Walmart legal troubles mount as Black Friday walkout looms
Walmart workers aren’t happy, and they’re letting their employer know it.
In the midst of worker strikes in several cities and the looming threat of a mass employee walkout on Black Friday (one of the busiest shopping days of the year), the world’s largest retailer has been hit with a class action lawsuit affecting temporary workers in the Chicago area.
The filing accuses Wal-Mart Stores, Inc. and two temporary staffing agencies in the region – Labor Ready Midwest Inc. and QPS Employment Group, Inc. – of breaking minimum wage and overtime laws for temp workers by making them show up early and work through lunch breaks. The lawsuit also alleges that Walmart failed to pay contracted workers the requisite four hours minimum in wages.
“We’re still reviewing the complaint but, based on the UFCW’s press release, one thing is clear: This litigation is being driven by the same union organizations that have been mischaracterizing several issues about Walmart and are more concerned with creating publicity than with improving workers’ rights," Walmart spokesman Dan Fogleman responded via email. “We are committed to ensuring that anyone working in our stores – whether they’re employed by Walmart or, in this case, a temporary staffing agency – is treated appropriately and compensated fairly for every hour they work."
The legal action comes at the tail end of what has been a tumultuous month for Walmart's perpetually rocky relationship with its workers. On Oct. 4, 71 employees in and around Walmart's Pico Rivera, Calif., store in the Los Angeles area participated in a day-long strike that spread to several metropolitan areas, including Chicago, Dallas, Miami, San Francisco, and Washington, D.C, according to the Making Change at Walmart campaign. Additionally, a group of workers staged a protest outside Wal-Mart Inc.'s Bentonville, Ark,, headquarters during the company’s annual investors meeting.
Though known for suppressing wages, I found evidence that the company is willing to change working conditions with sufficient pressure. According to St. Louis Federal Reserve President William Poole, the last time there was significant labor unrest at Walmart, in 2006, the company raised wages at 700 stores. Poole, like many at the Fed, regularly spoke with Walmart executives, and they gave him unvarnished views about their business practices because they believed (as did Poole) that the information would be used solely for macro-economic forecasting. On March 27-28, 2006, Poole said that his Walmart contact told him the company would not raise wages, and was planning on moving their work force increasingly towards part-time employment. Poole was interested in this because of its bearing on inflation. “Wages,” he said, “and these are for hourly workers, are absolutely flat – no increases whatsoever in the last year and no increases planned going forward.” Poole continued, “About 20 percent of their associates are part time and that they are going to be increasing that share to 40 percent so they can staff at peak times and get more productivity out of their workforce.”
Just two months later, Poole offered some very different and shocking news, “My Wal-Mart contact also said that “Wal-Mart is in the process of raising starting wages in about 700 stores. This is the first time in eight years of talking with him that I’ve heard any comment like that. He said that some of the raises are part of the Wal-Mart, I’ll call it “Social/political” agenda because of all the controversy about Wal-Mart.” The FOMC transcripts are as close as we’re going to get to internal corporate dialogue without discovery or leaks. The reason I found this information is because Walmart has become a significant presence at the Fed; forecasters at the key Federal Open Market Committee meetings increasingly rely on what the retailer tells them about the economy. Now, FOMC transcripts aren’t released for at least five years, so we don’t know whether this strike is registering with those high level policymakers. But the last time there was a far less aggressive union-backed attack on Walmart‘s business practices, it did.
