what they were doing. They knew why they were doing it, and they were hiding the evidence to avoid liability.”

Wal-Mart has also been criticized in terms of gender discrimination against women associates. On February 6, 2007 the ninth circuit court of appeals ruled that the company must face a class-action lawsuit of 1.6 million female workers who claim that they were not treated fairly in terms of pay and promotions (Bianco & Zellner, 2003). Though Wal-Mart attempted to appeal this order and have ...