Current Legal Developments
Concerning Wal-Mart

Latest News - Newly Updated!

Lawsuits Surge As More Wal-Mart Workers Seek Pay For Overtime. The latest reports indicate that Wal-Mart is fighting 38 different state and federal lawsuits filed by hourly workers in 30 states, accusing the company of systematically forcing them to work long hours off the clock. Two years ago, Wal-Mart settled a similar suit in Colorado reportedly for $50 million. The terms of the settlement were confidential, and Wal-Mart will say only that the actual amount is far less than has been reported. Most lawsuits are waiting to be certified as class actions so thousands of workers with similar claims can be represented together. According to the New York Times, June 25, 2002, 23 states are awaiting rulings for class action status, two states were denied class status but are appealing, and three states have been granted class action status. Two additional states, Mississippi being one, joined the “off -the-clock” lawsuits bringing the total to the current 30 states. Many of the 30 pending lawsuits claim that Wal-Mart withheld overtime pay in a companywide effort to contain overhead and undersell competitors. Although its policy prohibits off-the-clock work, Wal-Mart has created a system of rewards and punishments that critics say gives managers strong incentives to demand such work. Under one bedrock policy described in a deposition by a senior payroll executive, store managers are ordered to keep payroll costs below a target that headquarters sets for every store. If a store misses its target, several former executives said that the manager faces a reprimand and sometimes demotion or dismissal. Wal-Mart gives store managers another incentive to squeeze down labor costs by pegging annual bonuses to the profits of individual stores, a system rare among the big retailers. Wal-Mart declined to provide compensation figures, but according to depositions and interviews, many store managers have a base salary of $52,000 with bonuses often running $70,000 to $150,000. Wal-Mart officials played down the extent of unpaid work by saying that employees often came forward to complain only after calling toll-free numbers that lawyers had established to seek information about off-the-clock work. “Off -the-clock work is not prevalent at Wal-Mart despite the determined efforts of a few plaintiffs’ attorneys to make it seem so,” William Wertz said. But lawyers and union officials say that not only is the practice prevalent at Wal-Mart, but that the complaints against Wal-Mart are far greater than at Target, Sears or K-Mart. According to the New York Times, Wal-Mart employees described these types of off-the-clock work: on many evenings when their stores closed, managers locked the front door and prevented workers from leaving — even those who had clocked out — until everyone finished straightening the store; employees at stores in several states said managers ordered them to clock out after their eight-hour shifts and then continue working; some employees said that they frequently took it upon themselves to clock out after their regular shift and then return to work, with their manager’s knowledge and approval. These workers said that they feared that if they did not finish their daily tasks before going home, they would be written up or fired.

Wal-Mart Pharmacists File Class-Action Lawsuits Over Pay — Colorado. Two class-action suits have been filed, one in Colorado’s 2nd Judicial District Court and one in U.S. District Court in Denver, involving more than 8,000 pharmacists who charge Wal-Mart owes them $200 million in pay. According to the complaints, one pharmacist claimed that in one 10- hour shift 200 prescriptions can be filled and up to 3 hours of paperwork is completed at home. Wal-Mart continued to pay their pharmacists for 45 hours. When one pharmacist complained to management that he was working more than 45 hours, he was fired on the charge of misfilling a prescription. William Wertz, spokesperson for Wal-Mart, stated that both cases involve complaints that occurred before 1998, and Wal-Mart has since changed its policy regarding pharmacists’ wages. Wertz could not provide details of those policy changes. Wal-Mart’s cost-cutting policies, particularly the lack of staff to pharmacists, is a leading factor for some pharmacists to sue. When Wal-Mart came to Trinidad, Colorado, five independent pharmacists closed their shops because they could not compete with the retail giant.

Wal-Mart Designated “Merchant of Shame.” The National Organization for Women (NOW) designated Wal-Mart as a “Merchant of Shame” in recognition of its exceptional performance. This victory over many deserving competitors probably came as a surprise to the general public. Wal-Mart presents itself as a model of retail success and employee-friendly practices. However, in practice, Wal-Mart’s treatment of its women workers is indeed shameful, and those who take advantage of its compliance process often find themselves on the street. According to Equal Employment Opportunity Commission data, women make up almost three-quarters of Wal-Mart sales workers but less than one third of management — a proportion substantially lower than its competitors’ average of 55%. Only one of Wal-Mart’s top 20 officers and 10% of its store managers are female. On average, as the NOW survey reveals, full-time sales associates earn only $6.10 an hour, which frequently leaves their annual earnings below the poverty level with half of these full-time employees qualifying for federal food stamps. Three public interest organizations, Equal Rights Advocates, the Impact Fund and the Public Justice Center have organized a nationwide class action on behalf of current and former female Wal-Mart employees, alleging sex discrimination in promotion, pay and training. If the class is certified, it would be the largest of its kind against a private employer, with as many as 700,000 plaintiffs. This suit serves as a wake-up call to the public in general and to the retail sector in particular.

Wal-Mart Tightens Policy on Gun Sales — Arkansas. Wal-Mart, the nation’s largest gun seller, has implemented a rule requiring customers to be approved in a background check before they can buy rifles and shotguns; Wal-Mart does not sell handguns. The new policy exceeds federal guidelines and represents a victory for gun-safety advocates. Store managers were told to stop selling firearms in cases in which authorities were not able to determine whether the would-be buyers should be banned from owning a weapon. After Wal-Mart’s own research showed that weapons it sold were being used in crimes, the company began requiring background clearance for all gun buyers, no matter how long it takes.

Wal-Mart Changes Tactics to Settle Lawsuits — Arkansas. In the last three months, Wal-Mart has settled long-standing claims ranging from slip-and-fall injuries to abductions of customers in store parking lots according to lawyers. Previously those who sued Wal-Mart often found that they had to spend more money litigating than they might recover in damages because Wal-Mart fights claims to the bitter end. According to a 2001 report in USA Today, Wal-Mart was sued about 4,900 times in 2000. Wal-Mart has also been punished more than 60 times in the last six years by judges for concealing or destroying evidence and for delaying customer lawsuits. Wal-Mart officials seem more concerned than their predecessors about the publicity of being sanctioned by judges for keeping evidence from customers and have made their legal department more pro-customer. In May, 2002, without public announcement, Wal-Mart replaced its general counsel Robert K. Rhoads with Tom Mars. Mars, who used to represent clients who sued companies, took the litigation job in January, 2002, replacing Ronald Williams. Mars, a former director of the Arkansas State Police, takes over a department that has grown from 24 lawyers in 1998 to about 80. Wal-Mart also dropped a 13-year old policy of paying many of its outside lawyers a flat, per-case fee, which often discouraged attorneys from spending time needed to respond to customers’ demands to produce documents and other evidence before trial. In April, 2002, again without public announcement, Wal-Mart abandoned these flat-fee arrangements; attorneys are now paid on an hourly basis. “They’re supposedly trying to become a kinder, gentler Wal-Mart,” said Lewis Laska, Wal-Mart Litigation Project Director. “Lawyers are calling me in a mild state of bewilderment, saying, “They just offered me $75,000. I tell them to take the money.” They’re so surprised because of Wal-Mart’s reputation, said Laska, and are suspicious because they wonder if they’re somehow overlooking a key element about their case. However, Laska warns that he only has anecdotal evidence that indicates Wal-Mart has changed its legal strategy. While Laska has seen evidence that indicates there is a new willingness to settle cases, he said that Wal-Mart has released nothing that indicates a change in corporate culture.

April - June, 2002

Five Wal-Marts Test Used Car Sales. According to USA Today, (Monday, April 22, 2002) Wal-Mart is teaming with Asbury Automotive, the fifth-largest dealership chain, to offer used cars at some of its stores as part of a six-month test project that could go nationwide. Asbury Automotive will open used car stores on the parking lots of five Wal-Mart stores in Houston beginning in May. The stores, which will be called Price 1, will have 70 to 100 used cars up to 4- years old and with less than 75,000 miles. The cars will have no-haggle prices and feature a five-day, no-questions asked, money-back guarantee, a 30-day exchange policy and a 3,300-mile warranty. Buyers also get 12 months of free roadside assistance. The stores will be modeled after Circuit City’s CarMax used car superstore chain, which after getting off to a rough start in 1993, now has 40 stores and has become profitable. Price1 could be the first formidable challenger to CarMax since AutoNation’s used car megastores closed in 1999. While the vehicles will be sold in prefabricated buildings on Wal-Mart lots, the Price 1 stores cannot use the Wal-Mart name, and Wal-Mart, which is leasing the land to Asbury, doesn’t have a financial stake in the company. Asbury Automotive, which has 91 dealerships, sells mainly new cars. It went public in March, trading stock on the New York Stock Exchange. Asbury closed at $17.60 Monday, April 22, 2002, up 26 cents. Asbury officials say that by using the high-profile Wal-Mart stores, they can keep car prices and marketing costs down. “We are using the best business models of used car chains that have been successful and avoiding the problems of those that weren’t,” says Ken Gilman, CEO of Asbury. Mike Maroone, COO of AutoNation, the largest dealership chain, cautions that Asbury “won’t be able to leverage the Wal-Mart brand” in its advertising. Wall Street analyst David Campbell of Davenport & Co. says it could be years before Asbury builds the expertise to sell used cars profitably at Wal-Mart locations. Even so, he warns that Wal-Mart’s previous marketing success makes it a potential threat to CarMax. “CarMax’s biggest concern has been that a large retailer such as Wal-Mart would get into the used car market,” Campbell says.

Wal-Mart Liable in Man’s Death — Pharmacy Prescription Error — Widow Awarded $1.27 million — Arkansas. A jury in DeQueen, Arkansas found Wal-Mart liable in the misfilling of a prescription by a Wal-Mart pharmacist which led to the death of a retired man, age 62, on September 4, 1997. The decedent, a heart patient, had been prescribed Zaroxolyn, a diuretic that was to keep fluid off his heart. Instead, he received Ziac, a betablocker. The decedent took Ziac for 2 1/2 months and began to experience water gain. He was hospitalized for five days in DeQueen to control the water gain until he lost it. When he returned home, the decedent resumed taking Ziac. He was hospitalized about a week later in Texarkana where he stayed a month, only to die about a week later of congestive heart failure. Wal-Mart spokesman, Bill Wertz, said that Wal-Mart admitted their mistake in giving the decedent the wrong drug. Wertz said that the medication problem was discovered and admitted by the workers in the De Queen Wal-Mart pharmacy, near the decedent’s home in Lockesburg, Arkansas. “We accepted responsibility and did our best to reach a settlement in the family. It was a terrible accident,” Wertz said. “The issue was whether the misfill was responsible for the man’s death. He was quite seriously ill before we dispensed the medicine.” The decedent’s wife did not pursue punitive damages, which are designed to serve as a financial punishment. Instead, the jury’s verdict, $1.27 million, is for pain, suffering and mental anguish sustained by the decedent’s wife and daughter. According to Wertz, Wal-Mart’s legal team will review its options for appealing the verdict. Wertz said that procedures are in place for checking prescriptions for accuracy. He was not sure what led to the mistake in the decedent’s prescription. Vivian Tucker and John Kenneth Tucker, deceased vs. Wal-Mart, District Court, Sevier (AK) County, Case No.____. Ben Franks, Texarkana, TX, for plaintiff.

Supreme Court Hears Arguments in $1.65 Million Award Against Wal-Mart — Invasion of Worker’s Privacy — Arkansas. Attorneys Bobby Odom of Fayetteville and Ray Bunch of Rogers told the Arkansas Supreme Court that Wal-Mart violated the rights of their client, David Clark of Rogers, and that a $1.65 million jury verdict against Wal-Mart should stand. The attorneys said that Wal-Mart conducted an improper search of their client’s home, cast him in a negative light as a result of its actions, and invaded his privacy by intruding upon his home and workshop. The attorneys stated that Clark was humiliated and embarrassed by the media reports about the August 1998 search and seizure. In 2000, a Benton County jury found in favor of Clark and awarded him the largest civil judgment in Benton county history. David Matthews of Rogers, attorney for Wal-Mart, argued that Wal-Mart acted in good faith. He told the justices that newspaper reports were the basis of the defamation and false accusations, not anything that Wal-Mart did. Matthews said that Wal-Mart had Clark’s permission, both verbal and written, to search his home and workshop, so his rights were not violated. Clark worked in the maintenance department at Wal-Mart’s office in Bentonville and repaired damaged merchandise for the company at a business he operated out of his home. Wal-Mart’s Loss Prevention employees and Rogers police searched Clark’s home in August, 1998, and seized computer components, electronic devices, tools and other items. A total of 437 items, which Wal-Mart alleged Clark had taken from the store, were piled in Clark’s front yard before being hauled away as evidence. Loss Prevention employees said that they had been investigating Clark and other employees in connection with an in-house theft ring. Clark was not arrested or charged with a crime. He was fired from Wal-Mart about a week after the search. Four hundred of the items were returned to Wal-Mart, and Clark was allowed to keep the remaining 37. After an 11-day trial in 2000, a jury found in favor of Clark and awarded him and his wife $1.65 million in combined actual and punitive damages.

Wal-Mart Wage Suit Goes Class Action — Texas. According to the Houston Chronicle, an Angleton, Texas judge has granted class-action status to a lawsuit brought by four former Wal-Mart employees claiming that Wal-Mart cheated them out of wages. The ruling marks the first time a judge in the United States has certified a wage dispute against Wal-Mart as a class action, a spokesman for Wal-Mart said Monday, May 20. The ex-employees claim that their Wal-Mart superiors required them to work “off the clock” and miss rest and meal breaks as a condition of their employment. Their attorneys, who say that the estimated number of class members exceeds 200,000 in Texas, want compensatory damages. Wal-Mart, which has more than 300 stores in Texas, is appealing a ruling made May 1, 2002 by state District Judge Ben Hardin, who ruled in favor of the former Wal-Mart employees. Bill Wertz, Wal-Mart spokesman, said that courts in Ohio, Louisiana and Oregon have ruled against plaintiffs’ attorneys seeking class-action certification for workers who have sued Wal-Mart for wage abuses. According to Wertz, Wal-Mart’s policy is to pay its employees for their work and not ask them to work “off the clock.” He said that if it is a problem, it is not a pattern – it’s an exception that needs to be litigated on a case-by-case basis. Employees are encouraged to report violations, Wertz added. During a two-day court hearing, attorneys for the former Wal-Mart workers presented an analysis of Wal-Mart time records at 14 stores that showed employees missed 41,919 hours in rest and meal breaks during an eight-week period. According to Russell T. Lloyd of Houston, one of the plaintiffs’ attorneys, Wal-Mart employees all around the country are limited in the number of hours they can work but not the work they have to do. The lawsuit contended that Wal-Mart managers cheat the workers to cut store expenses to enable themselves to receive higher compensation and bonuses. The employees say that if they protest not being paid for unrecorded time, Wal-Mart managers feign ignorance, and then blame the employees for violating written company policy, which sometimes results in their firing. In court findings, the plaintiffs’ lawyer stated that damages for each member of the class will be less than $75,000. Besides Wal-Mart Stores, also named as defendants are Sam’s Club and Sam’s East.

NLRB Charges Wal-Mart With Denying Representation — Nevada. The National Labor Relations Board has filed new unfair labor practice charges against Sam’s Club store at 7175 West Spring Mountain Road in Las Vegas. The complaint accuses Wal-Mart of illegally coercing, intimidating and retaliating against employees who sought representation by the United Food and Commercial Workers International Union Local 711. The NLRB contends that Wal-Mart interfered with employees’ rights to hold an election at the Sam’s Club store. The complaint alleges that Sam’s Club managers threatened workers showing union support with termination, improperly fired two union supporters, illegally refused to hire a union supporter, told employees not to talk about the union during breaks and manipulated the bargaining unit so it would favor Wal-Mart. NLRB resident officer Mike Chavez said that this latest NLRB complaint filed April 2, 2002 is the 10th complaint against the Spring Mountain store and two other Sam’s Clubs in Las Vegas in the past year. These charges are similar to those leveled in the previous nine complaints, which caused the NLRB to cancel a November union election at the Spring Mountain store. A hearing for this 10th complaint is set for June 25, 2002. The NLRB also filed an unfair labor practices complaint in September, 2001 against three Las Vegas Wal-Mart stores. Wal-Mart is now in the midst of a trial in Las Vegas on those charges. In addition to the charges in Las Vegas, the NLRB has issued complaints against Wal-Mart for violations of federal labor law that include charges of intimidation, threats, retaliation, coercion and surveillance in: Jacksonville, TX; Tyler, TX; College Station, TX; Lubbock, TX; New Castle, PA; Pittsburgh, PA; Lake Elsinore, CA; Beckley, WV; Buckhannon, WV; Orlando,FL; Ocala, FL; Kingman, AZ; Mountain Home, ID; Pueblo, CO; Tahlequah, OK; Indianapolis, IN Florence, KY; Wasilla, AK and Dubuque, IA.

Wal-Mart Paying $40K In Racial Bias Suit — Kentucky. The state human rights commission ordered Wal-Mart to pay $40,000 to two people who claimed that Wal-Mart fired them because they were an interracial couple. The commission, which made a similar decision in 1991 that was reversed on appeal, entered the order June 7, 2002 in the case of Lottie Burden and Johnnie Hines, who worked in the Russellville, Kentucky Wal-Mart. Burden, who is white, and Hines, who is black, were fired in 1989 for violating Wal-Mart’s fraternization and nepotism policies. Wal-Mart first denied Burden’s request that she and Hines be allowed to date. After an investigation, the commission said it was discovered that other — all-white — couples had violated Wal-Mart’s nepotism policy but had not been terminated, according to the ruling. During testimony in the case, a Wal-Mart manager, whose name was not released, said that he handled the couple’s request to date differently from other dating requests because he felt pressure from other employees about the “black/white thing.” Burden and Hines were each awarded $20,000 for embarrassment and humiliation. Wal-Mart was also ordered to provide diversity training for all employees at the Russellville store. Wal-Mart spokesman Bill Wertz had no comment.

Wal-Mart Settles Suicide Suit — Man Bought Ammo At Store — North Carolina. Wal-Mart has agreed to pay $130,000 to the estate of a man who shot and killed himself after buying ammunition at a Wilmington, NC Wal-Mart. A lawsuit filed in New Hanover County District Court earlier this year accused Wal-Mart of negligence for selling bullets to a male, age 22, and for failing to supervise its employees. On July 31, 2001, after an apparent argument with his estranged wife, the decedent threatened to go to Wal-Mart to buy ammunition to commit suicide. Told of the threat, police warned two Wal-Marts to be on the lookout, but the message didn’t get to the employee who sold the decedent the ammunition, according to David Collins, attorney for the plaintiff. The decedent left the store and barricaded himself in a car, where he shot and killed himself. Wal-Mart, which denied it was responsible, settled out of court. Most of the $130,000 settlement will ultimately go to the decedent’s 3-year-old son according to Collins. Estate of Matthew John VanGraafeiland vs. Wal-Mart Stores, Inc., District Court, New Hanover (NC) County, Case No.____. David Collins, attorney for plaintiff.

Wal-Mart’s Bid to Acquire Amigo Chain Comes Under Justice Department Scrutiny — Puerto Rico. Wal-Mart’s proposed purchase of the 35-store Amigo chain is under investigation by the Puerto Rico Justice Department. The department itself and the FTC, which must determine whether the $225 million deal will create a monopoly, are not permitted to comment on any individual transaction. Indeed, the FTC will not confirm that a particular company has filed a petition for a merger or acquisition until the commissioners vote. The investigation to evaluate whether the transaction would be anticompetitive also is not disclosed, according to a FTC spokesman. Both the market and the players will be studied by the commissioners. In the case of the Wal-Mart deal, FTC approval would give Wal-Mart a foothold in the local supermarket industry. The acquisition, however, would not make Wal-Mart the biggest retailer in Puerto Rico. The island’s largest chain, Pueblo International, Inc. is bracing for tough competition. Pueblo International, which owns 42 supermarkets, is revamping its stores and focusing on service. According to Pueblo International ‘s senior vice president, Pueblo could not engage in a price war with Wal-Mart and win. Wal-Mart has 17 stores in Puerto Rico: nine Wal-Mart stores , one Supercenter in Cayey and seven Sam’s Club stores. Wal-Mart plans to operate the Amigo locations as neighborhood markets anchored by the Wal-Mart Supercenter in Cayey. Pending the FTC decision, Amigo and Wal-Mart continue to operate independently.

Anticompetitive Allegations Investigated — Mexico. Mexico’s antitrust regulator is looking into allegations of anticompetitive behavior by the Mexican unit of Wal-Mart. The preliminary investigation follows complaints by rivals that Wal-Mart de Mexico allegedly strong-arms suppliers into giving Wal-Mart deep discounts. The watchdog said it would look at the case in the next few months to decide if there are grounds for a full investigation. A Wal-Mart spokeswoman said that Wal-Mart had not been formally notified of any investigation by the agency and could not comment. Wal-Mart de Mexico accounts for about half of Mexico’s supermarket sales.

U.S. Supreme Court Rejects Visa/MasterCard Appeal — Class Action Status for Retailers Stands — Washington. The U.S. Supreme Court on June 10, 2002 let stand a ruling by the Second Circuit Court of Appeals in 2000 that gave retailers class-action status in a 1996 lawsuit accusing Visa and MasterCard of using their power in the credit card industry to force merchants to accept their allegedly costly debit cards. The Supreme Court rejected the appeal without any comment or dissent, clearing the way for the case to go back to the trial judge for more proceedings. In contesting class status, Visa and MasterCard said that the retailer class was too large to be manageable, and that the retailers used flawed economic theories in presenting their case. The retailers replied that without class certification, millions of merchants would be deprived of compensation for damages. The card associations also said that, with the retailers’ claim for damages of about $100 billion, the large class could make damages so high that they would be coerced into settling, regardless of the merits of the claims. However, the retailers derided the $100 billion figure for its “apparent shock value.” The retailers told the high court that the case involved preliminary damages of about $8 billion. The retailers said that Visa and MasterCard included in their calculation the $63 billion that the retailers would save over the next decade if the trial judge grants a requested injunction. The lawsuit, led by Wal-Mart, was originally filed in U.S. District Court for the Eastern District of New York on behalf of some 4 million retailers including Sears, Roebuck & Company and Safeway, Inc. In the lawsuit, Wal-Mart and the other retailers objected to having to accept Visa and MasterCard debit cards, saying that the cards carry higher transaction fees than other ATM cards that require customers to enter a personal identification number. The retailers claim that the card associations’ “honor all cards” policy, which requires that if businesses accept any Visa or MasterCard credit cards, they must accept all cards, including debit cards, illegally links credit and debit cards. Visa and MasterCard are owned by major banks and together control more than 75 percent of U.S. credit card sales. As of June 25, 2002, a Brooklyn, New York District Court judge will hear a request from the credit card companies for a summary judgment on December 13, 2002, and the trial has been scheduled to start next April 28, 2003 according to a MasterCard spokeswoman.

Did Wal-Mart Profit From Employees’ Deaths? Family members of deceased Wal-Mart employees are learning that Wal-Mart used a financial practice of taking out life insurance policies on thousands of their rank-and-file workers. According to a lawsuit filed recently in Houston, Wal-Mart took out about 350,000 life insurance policies on the lives of its employees payable to the company. The insurance policies, known as corporate-owned life insurance (COLI), have been the focus of considerable attention in recent weeks, following reports in The Wall Street Journal and other media. That has led to talks by two members of congress about the need to reform the business. This financial practice, used until recently by Wal-Mart, is used increasingly by many other employers. The policies — entirely separate from the life insurance many employers provide to workers as part of their benefits — list the company as the beneficiary, often without the knowledge of the workers or their families. Companies use the policies to earn tax-free investment income. Companies have been taking out life insurance policies on top executives for years, however, broader COLI policies were not marketed until the 1980's when the insurance industry successfully lobbied many states to allow employers to claim an “insurable interest” in the lives of rank-and-file workers. Many employers seized on the practice early on because they could borrow against the policies, and the interest paid was tax deductible. Congress closed that loophole in 1996, but COLI remains a popular corporate investment strategy. The chief appeal is that, over time, interest accrues on the money invested in the policies. When a worker dies, the employer collects on the policy without paying taxes on the gain. The American Council of Life Insurers says that such policies are embraced by companies because they offer a structured, affordable means of assuring they have the money to meet future costs, including but not limited to retiree health care coverage. COLI is not an employee benefit; it is a funding mechanism for meeting future liabilities that the company has, usually some type of retiree benefit. While some companies do use the policies to fund retiree benefits, others appear to have seized on that to explain their usage of COLI as an investment vehicle unrelated to benefits. Wal-Mart, which said that it canceled its COLI policies in early 2000 because it was losing money on the arrangement, has said that COLI was intended to reduce its income taxes to help pay rising employee health care costs. Wal-Mart workers were notified and given the chance to opt out. A number of states already require either notification or consent in some form, although enforcement of such provisions is sometimes limited. As of June, 2002,U.S. Representative Gene Green, D-Houston, has introduced legislation that would require employers to inform workers when such policies have been taken out in their names.

Wal-Mart Sold Gun To Killer; Not Liable For Courtroom Shooting — Texas. On April 25, 2002, a Texas jury decided after only half an hour of deliberations that Wal-Mart wasn’t responsible for the deaths of two lawyers and the wounding of several others in a Tarrant County courtroom, even though the gunman purchased the gun he used at a Wal-Mart store. The shooting happened in Ft. Worth, Texas on July 1, 1992. The gunman, allegedly angry at the court system as a result of his divorce and custody dispute - stormed into a court of appeals proceedings dressed in business attire. He shot and killed two lawyers and wounded two judges and another lawyer. The gunman was tried, convicted and sentenced to death; he was executed in September 1994. Two months before the crime, on May 2, 1992, the gunman had purchased a 9mm Glock semi-automatic handgun at an Arlington, Texas Hypermart, owned by Wal-Mart. Dallas attorney Bill Cobb, who with Ramona Martinez represented Wal-Mart, said that the plaintiffs’ initial argument centered on federal regulations for gun sales. The plaintiffs argued that under the regulations, the gunman wasn’t eligible to purchase a firearm because there was an indictment pending against him for aggravated sexual child abuse. Cobb said that this wasn’t aggressively pursued because, at the time of the sale, stores were not required to perform background checks on gun purchasers. Buyers were only required to fill out a form asking certain questions. Cobb said that “the theory faded away” because the gunman didn’t reveal that he had been indicted even though the forms he filled out requested that information, and therefore, there was “no practical way for Wal-Mart to know he had an indictment” pending against him. At trial, the plaintiffs argued that “if a buyer presented himself at a counter to buy a gun and appeared mentally imbalanced, there is a common law duty of reasonable care to not sell him a weapon.” The plaintiffs presented evidence intending to show that the gunman was mentally imbalanced and “that manifested itself at the time he purchased the gun.” The plaintiffs did this by demonstrating the gunman was diagnosed with paranoid personality disorder two years before the shooting. The plaintiffs also argued that Wal-Mart, which sells a lot of firearms, had a duty to train its employees on how to conduct mental health triage, by asking a prospective gun buyer questions designed to “evoke” signs of mental problems, in addition to inquiring about the intended uses of the gun. Wal-Mart countered by arguing that its policies were “prudent”, that its sales staff complied with federal regulations on gun sales and that the requirements the plaintiff sought to impose on sporting goods stores for mental health screening were too extensive. Wal-Mart used some problems with the plaintiffs’ argument to its advantage. Wal-Mart’s attorneys stated that the principal problem with the plaintiffs’ case was that they had no witness who had seen or talked to the gunman in a mentally unstable state from January 1990, when he was diagnosed, until after the murders. Wal-Mart also argued that the gun sale wasn’t a but-for cause of the shooting- that it would have occurred regardless of where the gunman bought the gun. The plaintiffs agreed that this was one of their biggest stumbling blocks. The plaintiffs’ tough part from beginning to end was the fact that the gun was purchased 60 days prior to the shooting, and that the jurors felt like if the gunman had bought it somewhere else in the intervening time, it still would have happened. Another issue working against the plaintiffs was the location of the incident. “In Ft. Worth, Texas, it would be tough to have a different outcome with a jury, because attitudes about purchasing and availability of guns make it tough, and I don’t think the average juror in this area is going to believe Wal-Mart could have prevented the shooting,” according to Jenks Garrett, plaintiffs’ attorney. One of the main reasons that Wal-Mart prevailed so quickly was the credibility of its witnesses. The plaintiffs had used their principal witness, Peter Scharf, an expert in training police officers, to explain the kinds of questions Wal-Mart employees could have and should have asked prospective gun purchasers to see if they evoked certain symptoms. However, the Wal-Mart employee who sold the gun, testified that the gunman acted normal, and that she had seen him shopping in the store before and never noticed anything out of the ordinary. Wal-Mart also called as a witness, the gunman’s psychologist, who testified that he wasn’t able to diagnose the gunman with any mental condition until after eight or nine 50 minute therapy sessions. Wal-Mart was then able to suggest to the jury that if a trained doctor could not detect the gunman’s condition after weeks of therapy, how could a Wal-Mart store clerk be expected to do better? Wal-Mart successfully argued that it did everything the law required to keep handguns away from dangerous people. Marshall v. Wal-Mart Super Centers, Inc., 236th District Court, Tarrant (TX) County, Case No. 236-154399-94. Art Brender and Jason C.N. Smith of Law Office of Art Brender, Fort Worth, TX, for the Marshall family, and Jenks Garrett, Arlington TX, for Judge Clyde Ashworth. Bill Cobb and Ramona Martinez of Cowles & Thompson, Dallas, TX, for Wal-Mart.

Court Overturns $11 Million Judgment Against Wal-Mart — Arkansas. A federal appeals court on June 5, 2002 reversed a decision that said Wal-Mart and its insurance company had to cover part of an $11 million settlement in a product liability lawsuit involving halogen lamps. Cheyenne, distributor of halogen lamps, held two insurance policies for product liability - a $1 million policy from St. Paul and a $10 million policy from RLI. Wal-Mart carried policies from both companies and also had its own insurer, National Union, with a $10 million limit. In their contract, Cheyenne agreed to indemnify Wal-Mart from any liability resulting from the sale of halogen lamps. Wal-Mart also required Cheyenne to show proof of at least $2 million in liability insurance. After a California girl suffered burns in an accident, Cheyenne agreed to an $11 million settlement with her family. St. Paul paid $1 million; RLI covered the remaining $10 million but retained the right to seek recovery from Wal-Mart and National Union. An Arkansas federal judge ruled that National Union should be tapped second instead of RLI. Wal-Mart said that Cheyenne and its two insurers should be solely responsible for the settlement. If the case was decided any other way, the court said, it could begin a circle of litigation that would end with RLI paying the settlement anyway: If Wal-Mart paid the money, it could sue Cheyenne to enforce the indemnity provisions of its contract. Wal-Mart would win and Cheyenne would look to RLI to cover the loss because its RLI policy covers contractual indemnity liability. If National Union paid, it would sue Cheyenne asserting Wal-Mart’s indemnity right under the Cheyenne-Wal-Mart-contract. National Union would win, and Cheyenne would ask RLI to cover the loss.

County Faces $5 Million Wal-Mart Lawsuit — Florida. Wal-Mart is seeking more than $5 million in damages from Manatee County, claiming its customer service was hindered when the county took over part of Wal-Mart’s land last year for road improvements. The area suffers from backed up traffic, poor drainage and other problems due to rapid growth in East Manatee County. Wal-Mart’s attorney, Jim Helinger, said that Wal-Mart would prefer to see the county alter its road work plans that Wal-Mart said will wipe out its garden center. Manatee County officials deny Wal-Mart’s business suffered enough to justify a $5million claim, although officials from the county and Wal-Mart plan to negotiate alternatives during the next several months. Helinger said that Wal-Mart has an alternative design for the county that spares its garden center, but gives up some parking. Manatee offered Wal-Mart $75,000 to settle its business damage claims after it paid Wal-Mart about that much when it acquired 7,094 square feet of Wal-Mart’s land through eminent domain proceedings. Walgreen and Hallmark, also in the shopping complex, filed business damage claims against the county. Florida statutes grant government power to condemn and take control of private land for public use if negotiations held in “good faith” with the property owner fail.

Wal-Mart Seeks Approval To Buy A Bank — California. Wal-Mart is seeking regulatory approval to buy Franklin Bank of California in Orange, California saying it hopes a banking license will lower its processing costs for certain improvements. By acquiring a bank, Wal-Mart could offer a range of financial services: savings accounts and certificates of deposit as well as home equity loans or auto financing. But Wal-Mart said it had more modest plans for the acquisition, which is largely motivated by its frustration with the high cost of processing its customers’ debit card purchases. Wal-Mart has leased space in many stores to banks as a customer convenience and has a program that allows Chase Manhattan, a unit of J.P. Morgan Chase, to issue a credit card with the Wal-Mart name on it. The Franklin bank as something else that is valuable to Wal-Mart: an industrial bank charter. That charter is one of the few ways a company not primarily involved in banking or financial services is allowed under federal law to own a bank. If Wal-Mart owns a bank, it can have access to the system that arranges for debit card transactions to be deducted from a customer’s checking account. Only banks have such access. This is Wal-Mart’s third attempt to get into the banking business in as many years.

March 2002

Wal-Mart Stats As Of February 28, 2002. Wal-Mart had 1640 Wal-Mart stores, 1077 Supercenters, 501 Sam’s Clubs and 31 Neighborhood Markets in the United States. Internationally, Wal-Mart operated 11 units in Argentina, 22 in Brazil, 196 in Canada, 19 in China, 95 in Germany, 9 in Korea, 555 in Mexico, 17 in Puerto Rico and 251 in the United Kingdom. Wal-Mart employs more than 1 million associates in the United States.

Fortune 500 Has A New No. 1: Wal-Mart Stores — New York. Wal-Mart Stores, Inc. is now the largest company in the nation and the world, capturing the top spot on the annual Fortune 500 list. Wal-Mart, No. 2 on the list a year ago, traded places with Exxon Mobil Corp. in the rankings compiled on the basis of companies’ annual revenue figures. Wal-Mart became the first service company to lead the 500 which until 1995 was restricted to manufacturing concerns. Since its founding 40 years ago, Wal-Mart has seen its annual sales surge, going from $1 billion in sales for all of 1979 to sometimes making that much in a single day last year. Wal-Mart had $219.81 billion in revenues and had the most employees with more than 1.2 million worldwide.

Wal-Mart To Pay In Bias Settlement — Virginia. The Equal Employment Opportunity Commission announced that Wal-Mart has agreed to pay $140,000 and to provide its management with training on anti-discriminatory hiring practices in the store’s settlement of a retaliation lawsuit. The EEOC had alleged that Wal-Mart removed Kimberly Zink’s hiring authority from its Midlothian store in suburban Richmond and essentially demoted her because she complained about hiring instructions that she believed were racially discriminatory. Wal-Mart encouraged Ms. Zink to hire a work force that reflects its surrounding community and pointed to the disparity between the predominantly black cashiers at the store and the predominantly white clientele, according to the suit. Wal-Mart agreed to pay Ms. Zink $105,000 and donate a total of $35,000 to three community organizations: The Virginia office of the NAACP, the Urban League of Greater Richmond and the Virginia Regional Minority Supplier Development Council. The groups are to use the money to support their programs supporting equal opportunity and diversity in the workplace, the EEOC said.

Wal-Mart Wins Injunction To Keep Union Organizers Out of Stores — Arkansas. Wal-Mart Stores Inc. has won a court injunction to keep union organizers out of its 3,200 stores, and Wal-Mart officials hope the union will abide by the order. A permanent injunction was issued March 15 by Chancery Judge Jim D. Spears. The judge’s order prohibits the union from soliciting inside Wal-Mart buildings in the United States, including Supercenters, Sam’s Clubs and Neighborhood Markets. Violators can be held in contempt of court. Wal-Mart spokeswoman, Jessica Moser, said that Wal-Mart employees have asked the company repeatedly since 1999, when the union activity began, to stop members of the United Food and Commercial Workers International Union from “harassing them.” Union organizers can still legally solicit in store parking lots, as other groups can, Moser said.

Supreme Court Orders New Trial For Woman In Rape/Abduction Lawsuit Against Wal-Mart — West Virginia. A woman who was abducted in 1994 outside a Wal-Mart store in Beckley, West Virginia will get a new trial in her lawsuit claiming that Wal-Mart did not adequately protect her the state Supreme Court ruled December 7, 2001. The court ordered the new trial for the woman because one of the potential members of a Raleigh County jury that ruled in favor of Wal-Mart in 1998 had ties to Wal-Mart. The woman sued Wal-Mart for $10 million, saying the store did not prevent her abduction from the Beckley Crossing parking lot on February 23, 1994. A circuit judge originally dismissed the case, but the West Virginia Supreme Court ruled a jury should decide the issue. That jury ruled in favor of Wal-Mart. BC Associates, which leased the building to Wal-Mart, settled before the trial for an undisclosed amount. The court said that Wal-Mart should not have been allowed to pin the incident on BC Associates in its closing arguments. The court ruled that the woman should have access to data showing how many sexual assaults were reported at Wal-Mart stores within a geographic area. The court also found that the woman can present extra testimony from an expert witness and a letter from a Wal-Mart executive stating that many store crimes happen in the parking lots.

Wal-Mart Fights Liability In Carjacking — Louisiana. A dispute over how liable the Leesville, Louisiana Wal-Mart is for a carjacking in its parking lot is probably headed for an appeals court. In February, 2002, a Vernon Parish jury found Wal-Mart to be about 15 percent at fault, according to Leesville attorney Elvin Fontenot. The jury concluded that the two defendants who committed the crime should bear the rest of the burden for the $100,000 judgment. However, attorney Elvin Fontenot is seeking to make Wal-Mart pay the entire judgment. Wal-Mart doesn’t want to pay any of it. According to Fontenot, courts have ruled parties held partially responsible can be made to pay the entire cost of judgment when the other parties are unable to pay. The other defendants in the lawsuit — the two people who committed the crime — are unlikely to pay anything. One defendant is an adult now serving a lengthy prison sentence, while the other one is a juvenile. Wal-Mart is expected to appeal the verdict, maintaining that it should not be held partially liable much less wholly liable for the actions of carjackers.

Mother Files Lawsuit Against Wal-Mart Alleging Daughter Was Fondled By Store Employee — South Carolina. A Fairfield County, Columbia, S.C. mother has filed a lawsuit against a former Wal-Mart employee and the Wal-Mart Corporation alleging the employee fondled her then-10-year-old daughter. The lawsuit, filed in November, 2001, claims Wal-Mart should have known that the employee was a convicted sex offender and listed on the state’s sex offender registry. When the woman and her daughter returned to report the September 25, 2000, alleged assault, Wal-Mart gave the mother a $25.00 gift certificate to forget the whole incident. “What kind of message is that to send to a child that something this terrible could be forgotten with a $25 gift certificate?” said David Massey, an attorney for the girl and her mother.

Wal-Mart Wants A Tax Cut — Florida State Supreme Court Hears Case. On March 5, 2002, after four years and more than a dozen lawsuits against state property appraisers, one of Wal-Mart’s cases finally worked its way to the Florida Supreme Court. Justices heard arguments on a seemingly small, but pivotal, portion of Wal-Mart’s case against Hernando County Property Appraiser, Alvin Mazourek. Wal-Mart’s attorneys argued that the sales taxes it pays to buy its store equipment should not be included in its value for tax purposes. Attorneys for Mazourek, who is supported by a number of other property appraisers, argued that sales tax is a cost of purchasing equipment and should be included in the assessment process. If the Supreme Court agrees with Wal-Mart, property appraisers across Florida would have to reduce the value of tangible property — everything from shelving to computers — of all businesses. They also would have to refund Wal-Mart, and other retailers who sued in its wake, for taxes paid on the sales tax during the past few years. No one seems to have come up with a total dollar value of the impact. If Wal-Mart wins, homeowners ultimately could see higher property tax bills. Counties, faced with lower revenues, could decide to raise tax rates across the board to make up for the loss. And that doesn’t include the cost to taxpayers for defending the lawsuits. Wal-Mart began challenging property appraisers’ tangible property assessments in 1997.

Former Wal-Mart Employees File Suit for Working Overtime Without Pay — Oklahoma. Two former Wal-Mart employees on behalf of workers in 85 Oklahoma Wal-Mart stores filed suit against the retail giant for allegedly forcing workers to work extra hours without pay. Named in the suit were Wal-Mart, Sam’s Club and its managers. The employees contend that they were required “on multiple occasions” to work off-the-clock and overtime and were never paid for the work. In their 27-page petition, the employees claim that they were not given rest or meal breaks and were not compensated for the missed breaks. They allege that what happened to them routinely happened to hourly employees of Wal-Mart. The lawsuit accuses Wal-Mart of engaging in a systematic and “clandestine scheme” of failing to properly pay employees “in violation of Oklahoma law.”According to the lawsuit, employees are given work assignments that Wal-Mart knows can’t be completed within regularly scheduled hours. Wal-Mart then pressures employees to complete the work assignments “through intimidation, threats of discharge and demotion,” the lawsuit says. Employees have to work after clocking out at the end of their shifts, before clocking in at the beginning of their shifts and during meal and rest breaks, according to the complaint. The lawsuit says a 48-page employee handbook contains “definite and specific terms” concerning Wal-Mart’s policies with respect to compensating hourly employees, but that Wal-Mart fails to follow its personnel policies. The lawsuit seeks direct, punitive and special damages of an unspecified amount to compensate all Oklahoma employees who have been subjected to what it terms “unfair business practices.” Diana Bell and Jennifer Heilman vs. Wal-Mart Stores, Inc., et al, District Court, Cleveland (OK) County, Case No.____

Wal-Mart Dips $46 Million Toe Into Vast Japanese Economy — Japan. On March 14, 2002, Wal-Mart announced that it would make its first foray into the $3.9 trillion Japanese economy by buying a minority interest in a Japanese retailer, Seiyu Ltd. Mass-market retailing in Japan has not traditionally been hospitable to foreign players, but the domestic industry has been racked by several prominent bankruptcies and hundreds of store closings in recent years as prices fell and Japanese consumers became increasingly reluctant to spend. The new investment for Wal-Mart will begin as just a toe-hold. Wal-Mart will spend about six billion yen ($46.5 million) to acquire 6.1 percent of Seiyu, Japan’s fifth-largest supermarket chain, with 1.1 trillion yen ($8.5 billion) in sales. But Wal-Mart could ultimately raise its stake to 66.7 percent with the options it will get to buy up to 260 billion yen worth of additional shares in Seiyu by 2007. Wal-Mart and Seiyu said that they would work jointly on sales and procurement strategies. Eventually, Wal-Mart is expected to open some larger Wal-Mart-style stores in Japan. Other foreign retailers, like Toys “R” us, Costco, Carrefour of France and Boots of Britain, have tried to penetrate Japan by opening their own stores but have made little headway. Analysts said today that Wal-mart’s ease-in approach might be more appropriate in Japan, where serpentine wholesale and distribution networks are hard for outsiders to navigate. Wal-Mart already operates 1,175 stores in nine countries abroad, including China. Last year, Wal-Mart posted $32.5 billion in sales overseas, 16.3 percent of its total sales. In four countries - Britain, Canada, Germany and South Korea - Wal-Mart bought local chains rather than build from scratch.

Trial Date Set For Lawsuit Against Helen Walton — Arkansas. Benton County judge, Tom Keith, has set a May 13, 2002 trial date for the lawsuit by truck driver Jerry Otis against Wal-Mart heiress Helen Walton. The lawsuit stems from a February 19, 1999 accident in which Helen Walton ran a red light and hit the dump truck driven by Jerry Otis, according to court documents. The suit originally sought punitive and compensatory damages, but Judge Keith granted a motion for partial summary judgment, which prohibited punitive damages. Judge Keith also granted a motion for sanctions against Dan Ivy, Otis’ attorney, for violating a professional conduct rule by not investigating to determine if certain claims in Otis’ lawsuit were true. Judge Keith ordered Attorney Ivy to pay $12,085 to Helen Walton’s attorney, David Matthews. Attorney Ivy told Judge Keith that he would not pay the fine; he would report to jail.

Arkansas Supreme Court Reverses $50 Million Judgment Against Wal-Mart — Arkansas. On February 14, 2002, The Arkansas Supreme Court reversed a $50 million decision against Wal-Mart tossing out a jury’s finding that Wal-Mart stole trade secrets from P.O. Market Inc., a Texas company, and its chief executive, Joe O’Banion. P.O. Market and O’Banion had claimed that Wal-Mart acted wrongfully after the two companies tried but failed to develop a credit system for Sam’s Club in the 1990s. In March 2000, a jury awarded O’Banion and his associates $31.7 million — plus seven years’ interest that raised the judgment to $50 million. The Supreme Court said the jury was wrong; “the evidence supporting the jury’s verdict on this point was insufficient.” Sam’s Club eventually developed a credit system called Sam’s Direct — as a collaboration between Wal-Mart and General Electric Capital Corporation. O’Banion argued in court that the set-up was too similar to the one he proposed to Wal-Mart.

NLRB Settles Suit Against Wal-Mart — Workers Get Back Pay — No Admission Of Guilt From Wal-Mart — Texas. A National Labor Relations Board administrative hearing was held December 17, 2001 in Tyler, Texas in a case representing four deposed employees of the Jacksonville, Texas Wal-Mart store. Although an agreement gave the employees their back pay, Wal-Mart refused to admit any wrongdoing opting instead for a “non-admissions clause.” A stipulation in the settlement, which Wal-Mart Spokesperson Jessica Moser said is in “no way” an admission of wrongdoing, requires Wal-Mart to post a notice to employees. The posting, according to court records, “will set forth that Wal-Mart will not engage in certain activities that are alleged in the complaint as unfair labor practices.” Included in the “unfair labor practices” were: promising employees benefits, while also threatening employees with frozen wages, to influence their votes in an election to form a union; creating an impression that their union activities were under surveillance; threatening employees with discharge; later discharging one employee; also discharging two other employees due to union involvement. Wal-Mart insists that all four deposed employees in the case waive their rights to reinstatement according to the settlement. All four employees chose to accept the settlement amounts offered.

Pharmacists Must Warn Customers About Allergies — Ruling By Illinois Supreme Court - Lawsuit Against Wal-Mart To Proceed. On March 21, 2002, the Illinois Supreme Court ruled that pharmacists have a legal duty to warn customers about the possible dangers of their medicines, allowing a lawsuit to proceed against a Wal-Mart in McHenry, Illinois. In 1993, the female plaintiff’s physician prescribed the painkiller Toradol. The Wal-Mart pharmacist filled the prescription despite a computer warning that Toradol was dangerous for people with the plaintiff’s allergies. The plaintiff is allergic to aspirin, ibuprofen and acetaminophen — information that was included in Wal-Mart’s computer system. The plaintiff took Toradol and went into shock. The plaintiff says that the incident worsened her multiple sclerosis and left her suffering seizures and asthma attacks. Wal-Mart argued that it was the physician’s duty, not the pharmacy’s, to warn patients regarding the possible dangers of their medicines. The Illinois Supreme Court disagreed, finding that when pharmacies collect such information, customers get the impression of greater safety, so pharmacies then must follow through by using the information. Heidi Happel vs. Wal-Mart Stores, Inc., Kenneth Chessick, Attorney, for plaintiff.

Wal-Mart Seeking $18 Million Subsidy To Defray Cost of Building Its First Store In City — Chicago. Wal-Mart is demanding an $18 million public subsidy for its proposed store on the Near South Side of Chicago. Wal-Mart’s first store within Chicago would anchor a retail development proposed for 6.6 acres running northeast from Roosevelt and Canal streets. Wal-Mart and a developer want the subsidy to defray costs of building a two-level store plus a parking garage on a site other retailers have rejected because of its high costs. Wal-Mart’s project has drawn opposition from community groups who have contended that it would exacerbate traffic and subtract customers from smaller retailers nearby. They, (Wal-Mart) make a gazillion dollars every year and we’re supposed to pay them for the privilege of messing up our neighborhood?” said Barbara Lynne, executive director of the Near South Planning Board, a community group. Chicago city officials agree that some level of city assistance is appropriate because the site is below grade and requires an extra-cost design to allow the store to be visible from the street. City officials said that the parcel has little infrastructure because it has never been developed. Last year, Home Depot dropped plans to build there and other development groups have taken a pass on the location. Despite the obstacles, retailers are still drawn to the site because it is rare open land in an area alive with residential growth.

Senator Criticizes Proposed Location of Super Wal-Mart — Louisiana. State Senator Louis Lambert, Democrat, Prairieville, Louisiana, said that building a Super Wal-Mart at Airline Highway and Old Perkins Road in Ascension Parish would create horrendous traffic problems. Senator Lambert backed his contention with a state-sponsored traffic study he presented to a meeting of representatives from 10 Prairieville subdivisions who are opposed to Wal-Mart’s plans to locate at that site. On a scale of A to F, the corner of Airline and Old Perkins was graded F more than two and a half years ago, Patrick Broderick, a C-K engineer, said. An F means that it takes more than one cycle to get through a traffic light, he said. A traffic study by Wal-Mart predicts that 17,000 cars a day would visit the store. A leader in the opposition to Wal-Mart, Lisa Lusco, said Wal-Mart’s contention that it selected the site to serve the local community means that almost all of the 18,000 residents of Prairieville would have to be at the store every day. Wal-Mart has proposed to make changes on Old Perkins and Airline to facilitate traffic flow into its location, “but those improvements cause more problems than they solve,” Lusco said.

Sales Representatives Lack Standing To Sustain Wal-Mart Suit — New York. A group of manufacturers’ representatives, formed after Wal-Mart adopted a “no-broker” policy and started dealing directly with manufacturers, had no standing to bring a tortious interference suit against Wal-Mart where the individual representatives’ participation was necessary for choice of law and due process purposes, the 5th U.S. Circuit Court of appeals ruled on March 1, 2002. Although the group claimed that Wal-Mart tortiously interfered with the representatives’ contractual relationships with manufacturers, the group refused to identify its members or produce the specific contracts that Wal-Mart was allegedly interfering with. A trial court dismissed the action for lack of standing. Affirming, the 5th Circuit rejected the proposition that individual member participation was less likely to be required if the association was seeking only injunctive relief. “We see no way to resolve such fact-specific tort claims without participation of the individual members of the association,” the court said.

Enriched By Working Class, Wal-Mart Eyes the BMW Crowd — New York. Wal-Mart, which grew by appealing to cost-conscious consumers, is reaching out to more affluent shoppers. After leveling discount chains from Kmart to Caldor, Ames to Bradlee’s, Wal-Mart executives are setting their sights on a fresh target: more affluent shoppers who pride themselves on snagging bargains and who discovered stores like Target, Costco and Kohl’s some time ago. Many of the 178 stores Wal-Mart opened in the last year are in well-off suburbs like Plano, Texas and Alpharetta, Georgia. However, reaching for new customers holds risks for Wal-Mart. As it adds pricier products, Wal-Mart may run the risk of alienating its millions of working-class Americans. Some of Wal-Mart’s efforts to stock its shelves with upscale goods have irritated manufacturers. Wal-Mart paid $6.4 million in 1999 to settle a lawsuit from Tommy Hilfiger over counterfeit clothing sold in some of its stores, and an additional $1.4 million to settle a similar claim from the makers of Polo, Fubu and Nautica last year. In October, 2001, Fubu sued Wal-Mart again contending that a line of store-brand clothes with an “05" printed on them violated a Fubu trademark for an identical logo. That case is pending. In its supermarkets, Wal-Mart has found it fairly simple to improve its selection, selling Godiva chocolate raspberry truffle ice cream along with the Sam’s Choice store brand. The trick for Wal-Mart will be to transfer the success it has had in broadening its grocery array to apparel, housewares and other categories inside its mammoth stores.

Wal-Mart Bid For Alcohol Permit Criticized — Arkansas. A plan by Wal-Mart to sell alcohol at its new Mountain Home, Arkansas Supercenter is drawing fire from the mayor and at least one church. Opponents say that alcohol sales do not jibe with Wal-Mart’s family-oriented image. Mountain Home Mayor Joe Dillard said that he strongly opposes Wal-Mart’s application for a state permit to sell beer and Arkansas wine at its grocery store section. The Arkansas Alcohol Beverage Control Board voted in August, 2001 to allow grocery and convenience stores to sell wine produced in Arkansas. There are several liquor stores in Mountain Home which is the county seat of “wet” Baxter County. While many county convenience stores sell beer, none of the major grocery stores in the county sell alcohol. A spokesman for Wal-Mart said that a demographic research shows local residents want alcohol available at the Supercenter. Arkansas Alcohol Beverage Control Administration Director Robert Moore said that he will deny the permit if the mayor opposes it. Another group of Mountain Home residents, the elders of the 550-member College and North Street Church of Christ, also oppose the alcohol permit. The church elders believe selling alcohol conflicts with Wal-Mart’s corporate image: where the family goes shopping. Church elders also say that selling beer and Arkansas wine at the Supercenter places every shopper in the position of supporting the alcohol beverage industry, whether they want to or not.

Failure to Maintain and Repair Dock Plate/Dock Leveler At Tennessee Wal-Mart Blamed for Injuries — Original Complaint Filed in Kentucky — Transferred to Nashville — Wal-Mart Files Cross-Complaint. On November 7, 1998, male plaintiff was a business invitee at the South Jefferson Avenue Wal-Mart in Cookeville, Tennessee. The plaintiff claims to have been injured by the dock plate/dock leveler through the fault of defendants Wal-Mart, Town & Country Overhead Doors, Inc., and Serco Corporation. The plaintiff contends that defendant Town & Country failed to properly maintain and repair the dock leveler and allowed it to be in a dangerous condition. In addition to the plaintiff’s complaint, defendant Wal-Mart has filed a cross-complaint against Town & Country asserting that it was guilty of negligence. Underwriters Safety & Claims, Inc., the worker’s compensation carrier for the plaintiffs employer, has filed an Intervening Complaint asserting the fault of defendant Town & Country. Town and Country claims that it did not manufacture or sell the dock plate/dock leveler which the plaintiff contends caused his injuries. According to Town and Country, at no time on or before November 7, 1998 did Town & Country have any contract to inspect or repair the dock plate/dock leveler which the plaintiff asserts caused his injuries. The plaintiff claims medical expenses, lost wages, loss of enjoyment of life, permanent injury, pain and suffering. Town & Country has moved for summary judgment; the plaintiff has filed a motion in opposition to summary judgment. Joseph Wonder vs. Wal-Mart Stores, Inc., Town & Country Overhead Doors, Inc., and Serco Corporation, U.S. District Court, Middle District, Nashville, Case No. 01-CV-2. Kurtis J. Winstead of Colbert & Winstead, Nashville and Brentley Parker Smith of Sampson, Smith & Slechter, Louisville, KY, for plaintiff.

Slip and Fall On Dock Plate Blamed for Tear of Quadriceps Muscle and a Torn Medial Collateral Ligament both at Right Knee — Original Complaint Filed in New Jersey State Court — Transferred to New Jersey Federal Court then to Middle District of Tennessee, Nashville — $109,688.96 Tennessee Verdict — Includes 40% Comparative Fault. On March 5, 1997, male plaintiff, an over-the-road truck driver, had a shipment to drop at the old Wal-Mart store located at 1031 West Main Street in Lebanon, Tennessee. The plaintiff claims that a dock plate was between the trailer and the dock to serve as a bridge between them. The plaintiff contends that the dock plate shifted while he was on it, causing him to jump to the dock where he slipped and fell. The plaintiff claims that he sustained the following injuries: a “complete rupture” of the right quadriceps tendon and required surgical repair. Surgery revealed that the plaintiff also had a blood clot in his right thigh that required removal and treatment. The surgery also revealed that the plaintiff had a partial tear of the anterior fibers of the medial collateral ligament in the right thigh. The surgery to repair these injuries left the plaintiff with a sixteen-inch scar on his right leg. The plaintiff’s leg was in a brace for some time following the surgery and required physical therapy. Due to the injuries, the plaintiff contends that he was unable to work for 20-21 weeks. At the time of the plaintiff’s accident, he was employed with Gemini Traffic Sales, Inc., a New Jersey Corporation and was a resident domiciled in the State of New Jersey. On February 19, 1999, the plaintiff filed suit against Wal-Mart in New Jersey Superior Court, alleging that Wal-Mart was negligent. On March 29, 1999, the case was removed to the United States District Court for New Jersey by Wal-Mart on the basis of diversity of citizenship. Wal-Mart filed a motion to transfer venue from the New Jersey Federal Court to the District Court of Tennessee. In response, the plaintiff filed no opposition, but instead filed a cross motion to remand the action to the Superior Court of New Jersey, Law Division. On June 15, 1999, the Court ordered the case transferred to the District Court of Middle Tennessee based on (1) the accident occurred in Tennessee; (2) the treating doctors are in Tennessee; and (3) any witnesses to the alleged accident are also located in Tennessee. The case has no connection to New Jersey except that the plaintiff resides in New Jersey and Wal-Mart operates several stores in New Jersey. The plaintiff’s motion to remand the case to the New Jersey Superior Court was denied. The plaintiff filed a workers’ compensation claim against his employer in the Division of Workers’ Compensation of New Jersey. Wal-Mart moved for summary judgment, however, it was denied on May 17, 2000. Wal-Mart filed for an Exception to the Clerk’s Notice of Taxation of Costs to Wal-Mart. The court overruled the exceptions, and the taxation of costs to Wal-Mart in the amount of $2,315.03 was affirmed. On September 5, 2001, the jury returned a verdict for the plaintiff finding the plaintiff 40% at fault and Wal-Mart 60% at fault with a net verdict of $31,688.40. Two days later, the plaintiff filed a motion for a new trial on the issue of non-economic damages. The plaintiff argues that the damages awarded were inadequate to compensate him for his injury because the only reasonable interpretation of the jury’s verdict is that it does not include any damages for pain and suffering or for loss of enjoyment of life. The plaintiff’s motion for a new trial on all damages was granted on November 13, 2001. Then on March 8, 2002, the jury found for the plaintiff $34,688.96 in economic damages and $75,000 in non-economic damages using the comparative fault of 40%. U.S. District Court, Middle District of Tennessee, Case No. 3:99-0468, David Gelband, Esquire of Kirsch, Gelband & Stone, Neward, NJ, David O. Huff, Esquire, Nashville, TN, for plaintiff. Tracy Shaw and Andy Rowlett, of Howell & Fisher, for Wal-Mart.

The 2001 Wal-Mart Report — Kentucky’s Year in Review. For unknown reasons, Wal-Mart continues to enjoy a very special place in the history of Kentucky litigation. The Kentucky Trail Court Review for 2001 reported 22 Wal-Mart cases of which plaintiffs prevailed in twelve for a win percentage of 54.5% The aggregate of the twelve plaintiff’s verdicts totaled $615,057. The plaintiff’s average and the average verdict, were respectively, $51,254 and $27,957. There were 22 cases in 2001, 21 cases in 2000, 26 in1999 and 29 cases in 1998. While Wal-Mart faced the indignity of 22 trials, which other retailers faced that same litigation explosion in slip and fall/premises liability cases? The names of the other retailers who only faced one trail in 2001 are K-Mart, McDonald’s, Piggly Wiggly, Shoney’s, Food Lion, Burger King, PicPac, Dennys, and Sav-A- Lot. Every one of those nine companies conducted business at multiple locations in Kentucky last year, yet in every instance, its likelihood of going to trial on an injury claim was twenty two times less than Wal-Mart. Of the 22 cases in 2001 fourteen were slip and fall, seven involved premises liability, while one other was founded in false imprisonment. The most accommodating venue for these Wal-Mart cases in 2001 was shared by two Kentucky counties ----- Jefferson and Bell, both hosting three cases. The source of the 14 falls included a cookie, lysol, liquid soap, and buffing fluid that leaked under a rope. Moving outside the store, there were only two oily spots in the parking lot and one icy spot. Also, customers fell over items including shelving, colored pencils, a handicap ramp and a Christmas tree. Wal-Mart items falling on customers included a sled, a cassette player shelf and a box of Charmin. From 1998 to 2001, Kentucky has had 94 Wal-Mart cases with a win percentage of 55.3% and with the plaintiff’s average award amounting to $43,979.

December 2001

Wal-Mart Agrees to Pay $427, 500 Fine and to Broadcast Bias Claims of Deaf Men in Ads Resolving a Contempt of Court Ruling — Arizona. U.S. District Judge William Browning approved an amended consent decree in September, 2001 in which Wal-Mart agreed to pay $427,500 to the Arizona Center for Disability Law for violating its promise to the federal court to stop discriminating against deaf applicants and workers. The Arizona Center for Disability Law will use the settlement funds for statewide legal advocacy, job development, job coaching, sign interpreter services for the disabled and monitoring the compliance agreement. This settlement payment is less than the $750,000 fine that Judge Browning imposed in June, 2001 after first concluding that Wal-Mart was in contempt of court. Wal-Mart had challenged that order, but had agreed to the lower figure. The amended consent decree also requires Wal-Mart to air television commercials in Arizona in which two men will describe their claims that Wal-Mart refused to hire them because they are deaf. The commercial will run on NBC, CBS and ABC for two weeks appearing at morning or evening prime time in the Tucson and Phoenix areas. Aside from telling how they believe they were the victims of discrimination, the two deaf men will tell how federal law protects deaf people and others against discrimination. It also includes phone numbers that people can call - including those using TTY devices for the hearing impaired - to complain about discrimination. The two deaf men will be paid for their roles in the TV commercial and for helping to train Wal-Mart managers in working with deaf people. Wal-Mart will produce, film and air the commercials. In addition, Wal-Mart is required to make changes in employment practices and policies to prevent future discrimination. This includes providing “reasonable accommodations” to disabled applicants and employees, and conducting extensive management training on disability discrimination at 23 Wal-Mart stores in Tucson, Phoenix and Green Valley. Wal-Mart also agreed to offer to rehire one of the deaf men who quit after he said that store employees didn’t provide interpreters or follow other terms of the consent decree. Wal-Mart also agreed to hire at least five other qualified deaf people in Arizona. Bill Wertz, Wal-Mart spokesman, stated that “the steps outlined in the agreement will not only help the hearing-impaired, but ©willª reinforce what we believe are already strong programs in place.” Mary Jo O’Neill, supervisory trial attorney for the EEOC, said that her agency still has 13 active cases nationally against Wal-Mart dealing with violations of the Americans With Disability Act. See earlier story, “Wal-Mart fined $750,000 for Violating ADA Rights of Deaf Applicants”

Worker Sues Wal-Mart Over Health Plan — Cost of Contraceptives Not Covered — Class Action Status Sought — Georgia. A Wal-Mart customer service manager, age 22, a divorced mother of two, has filed a complaint against Wal-Mart alleging discrimination against female workers by excluding contraceptive coverage from its health insurance plan. The complaint seeks reimbursement for all employees who paid for their own prescription contraceptives during the past 2 years. The plaintiff, of Dallas, Georgia, sued Wal-Mart, where she has worked since 1996, after she discovered that Wal-Mart’s health plan excluded coverage for prescription contraceptives, according to the complaint. As a result, the plaintiff claims that she pays nearly $30 per month for birth control pills. The plaintiff, who earns about $12 an hour, has been eligible for employee health insurance since she started working full-time in March, 2000. The suit contends that contraceptives are no different than other “preventative” drugs or devices. The plaintiff also claims that Wal-Mart is violating federal regulations issued December, 2000 by the EEOC which state that employers risk violating Title VII of the Civil Rights Act of 1964 if they fail to cover contraceptives but pay for other prescription drugs. The suit seeks class action status. Wal-Mart has nearly a million employees nationwide, according to the National Women’s Law Center in Washington, D.C., which is of counsel in the case. Wal-Mart corporate spokesman, Bill Wertz, acknowledges that Wal-Mart’s health plan doesn’t cover the cost of prescription contraceptives. But, he says, “Basically, we believe that our plan is fair to both men and women and complies with the law.” Mauldin v. Wal-Mart, U.S. District Court, Northern District, Georgia, Case No. 1:01-cv-2755. Janine L. Pollack and Kirk E. Chapman of Milberg, Weiss, Bershad, Hynes & Lerach, New York; Sigmund Wissnerr-Gross of Heller, Horowitz & Feit, New York; and George A. Stein, Atlanta, GA, for plaintiff. The Wal-Mart Litigation Project does not encourage class-action lawsuits; we simply gather information about lawsuits.

Wal-Mart Ordered to Pay $13M — Malicious Prosecution Verdict Hinges on Tape —Texas. A South Texas jury has ruled that Wal-Mart must pay $13 million to the family of a woman falsely accused of shoplifting. Female plaintiff, mother, age 31, of Starr County, was arrested in 1994 and charged as part of the Mickey Mouse Gang, a group of professional shoplifters that had plagued Wal-Mart and other “big-box” retail stores in Houston and surrounding areas. The gang was dubbed Mickey Mouse after one of the members who had big ears. The gang’s usual method was to have adults distract store employees while juveniles, who were likely to be punished less severely, stole merchandise from the store. An undercover Wal-Mart loss prevention investigator picked the plaintiff out of a police photo lineup, identifying her as one of a group of four people who had stolen merchandise from a Red Rock, Texas Wal-Mart. At the time of the theft, Wal-Mart detained two juveniles, while two adults got away. The plaintiff claimed that she was 200 miles away in her Houston home at the time of the thefts. However, the plaintiff spent almost a month in jail before she was able to post bond. She then spent another three months on home probation with an electronic device on her ankle before prosecutors dismissed the charges. The plaintiff sued Wal-Mart and the loss prevention investigator in 1995 in Starr County, Texas, a poor county on the Mexican border that has a reputation for high-damage verdicts. The case was later pursued by the plaintiff’s family after the plaintiff died in 2000 of complications related to scleroderma, a skin disease. During the trial, the plaintiff’s attorney called the plaintiff’s mailman who testified that he spoke with her on the day that she was supposed to have been in the Red Rock Wal-Mart. According to the plaintiff’s attorney, the loss prevention investigator testified that a Wal-Mart surveillance videotape, which he said that he turned over to police, proved that the plaintiff had been in the Red Rock Wal-Mart on the day of the shoplifting. However, the police denied ever receiving the tape, and Wal-Mart could not produce a police evidence receipt it claimed to have been given. According to court papers, Wal-Mart and the loss prevention investigator claimed that the investigator did not initiate the criminal case against the plaintiff but merely participated in the photo lineup at the request of police. “After the identification, we had no further contact with her until she filed the lawsuit,” said Bill Wertz, spokesman for Wal-Mart. The defendants also claimed that charges against the plaintiff were not dropped outright, but instead were dropped in exchange for a promise that the plaintiff would testify against other members of the gang, which the plaintiff’s attorney denied. In other words, Wal-Mart claimed, the plaintiff’s case should never have gone to a jury. “I think we have an extremely solid case on appeal,” Wertz said. The plaintiff’s attorney expects his clients will eventually collect, but not before a long appeals process. Aguilera-Sanchez v. Wal-Mart Stores Inc., U.S. District Court, Starr (TX) County, Case No. 95-61. Jim Sharp of Sharp Law Firm, Houston, TX, for plaintiffs. Jaime A. Drabek of Drabek & Associates, Harlingen, TX, for Wal-Mart.

Wal-Mart Files Motion to Drop or Move Sex Discrimination Suit to Bentonville - Arkansas. In August, 2001, Wal-Mart filed a motion in U.S. District Court in San Francisco asking the court to either dismiss or move the sex discrimination lawsuit filed against it by six women to federal court in the Western District of Arkansas. In its motion, Wal-Mart claims that the case has no merit, and that even if it did, it should be heard in the court where Wal-Mart is headquartered. A hearing on the motion was held September 25, 2001, however, no ruling has been made, according to Brad Seligman, lead attorney for the plaintiffs and president of the civil-rights group, The Impact Fund. In June, 2001, six current and former female employees of Wal-Mart filed in San Francisco a federal civil-rights suit against Wal-Mart accusing it of “purposeful discrimination” against the 700,000-plus women on its payroll. The lawsuit seeks class- action status. The first hearing on whether the lawsuit will gain class-action status is expected to be in about a year, according to the attorneys. “The Civil Rights Act establishes criteria for where a suit like this should be tried,” Wal-Mart spokesman Bill Wertz stated. “Our objective (in filing this motion) really was just to see that the law was observed, because it wasn’t (in this case).” However, the Civil Rights Act actually specifies that a discrimination plaintiff can sue “in any judicial district in the state in which the unlawful employment practice is alleged to have been committed; in the judicial district in which the employment records relevant to such practice are maintained and administered; or in the judicial district in which the aggrieved person would have worked but for the alleged unlawful employment practice but if the respondent is not found within any such district, such an action may be brought within the judicial district in which the respondent has his principle office.” Seligman has said that Wal-Mart is just trying to throw its weight around and make it harder on the women who are alleging discrimination. “Wal-Mart is saying, everyone should have to come to us,” Seligman said. “But that’s just not what the law requires. Congress (when writing this act) very clearly wanted to give the plaintiff the choice where to sue. It’s not the defendant’s choice, it is up to the plaintiff to decide.” Seligman also noted that Wal-Mart already has the advantage of its enormous size and deep pockets, and doesn’t need or deserve to be able to try the case in its back yard, where many of the residents and judges own Wal-Mart stock. See earlier story, “Wal-Mart Sued for Sex Discrimination — Class-Action Status Sought — California” Update: On December 3, 2001, U.S. District Judge Jenkins ruled that if a discrimination lawsuit against Wal-Mart goes to trial, it will take place in San Francisco. Judge Jenkins’ decision did not cover whether the trial should proceed. Instead, Jenkins’ ruling announces where the case would be tried if he approves of a trial.

Wal-Mart Pays $11M After Losing Bench Trial and Two Appeals in High-Stacking Case - Nevada. After six years of litigation, Wal-Mart has agreed to pay $11.4 million to a man who sustained brain injuries when he was knocked to the floor by falling boxes of toys. It was the plaintiffs’ rather than the defense who asked that the “high stacking” case be tried before a judge rather than a jury. The plaintiff’s attorney, James Murphy of Milwaukee, acknowledges that this was an unusual strategy. “I felt that the liability was so clear-cut that I elected to try the case before a judge believing a judge would see the evidence as I did while a jury’s reaction might be less predictable.” Murphy felt that the damages were so dramatic that even a judge would make a very substantial award, and that the strategy managed to take Wal-Mart off guard. Another reason for Murphy choosing a judge was timing. Murphy stated, “I wanted an early trial for my devastated client. Because of the federal court’s crowded calendar, precedence is given to pending criminal matters. I was able to get an early date which was otherwise not available to me.” In November 1993, male plaintiff, age 30, was holiday shopping with his wife, infant son and brother-in-law at a Las Vegas Wal-Mart. The plaintiff bent over to look at some toys on a lower shelf. Without warning or provocation, dozens of boxes from the high risers fell on the plaintiff knocking him to the floor. The plaintiff’s head hit the floor with such force that he was unconscious for 20 to 30 minutes, causing brain damage. Since the day of the accident, the plaintiff has suffered from debilitating epilepsy and psychosis; he is unable to hold a job and is emotionally removed from his family. Plaintiff’s expert, who is both a neurologist and a psychiatrist, told the court that the plaintiff should be considered permanently disabled. The plaintiff suffers with hyper-religiosity and hypo-sexuality; he will need medical treatment for the rest of his life. Wal-Mart’s defense expert countered with testimony that the plaintiff’s problems stemmed not from the injury but from a pre-existing condition that unexpectedly emerged at that time. The plaintiff claimed $7.6 million which included estimating his lost lifetime earnings between $1.1 million and $1.5 million, his lost household services at $137,000 and the cost of future health care at $5 million. During the case, evidence showed that merchandise stacked high on Wal-Mart risers - sometimes up to 15 feet higher than the top shelf- creates a hazardous condition. In his initial ruling in 1997, U.S. District Judge Philip Pro found that “For the five-year period between July 1, 1989 and June 30, 1994, Wal-Mart reported several thousand incidents of falling merchandise, with several causing injuries to employees and customers.” Judge Pro also wrote, “Wal-Mart clearly allowed the creation of a hazardous condition in the form of precariously perched merchandise on the gondola riser and then failed to protect customers like ©the plaintiffª from a foreseeable risk of harm.” Judge Pro awarded $3 million to the plaintiff and another $1 million to the plaintiff’s wife. Both the plaintiffs and the defendant appealed the judge’s ruling. Wal-Mart appealed the finding of liability, and the plaintiffs appealed the $3 million award. The Ninth Circuit upheld the verdict and the District Court’s finding of negligence, but asked the judge to explain why he limited the plaintiff’s damages to $3 million. On remand, Judge Pro specified that about $2 million of the award was for future medical costs and $1 million was for impairment of future earning capacity. Pain and suffering damages were not included. The plaintiffs appealed again arguing that the judge should have taken pain and suffering into consideration. The Court of Appeals agreed, and returned the case to Judge Pro for “calculation of additional damages,” Murphy said. This time, Judge Pro increased the award by $5 million - for a total of $8 million to the plaintiff and $1 million to the plaintiff’s wife. The case ended in July, 2001 when Wal-Mart agreed to pay $11.4 million to the plaintiffs including pre- and post-judgment interest, Murphy said. The case was in keeping with Wal-Mart’s anti-settlement strategy since it agreed to settle only after losing a bench trial and two appeals. Wal-Mart’s policy to litigate rather than settle personal injury cases is based, in part, on its belief that settlements invite frivolous lawsuits. Murphy sees a more cynical reason for the Wal-Mart’s heavy litigation policy - high stacking saves Wal-Mart enormous amounts of money even if customers get hurt occasionally as a result. Shafer v. Wal-Mart, U.S. District Court for the District of Nevada, Case No._____. James J. Murphy of Murphy, Gillick, Wicht & Prachthauser, Milwaukee, WI, for plaintiffs. Philip M. Hymanson of Beckley Singleton, Las Vegas, NV, for Wal-Mart.

PA Department of Environmental Protection Awarded $258,500 Due to Wal-Mart Site Work — Sub-Contractor Sues Wal-Mart — Pennsylvania. The Pennsylvania Department of Environmental Protection (DEP), Wayne County, was awarded $258,500 in its case against Leeward Construction, Inc. of Honesdale, PA. Leeward Construction, Inc. was the excavation sub-contractor at the Wal-Mart site in Texas Township, PA when the store was built. DEP spokesman, Mark Carmon, stated that this was one of the highest penalties ever issued in PA for erosion and sedimentation (pollution). DEP filed the complaint two years ago citing Leeward Construction, Inc. for failure to implement erosion control measures and for violation of DEP orders. Prior to that, DEP had issued three stop work orders within weeks of each other for sedimentation runoff at the Wal-Mart site and resulting pollution of an unnamed tributary and the Lackawaxen River. An Environmental Hearing Board in Harrisburg, PA accessed the penalty with the judgment handed down October 1, 2001. The initial civil penalty sought was $195,000. In June 1999, Leeward Construction, Inc. filed a separate suit against DEP as well as Wal-Mart and Wal-Mart’s contracted engineering firm. Leeward’s lawsuit charges that Wal-Mart breached its duties and obligations to Leeward by representing that the defective and incomplete site plans for Leeward’s work were adequate to comply with the permit issued by DEP. Wal-Mart was also faulted by Leeward for failing to give Leeward direction when DEP issued Compliance Orders and Notices of Violation; the engineering firm was faulted for not giving adequate plans. DEP and the Wayne County Conservation District was faulted by Leeward for forcing Leeward to execute the co-permit applications; for acting in an unfair manner and for forcing Leeward to correct deficiencies in the site plans when it was the fault of DEP and the district to assure a responsible review of the plans in the first place.

State Attorney General and Environmental Officials Sue Wal-Mart for Attempting to Expand Wal-Mart Store Beyond State-Approved Dimensions — $85M Cleanup Cost to Taxpayers — Connecticut. Connecticut’s State Attorney General, Richard Blumenthal, and state environmental officials recently filed a lawsuit in Hartford Superior Court against Wal-Mart over its attempt to expand a Stratford, CT Wal-Mart store beyond state-approved dimensions. The Stratford Wal-Mart is being built on a Superfund site that cost federal and state taxpayers $85 million to clean up. Blumenthal and the CT Department of Environmental Protection are seeking temporary and permanent injunctions to block Wal-Mart from allegedly violating restrictions on the property’s use.

NLRB Files Suit Against Wal-Mart for Unfair Labor Practices Against Meat Cutters Who Voted to Unionize — Texas. The National Labor Relations Board has filed a complaint accusing Wal-Mart of unfair labor practices against meat cutters who voted to create Wal-Mart’s first unionized U.S. labor group in Jacksonville, Texas in February, 2000. The NLRB claims that Wal-Mart threatened employees, interrogated them about their union sympathies and fired pro-union workers based on complaints from the United Food and Commercial Workers union. Following the pro-union vote, Wal-Mart began selling prepackaged meats eliminating the need for in-store meat cutters. Since then, Wal-Mart has refused to recognize the union and has questioned whether the workers still meet the criteria for a legitimate labor group. Wal-Mart spokeswoman, Jessica Moser, said that Wal-Mart is confident that the NLRB’s charges, issued September 26, 2001, will be dismissed. “This is no way means that anyone committed any wrongdoing. In fact, these charges have absolutely no merit,” Moser said. “The union organizers know that, and more importantly, our associates know that.” Union spokesman, Al Zack counters that the NLRB has backed up the workers’ grievances. “The victory will be when a judge hears the evidence and finds that Wal-Mart did take on its own employees and commit these unfair labor practices,” he said. Zack also said that only one of the seven original union supporters remains on Wal-Mart’s payroll.

EEOC Sues Wal-Mart for Violating ADA — Terminates Worker Due to Diabetes — Wal-Mart Moves for Summary Judgment — Arkansas. The Equal Employment Opportunity Commission and a diabetic woman have filed a lawsuit against Wal-Mart in U.S. District Court, Fayetteville, AR claiming that the woman, Mary Baker, a former Wal-Mart employee, was unlawfully discharged. The suit claims that Wal-Mart violated the Americans with Disabilities Act by failing to provide reasonable accommodations for Ms. Baker who was a freight processor for Wal-Mart in Bentonville. The EEOC claims that Wal-Mart failed to provide “simple accommodations” for Ms. Baker and “ignored” her repeated requests to transfer to positions that would have accommodated her disability. The EEOC also claims that Wal-Mart placed Ms. Baker on forced leave and subsequently fired her because of her disability. Ms. Baker is an intervenor in the case. Attorneys for Wal-Mart filed a motion for summary judgment in the case in August, 2001 arguing that there are no material facts in dispute, that Ms. Baker has failed to present a case for disability discrimination under the ADA, that Wal-Mart had a legitimate, non-discriminatory reason for terminating Ms. Baker, and that Ms. Baker has failed to show that Wal-Mart’s reason for terminating her was a pretext for her firing because of a disability. Wal-Mart contends that Ms. Baker was fired because she was unable to maintain an acceptable attendance record. After she failed to return to work after her one-year leave, Ms. Baker was terminated, according to the motion. Wal-Mart also argues that Ms. Baker is not an individual with a disability as defined by the ADA. Ms. Baker has not shown that she has a physical or mental impairment that substantially limits her in major life activities. If Ms. Baker takes appropriate corrective measures to deal with her diabetes, she is able to engage in normal activities, including working, according to the motion. Wal-Mart contends that Ms. Baker, in spite of her knowledge of those corrective measures, did not always avail herself of them. Wal-Mart officials further contend that they knew Ms. Baker was diabetic when she was hired, and Wal-Mart provided reasonable accommodation for her, including additional breaks, allowing her to change shifts and allowing her to take excess leave. Wal-Mart placed Ms. Baker on medical leave rather than terminate her for missing too many days of work. “Clearly, plaintiff’s only argument is that Baker did not get the accommodation she wanted, not withstanding that she was not qualified for the positions she sought,” according to the motion. In their response, the EEOC claims that Ms. Baker is a qualified individual with a disability because she has diabetes and is substantially impaired in one or more major life activities. The EEOC also argues that Wal-Mart refused to engage in the interactive process to determine whether accommodating Ms. Baker was possible, that Ms. Baker was harassed by supervisors because of her disability and that she was placed on leave and ultimately fired because of her disability. The EEOC has asked the court to grant a permanent injunction enjoining Wal-Mart from engaging in any employment practice that discriminates against individuals with disabilities. The EEOC wants Wal-Mart to grant back pay to Ms. Baker along with compensatory and punitive damages.

Two More Class-Action Lawsuits Filed Against Wal-Mart — Underpaying Hourly Workers — Missouri and Kansas. In September, 2001, two more class-action lawsuits against Wal-Mart were filed accusing Wal-Mart of underpaying its hourly workers. One suit was filed in District Court, Jackson County, Missouri seeking class-action status on behalf of hourly Wal-Mart workers in Missouri. The other lawsuit was filed in District Court, Wyandotte County, Kansas also seeking class certification on behalf of hourly Wal-Mart workers in Kansas. Counsel in both cases is Shughart, Thomson & Kilroy. Both lawsuits charge that Wal-Mart committed “acts of wage abuse” against its hourly employees by forcing them to work off the clock, failing to pay them overtime and preventing them from taking rest and lunch breaks. The two suits allege that Wal-Mart pressures its management to keep costs down by encouraging employees not to record all their time. “...This is done in an effort to maintain market dominance and to reduce labor costs and increase profits,” the complaints charge. “...This unlawful conduct by Wal-Mart is not isolated and sporadic but rather widespread and repeated.” Both suits are the latest in an array of similar lawsuits filed against Wal-Mart in the last couple of years. Wal-Mart won a victory recently in Ohio where a Montgomery County judge denied class certification to the plaintiffs in a similar case. The judge ruled that the proposed class was “unidentifiable and ambiguous” because many would-be class members were not asked or made to work off the clock or skip breaks. Wal-Mart spokesman, Bill Wertz, said that the company, because of its size, had become an attractive target for law firms “looking to drive us to a settlement, for which they would receive a fee.” “We intend to defend ourselves vigorously in these cases,” Wertz said. “We’ve looked into this and we believe our policies are fair and lawful.” The Wal-Mart Litigation Project does not encourage class-action lawsuits; we simply gather information about lawsuits.

Former Wal-Mart Employees Seek Lost Wages — Class-Action Suit — Wisconsin. Three former Wal-Mart employees filed a complaint against Wal-Mart in Milwaukee County Circuit Court claiming that Wal-Mart forces employees in Wisconsin to work without pay. The suit alleges that all three employees were forced to work an unspecified number of hours without pay and were denied meal and rest periods. The lawsuit claims Wal-Mart used threats to coerce the employees into working without pay. Milwaukee attorney, James J. Murphy, said the suit, if approved by a judge as a class action, could represent up to 50,000 people who work for Wal-Mart or did so during the last six years. Wal-Mart, which is battling similar lawsuits in a dozen states, said that it has strict policies for compensating employees; its policy is to pay employees for all time worked, and that there is no policy for compensatory time off or other compensation. One week later, a former Wisconsin Wal-Mart employee filed a similar lawsuit against Wal-Mart in Dane County Circuit Court. The former employee filed the complaint on behalf of Wal-Mart employees throughout Wisconsin alleging that she and Wal-Mart workers were forced to work “off the clock” and weren’t paid for work performed when their meal or rest breaks were interrupted or missed. This lawsuit claims that Wal-Mart management has long engaged in the practice, which has become an institutionalized, unwritten policy throughout the company. It alleges that Wal-Mart, which made $6 billion in 2001, depends upon the practice to wring free labor from its employees so it can maintain its profitability. Wal-Mart has 73 Mart stores, super centers and Sam’s Clubs outlets in Wisconsin employing 20, 500 people. Marla Kuhlmann, Valerie L. Smith and Teresea Khalil vs. Wal-Mart Stores, Inc., Circuit Court, Milwaukee (WI) County, Case No.____. Franklin D. Azar and Associates, Denver, CO; Bader and Associates, Denver, CO; James J. Murphy, Milwaukee, WI, for plaintiffs. Cathleen Hermanson vs. Wal-Mart Stores, Inc., Circuit Court, Dane (WI) County, Case No. ______. Charles Barnhill, Madison, WI, for plaintiff. The Wal-Mart Litigation Project does not encourage class-action lawsuits; we simply report information about lawsuits.

White Store Manager Gets $500,000 In Bias Suit — Case Involved Black Worker Searches — Ohio. A federal court jury in Cleveland, Ohio awarded a former Wal-Mart manager $500,000 after the plaintiff claimed that he was fired because he is white. The plaintiff had worked for Wal-Mart for nearly five years, and was the manager of the Cleveland Heights, Ohio store when the store opened in 1999. On June 11, 1999, the plaintiff testified that he left the Cleveland Heights Wal-Mart after working 14 hours. The plaintiff claimed that an assistant manager called him about 11 p.m. and said that a money bag containing about $1,000 was missing. The plaintiff testified that he told the assistant manager to check near the registers, bathrooms and garbage cans and to tell workers about it so that they could help search. The plaintiff also told the assistant manager to check employees’ packages as they left the store. At the end of the above conversation, the plaintiff told the assistant manager that he did not have to call him back. Wal-Mart officials then herded thirty-seven black employees into bathrooms and searched them. This meant that employees pulled up their shirts, rolled down their waistbands and turned their pockets inside out, according to court records. The plaintiff testified that he never told anyone to search employees. The plaintiff claimed that he was fired because Wal-Mart received negative media coverage of a search of African-American employees for a missing moneybag, and that Wal-Mart feared a public relations backlash from the incident. The plaintiff also claimed that he was fired because of his race, a move made to quell complaints against Wal-Mart. A black manager replaced the white plaintiff. Wal-Mart contended that the plaintiff made a bad situation worse, and that the plaintiff was not in charge of the situation. Wal-Mart contended that the plaintiff gave vague directions to the assistant manager and never called back to follow-up. The plaintiff alleged that he was told by Wal-Mart that he was fired because he violated company policies. When the plaintiff asked Wal-Mart officials what he had done, Wal-Mart failed to give him a reason. Senger v. Wal-Mart, U.S. District Court, Cleveland, Ohio, Case No.____. Lawrence Peskin, for plaintiff.

GC Ordered to Attend Trial After Wal-Mart Rebuffs Settlement — Michigan. Wal-Mart was ordered to have its general counsel or another corporate officer with “litigation policy authority” attend the trial of an individual customer’s negligence action in a Michigan federal district court, after Wal-Mart refused to settle the case, based on Wal-Mart’s policy, during a pre-trial settlement conference. District Judge Gerald E. Rosen of the U.S. District Court for the Eastern District of Michigan imposed the requirement on October 20, 2000, in Shedden v. Wal-Mart. This requirement was due to Wal-Mart’s counsel asserting at a final pre-trial settlement conference that Wal-Mart has a “no settlement” policy for litigation brought by customers. Although Wal-Mart’s counsel appeared at the conference with a co-manager of the local store involved, who ostensibly had authority to negotiate a settlement, Wal-Mart maintained that it “had nothing to discuss with the Court and plaintiffs” regarding settlement, according to the order. “An across-the-board policy of refusing to negotiate frustrates both the letter and spirit of both the Federal Rules of Civil Procedure and this Court’s Local Rules which encourage good-faith settlement efforts in order to preserve scarce judicial resources,” Judge Rosen wrote. The judge noted that Wal-Mart had previously asserted the policy in another case, and that the court had warned Wal-Mart it would impose the attendance requirement the next time the “no settlement” policy was raised at a settlement conference. “This Court views Wal-Mart’s pre-trial conference tactics as nothing less than an attempt to circumvent the court rules and this Court’s Scheduling Order,” Judge Rosen observed.

Workers Sue Wal-Mart for Not Paying Overtime — Class Action Status Sought — Washington State. Two Washington state former Wal-Mart employees have joined other former employees from about a dozen states in filing a lawsuit against Wal-Mart for allegedly forcing them to work unpaid overtime. The lawsuit was filed on behalf of thousands of current and former Wal-Mart employees in Washington state. The plaintiffs claim that store managers in Washington state, under pressure to lower costs, systematically refused to pay overtime wages and bullied employees into working through breaks and lunches. The plaintiffs accuse Wal-Mart of keeping employees locked in the store for hours, without pay, until managers had completed checks of every department. The plaintiffs claim that they were often required to work overtime and to attend meetings and training sessions, all without being reimbursed. The lawsuit says that employees were pressured to do so through intimidation and threats that they would be fired. The plaintiffs do not specify damages, but they claim back wages for the hours employees worked without pay. Wal-Mart employs about 8,900 people in Washington’s 30 Wal-Mart stores and two Sam’s Club outlets. Attorneys for the plaintiffs had talked to about 30 current and former employees in Washington who were “supportive” of the case, and damages could potentially hit tens of millions of dollars, Beth Terrell, one of the plaintiffs’ attorneys, said. Similar lawsuits are pending in New York, Indiana, Louisiana, Nevada, New Mexico, Ohio, Texas, California, Iowa, Oregon, Georgia, Missouri, Kansas, Wisconsin, Illinois and Kentucky. This is not the first time that Wal-Mart has run into legal trouble in Washington State. Last December, the state took over Wal-Mart’s workers’ compensation program, accusing Wal-Mart of failing to pay proper benefits to injured workers despite repeated warnings and fines. Debra Barnett and Tamra Moore vs. Wal-Mart Stores, Inc., Superior Court, King (WA) County, Case No.____. Chris Brain of Tousley Brain & Stephens, one of the firms representing the plaintiffs. The Wal-Mart Litigation Project does not encourage class-action lawsuits; we simply gather information about lawsuits.

Wal-Mart: The Most Sued Retailer. Wal-Mart reported that nearly 5,000 lawsuits were filed against it last year (a rate of about one every two hours, with jury verdicts coming in at a rate of six a day). As a result, Wal-Mart is the second most-sued entity in the country after the U.S. government, according to an August USA Today story. Wal-Mart officials estimate, that at any given time, they’re defending against nearly 9,400 open cases. Extrapolated across the chain, Wal-Mart’s in-house staff and its hired attorneys now work on two open suits for each of Wal-Mart’s 4,307 international locations. Critics contend that the case volume reveals a clear pattern of wrongdoing. They say that Wal-Mart has abandoned its employees and customers, fighting them tooth and nail on any complaint they take to court. On the other hand, Wal-Mart officials say that they have to battle these cases for their shareholders to ward off frivolous lawsuits. According to USA Today, Wal-Mart has grown so large that it is impossible to prevent every slip and fall or harassing comment. Unlike most other big targets of lawsuits, who feel it’s better and cheaper to settle many claims than rack up big legal bills fighting them, Wal-Mart ferociously opposes lawsuits even if doing so costs more. Wal-mart’s legal team closed 5,200 cases in fiscal 2001 which ended Jan. 31. About 29 percent of those cases were dismissed, roughly 34 percent were settled and 8 percent were assumed by another party. Of all the cases Wal-Mart took to court last fiscal year, Wal-Mart’s lawyers claimed victory about 60 percent of the time, according to USA Today.

Wal-Mart Concedes: We Should Have Offered Memo On Risks To Shoppers — Texas. Wal-Mart failed to take security precautions suggested by one of its top in-house lawyers the year before Donna Meissner was abducted from the parking lot of a Beaumont, Texas Wal-Mart and raped, a confidential company memorandum shows. When Ms. Meissner sued Wal-Mart in a premises security case, Wal-Mart lawyers failed to turn over the document, despite the court order and the $18 million fine for withholding evidence. The sanction was withdrawn only after Wal-Mart made an extraordinary, in court apology. The memorandum, dated April 10, 1995 and written by Ronald A. Williams, Wal-Mart Assistant General Counsel, listed nine suits against Wal-Mart involving attacks in Wal-Mart parking lots in Beaumont, Houston and surrounding areas. All nine suits were filed between 1991 and 1994. In the memorandum, Mr. Williams suggested that Wal-Mart use golf cart patrols in the parking lots which Wal-Mart had found to be highly effective in reducing parking lot crime in a pilot program. “Plaintiffs’ attorneys point to the fact that even though we have knowledge of these violent acts we have not taken appropriate precautions to keep them from happening or to at least provide more obvious deterrents.,” Williams wrote. One year later, 1996, Ms. Meissner was returning to her car after shopping in the Beaumont, Texas Wal-Mart. She was kidnaped, raped and sodomized by a man who has never been caught. The parking lot was not patrolled. Wal-Mart settled with Ms. Meissner on confidential terms last spring. Wal-Mart concedes that the memorandum should have been turned over to Meissner’s lawyers. However, Bill Wertz, Wal-Mart spokesman, said that the document did not turn up when Wal-Mart reviewed files for material Judge Mchaff ordered to be turned over. And Mr. Wertz said that , at the time, Williams didn’t remember having written it. Although the Meissner case is settled, Gilbert T. Adams, plaintiff’s attorney, says that he may try to use the Williams document to reopen the case or to call for disciplinary charges against Williams. Donna Meissner v. Wal-Mart Stores, Inc., District Court, Jefferson (TX) County, Case No. A159,432. Gilbert T. Adams, III, for plaintiff.

NLRB Files Another Suit Against Wal-Mart for Unfair Labor Practices — Tire and Lube Express Workers Wanted to Unionize — Pennsylvania. The National Labor Relations Board has issued another complaint against Wal-Mart alleging Wal-Mart illegally discouraged employees of the Tire and Lube Express department, New Castle, Pennsylvania from joining a union. The complaint was prompted by allegations made against Wal-Mart by the United Food and Commercial Workers union which has challenged Wal-Mart over alleged unfair labor practices at stores across the country. A hearing is set for January 15, 2002 in Lawrence County Common Pleas Court, Pennsylvania before an administrative law judge. The UFCW claims that Wal-Mart executives from Arkansas descended on the New Castle Wal-Mart after Tire and Lube Express employees signed union authorization cards and considered joining the union in the summer of 2000. The UFCW also alleges that Wal-Mart management corrected long-ignored problems on the spot to show employees that they did not need third-party intervention. The complaint claims that Wal-Mart replaced a district manager, hired eight new workers, replaced broken equipment, unlawfully engaged in surveillance of union activities and promoted an employee to dilute union support. Lou Maholic, director of organizing for UFCW Local 680, said that a vote to determine if the workers will unionize has been postponed until the NLRB charges are resolved. Wal-Mart officials say that the charges are the union’s attempt to stall the election because there is not enough support to organize the employees. “It was blocked because the union had no support and they didn’t want to lose face. They did what they felt they had to do,” said Jessica Moser, a Wal-Mart spokeswoman from the corporate office in Bentonville, AK. Moser noted that one charge from the NLRB involves the move of a union supporter from the Tire and Lube Express department to loss prevention. She said that the employee asked to be moved to the new position. Maholic said that the allegations in New Castle demonstrate a nationwide pattern by Wal-Mart of avoiding unionization. He said similar charges against Wal-Mart have been filed in Nevada, Texas and Arizona. Jessica Moser said that the union tried to bring unfair labor practice grievances against Wal-Mart on a national basis but was rejected by the NLRB and is now doing it store by store.

Man May Pursue Premises Security Case Against Wal-Mart — Abduction, Rape, and Murder Case Sent Back For Trial — Tennessee. On November 6, 2001, the U.S. Sixth Circuit Court of Appeals ruled that where Wal-Mart was the anchor store at a shopping center and had the right to use the entire parking lot, Wal-Mart can be sued after a woman was abducted from the parking lot in 1990. This is true even though there was no evidence that the woman was actually abducted from the portion of the lot outside Wal-Mart, the court said. Wal-Mart shared the parking lot of the Delta Square Shopping Center in East Memphis with 11 other tenants. However, its lease guaranteed it a set percentage of parking spots for its patrons. The plaintiff’s wife was abducted from the parking lot and later raped and murdered near West Memphis. Wal-Mart purchases and receipts were found with her body. The family of Dorothy McClung pursued similar damages in state court, suing Wal-Mart, the East Memphis shopping center and the center’s manager. The plaintiff alleged that all were negligent in failing to provide adequate security for customers. In 1990, the Tennessee Supreme Court reversed trial and appeals court decisions dismissing the lawsuit and ordered a trial. The decision set a precedent that broadened state laws on the liability of store owners when customers are injured by third parties. Following the Tennessee Supreme Court’s ruling, Wal-Mart was dismissed as a defendant in that suit, but a jury ordered the shopping center and its management company to pay the plaintiff $1.63 million in damages. The plaintiff then refiled the civil complaint in federal court against Wal-Mart claiming that Wal-Mart’s “premises” included a common parking area at the Delta Square Shopping Center, and that Wal-Mart knew the parking lot was dangerous and should have taken steps to make it safer. Wal-Mart argued that it couldn’t be held liable unless the plaintiff could show that his wife was abducted from the parking area outside its store. The court disagreed. Here, “the evidence is sufficient to permit a reasonable jury to conclude that the abduction took place somewhere in the ...shopping center parking lot. Thus, we conclude that plaintiff has raised a genuine issue of fact as to whether the abduction occurred on defendant’s premises...Wal-Mart had rights to the entire...shopping center parking lot and Wal-Mart’s customers were free to park anywhere in the lot. Nothing indicated to customers that Wal-Mart had any special parking area or extended a special invitation to park in a particular part of the shopping center lot. Thus, Wal-Mart’s relationship with its customers was based on an invitation to park anywhere in the...shopping center parking lot in order to shop at Wal-Mart.” Roger L. McClung v. Wal-Mart Stores, Inc., et al., U.S. Court of Appeals, Sixth Circuit, 270F.3d 1007, Case No. 99-6604. Bruce S. Kramer, Elaine Sheng, P. Bryan Mauldin of Borod & Kramer, Memphis, TN, for plaintiff.

Hourly Worker Accuses Wal-Mart of Wage-Abuses — Class Action — Michigan. In September, 2001, female plaintiff, mother of five and former customer service manager in Flint, Michigan, filed a class-action lawsuit against Wal-Mart in Saginaw County Circuit Court, Michigan. The plaintiff claims that Wal- Mart and its subsidiary, Sam’s Club engaged in a wage-abuse scheme against hourly workers in Michigan. The suit alleges that Wal-Mart routinely gives its employees assignments it knows the workers cannot complete within their scheduled shifts and pressures them to complete their work through intimidation, threats of discharge and demotion. The class consists of current and former hourly employees in Michigan who worked for Wal-Mart after September 26, 1995. Workers have 90 days to join the suit, and each plaintiff will seek more than $75,000 according to plaintiffs’ attorney, Joseph S. Scorsone. “We are still in the process of gathering people,” Scorsone said. “There will be a number of them. We have reason to believe the practice was going on statewide.” Scorsone said that he doesn’t know how many current and former Wal-Mart employees will join the lawsuit. The suit claims that Wal-Mart was aware of its “off the clock” practice because managers were in the stores when uncompensated work occurred. Wal-Mart knew of the abuse through internal reports and did nothing about it, the suit says. The complaint calls Wal-Mart’s practices a “systematic and clandestine scheme.” “Although Wal-Mart claims that it “respects the individual”, it has ridden the backs of its hourly employees to extreme profitability,” the suit contends. “One of Wal-Mart’s basis for its profitability is its creation and implementation of a system that encourages off-the-clock work for its hourly employees throughout its stores in Michigan, according to the complaint. “It’s against Wal-Mart for any manager to require or tolerate off-the-clock work,” Bill Wertz, spokesman for Wal-Mart, said. “Any manager who fails to follow policy will be disciplined, and possibly terminated.” In the past, there were isolated cases in which employees inadvertently failed to follow procedures, and the company did not pay them, Wertz said. Wal-Mart operates 78 stores with more than 20,000 employees in Michigan. Brenda F. Scott, individually on behalf of herself and all others similarly situated vs. Wal-Mart Stores, Inc., and Sam’s Club, Circuit Court, Saginaw (MI) County, Case No. 01-40751. Joseph S. Scorsone, Saginaw, MI; Joseph J. Mellon of Shughart, Thomson & Kilroy, Denver, CO; Gerald L. Bader, Jr. Denver, CO; Franklin D. Azar, Denver, CO, for plaintiffs. The Wal-Mart Litigation Project does not encourage class action lawsuits; we simple report information about lawsuits.

Woman Claims Wal-Mart Destroyed Evidence — Spoliation Claim Can Proceed — Ohio. An Ohio woman can sue Wal-Mart for allegedly hiding evidence that it knew about accidents similar to the one that killed her husband, according to an October 31, 2001 decision of the Ohio Supreme Court, Davis v. Wal-Mart. The Davis case is the latest involving damaging documents that Wal-Mart allegedly failed to turn over in lawsuits which lawyers and others later dug up on their own. In September 1992, Tom Davis was unloading a produce truck at a Sam’s Club in Oakwood, Ohio. The truck pulled away too soon causing the forklift Davis was operating to fall off the loading dock pinning Davis underneath and killing him. Before filing the complaint, Davis’ widow hired a private investigator who turned up a crucial Sam’s Club memorandum that was written eight months before her husband was killed. “Recently we have had several incidents where trucks have prematurely pulled away from our dock while an associate and/or lift equipment was still on the truck,” said the memorandum. To fix the problem, Sam’s Club required that truck drivers hand over their keys while their trucks were being unloaded, to ensure the trucks wouldn’t be driven away, possibly injuring workers. Davis sued, claiming that Wal-Mart failed to follow its own procedures, creating a “substantial certainty” that the accident would occur — a higher standard than a simple negligence action. A simple negligence action would have been barred under Ohio’s workers’ compensation law. During discovery, Wal-Mart failed to turn the document over, despite discovery requests that were tailored to cover a document that Wal-Mart didn’t know Davis had already found. At trial, the plaintiff’s attorney, argued that Wal-Mart tried to hide evidence that Wal-Mart knew would sink its case. Then, while the lawyers were litigating over prejudgement interest which would add another $600,000 to the verdict, Davis’ lawyers learned that there were accident reports. Wal-Mart claimed that it could not locate these accident reports. Davis sued again claiming that Wal-Mart had violated a duty to preserve the evidence. The trial judge dismissed the case on the ground that the spoilation claim had already been raised — without apparent success — at trial and that should not be allowed to litigate it a second time, a point that Wal-Mart took up on appeal. Wal-Mart also urged Ohio to abandon its spoliation tort which creates a cause for action for destruction of evidence. Wal-Mart argued that courts already have ample power to punish parties that lose or destroy evidence and that few states recognize the spoliation tort. In a plurality opinion, the Ohio Supreme Court ruled that Davis can go ahead with the separate spoliation claim, although it was unclear whether Davis could recover punitive damages without proving specific harm to her original case. “What this case illustrated is that Wal-Mart failed to keep its records in a diligent manner,” said Wal-Mart spokesman Bill Wertz. Mart has taken steps to ensure that itslegal department and its local stores respond properly to discovery requests, he added. The Davis case is set to return to a Cleveland State Court Davis v. Wal-Mart Stores, Inc., 93 Ohio St.3d 488, Case No. 00-1145. Brian N. Eisen and William Green, for plaintiff. Decided October 31, 2001.

Wal-Mart to Pay $6.8 Million to Settle EEOC Lawsuit — California. Wal-Mart has agreed to pay $6.8 million to settle a lawsuit alleging it violated the Americans with Disabilities Act (ADA). Wal-Mart was accused of discrimination against people with disabilities in a pre-employment screening. At the heart of the government’s legal actions are alleged unlawful medical inquiries directed at people seeking jobs. Applicants were given a form “Matrix of Essential Job Functions,” which listed the purported physical requirements of the job. Applicants were asked to indicate on the form whether they could do the job or whether they could do the job with an accommodation. If the latter was indicated, applicants were asked to identify the accommodation. The EEOC claims that the form was “an illegal screening device that Wal-Mart has not established to be job-related and required by business necessity.” The settlement reached includes 13 other similar lawsuits filed against Wal-Mart in 11 states which includes California, Ohio, Arkansas, Virginia, North Carolina, Illinois, New York, New Mexico, Arizona, Missouri and Texas. The EEOC lawsuit alleged that between 1994 and 1998, Wal-Mart sought disability-related information from applicants through a pre-employment questionnaire before making conditional offers of employment, a violation of the ADA. In October, 2001, Wal-Mart admitted in Sacramento federal court that it engaged in the screening at its domestic stores and distribution center during much of the 1990s. Under a consent decree signed by Wal-Mart on December 17, 2001, a total of $6.8 million dollars will be paid to set up two separate funds to compensate alleged victims of discrimination. A $3.8 million fund will be used to pay settlements to 21 individuals subjected to disability discrimination including one that triggered the Sacramento suit. One former employee, who has impaired hearing, was fired from Wal-Mart’s Red Buff distribution center in 1996 instead of being reassigned. The former employee could not hear a scanning device’s beeping sound signaling that a product’s bar code had been read. This former employee will get $202,880 in back pay, interest and compensatory damages, and an unspecified job. Two job applicants, one with back problems and the other partially blind, at a distribution center in Cobleskill, NY, will receive payments of $171,839 and $187,774. It also provides for the establishment of a $3 million national fund to compensate people who come forward and document that they were victims of the unlawful inquiry. To qualify, a disabled person must have been turned down for a job between January 1, 1994 and December 31, 1998. In addition, Wal-Mart will extend preference in hiring to the victims of the unlawful inquiry. Wal-Mart will institute a new ADA policy, including accommodation and complaint procedures. It will abolish the matrix and replace it with job descriptions. The EEOC also targeted alleged failures to accommodate certain employees’ disabilities as well as alleged firings because of disabilities. Equal Employment Opportunity Commission vs. Wal-Mart Stores, Inc., U.S. District Court, Eastern District, Sacramento (CA) County, Case No. S99-0414 GEB DAD. Nicholas M. Inzeo and Gwendolyn Young Reams, Washington, D.C.; William R. Tamayo, Jonathan T. Peck, Lynn L. Palma, San Francisco, CA; Mary Jo O’Neill, Phoenix, AZ, for plaintiffs. Robert K. Rhoads and Gregory S. Muzingo, Bentonville, AR, for Wal-Mart.

Three Black Shoppers Sue Wal-Mart After They’re Mistaken for Robbers — Minnesota. On March 27, 2000, three black men from Hennepin County, Minnesota were shopping at the 24-hour Wal-Mart in Fridley, Minnesota at about 1 a.m. They were the only black shoppers in the store at 8450 University Avenue, Northeast. Wal-Mart announced that the cashier lanes would temporarily close. As they waited for a lane to open, the men noticed that employees were “looking at them in a manner that made them feel uncomfortable”. After the men bought about $300 in merchandise and walked out, police surrounded them, weapons drawn. According to the lawsuit, filed in Minneapolis, the police handcuffed them, told them to lie on the pavement and searched them. Police found no gun, as employees had suspected, and no evidence of a planned robbery. The men “had no idea what was going on,” the complaint said. “They were in shock and in fear for their lives”. Police told the men that they went to the store after a 911 call reported three suspicious black males, one of them possibly armed. “Wal-Mart employees had given every indication that the plaintiffs were robbers casing the store,” the complaint alleges. Police determined that they were not robbers and told them they could go. As the men were about to leave, an employee accused them of not paying for two items. The men said that they thought they had paid for everything, but when the sales receipt did not list two items, they paid for them and left. The men are accusing Wal-Mart of violating their civil rights, of defamation and of false imprisonment, among other things. The men complained to Wal-Mart soon afterward but their complaint “fell on deaf ears,” according to their attorney, Aldo J. Terrazas.

Union Urges Statewide Boycott of Wal-Mart — Montana. Members of the United Food and Commercial Workers No. 4 are urging a statewide boycott of Wal-Mart. Since the Wal-Mart Superstore opened in Butte, Montana, union grocers have had their hours cut or jobs eliminated. “Forty people in Butte work less than half of their hours,” said Nicolai Cocergine, president of UFCW’s No. 4. Mr. Cocergine was referring to the effect he perceives Wal-Mart has had on local union stores that include Albertson’s, two Safeway stores and Eastgate IGA. According to Mr. Cocergine, workers have been laid off as well. Wal-Mart has siphoned off regular union-store shoppers and the result was immediate; while some stores have been hit harder than others, in general sales are off about 25 percent. Cocergine also fears that eventually at least one grocery store in town will be forced out of business, but at least two union stores say they have no plans to leave Butte. He fears that the situation could worsen, and to blunt the effects, Cocergine’s union is urging shoppers to honor the boycott of Wal-Mart and its products. The AFL-CIO also sponsors the boycott. Cocergine admits that it is tricky since Wal-Mart is able to sell many products cheaper than other retailers. He also urges people to support the stores that have been productive members of the community for so long and reward them with their business. Cocergine said that Wal-Mart’s benefit package is inferior when compared to union-stores. He feels that the pressure on local stores could translate into an erosion of wages and benefits for union members if stores seek concessions in upcoming negotiations. A local Wal-Mart manager has said that employees for the store start at above minimum wage, and the store offers 401Ks, profit sharing and annual raises. The local manager also stated that Wal-Mart will pay for the talent it needs based on people’s experience and talent. More than 250 people have been hired for the new grocery jobs and, the local manager believes that Butte has room for both union and non-union stores. While no stores have closed in Butte, layoffs and reduced hours have occurred.

February - September 2001.

Consumer Product Safety Commission has Sued Wal-Mart and Icon Health and Fitness, Inc. for Failure to Report 41 Injuries From Home Exercise Equipment. The Justice Department and the Consumer Product Safety Commission are seeking up to $4.5 million in fines each from Wal-Mart and Icon Health & Fitness. This case marks the first time that the government has sued a retailer in federal court for failing to report product-related injuries. The lawsuit says that Weider and Weslo exercise gliders, made by Icon (price $99-$149) had a defective arm supporting the seat that could unexpectedly disconnect, causing the user to fall. Many of the injuries - which included fractured vertebrae, herniated discs and a spinal injury that left a woman 50% disabled - occurred in Wal-Mart Stores. Wal-Mart was first alerted to a potential problem with the glider in 1996 when a customer was injured in a Wal-Mart store, but the retailer failed to report the injury to the CPSC as required by law. The government also says that Icon Health and Fitness, Inc. knew of 86 incidents, including 68 injuries, but did not report them to CPSC. Icon did make design changes to the gliders. According to published reports, an insurance company owned by Wal-Mart settled 36 claims related to the incidents. Wal-Mart spokesman Bill Wertz said that the company would defend itself against the charges, adding that he believed a jury would “find that there is no reasonable basis to lead it to conclude that there was a product defect.” USA et al. v. Wal-Mart Stores, et al, U.S. District Court for the District of Maryland (Greenbelt), No. 8:01CV1521. Allen F. Loucks, Office of the U.S. Attorney, Stephen M. Schenning, U.S. Attorney, and Stuart E. Schiffer for USA.

Wal-Mart Fined $750,000 for Violating ADA Rights of Deaf Applicants — Arizona. U.S. District Judge William D. Browning, Tucson, Arizona, fined Wal-Mart $750,000 for violating an agreement to improve treatment of deaf employees. Judge Browning also ordered that Wal-Mart produce a 30-second TV ad to be aired in Phoenix and Tucson every day for two weeks. The commercial must explain the Americans with Disabilities Act, state that Wal-Mart has violated it, and refer people who may have been discriminated against to the Arizona Center for Disability Law or the Equal Employment Opportunity Commission. Judge Browning’s fine and order stem from the EEOC ‘s 1998 lawsuit against Wal-Mart claiming that Wal-Mart violated the ADA by failing to hire two deaf men who had applied for jobs unloading merchandise in the back of a Tucson Wal-Mart in 1995. Neither man ever got a call back even though the mother of one of the deaf applicants worked at the Tucson store and knew that Wal-Mart was hiring. When the men inquired further, they were informed that there were no jobs, according to an EEOC attorney. According to published reports, Wal-Mart did not hire the two deaf men because managers expressed concerns about communication and safety during the application process. The EEOC had asked Judge Browning to declare Wal-Mart in contempt of court and impose sanctions. A consent decree was approved by Judge Browning on January 6, 2000, and Wal-Mart hired the two deaf men at $8 an hour and paid them $66,250 each in back wages and damages. Wal-Mart also paid $57,500 in attorneys’ fees and costs to the prosecuting agencies. Wal-Mart also hired a sign-language interpreter during a two-week training period for the two deaf men; however, no interpreter or other means of communication was available after their training ended according to Judge Browning. One of the deaf applicants received only “hastily written notes...grudgingly given” from his supervisor, and “it appears that Wal-Mart attempted to ‘warehouse’ him by restricting him to a certain area of the store”, Judge Browning said. Both deaf employees have since left Wal-Mart. The EEOC also charged that Wal-Mart had failed to insert a sign-language interpreter into corporate training videos, had not provided disabilities training for managers within 180 days as called for in the consent decree, and had refused to allow officials with the EEOC and the Arizona Center for Disability Law to visit its stores to verify compliance, according to the EEOC. “Because Wal-Mart has steadfastly refused to satisfy its court-ordered obligations, we remain extremely concerned for hearing-impaired individuals in Arizona and throughout the country who seek employment with Wal-Mart or are currently employed,” said C. Emanuel Smith, acting regional attorney for EEOC’s Phoenix office. But Wal-Mart spokesman Bill Wertz said that Wal-Mart has complied with “virtually all of the terms” of the settlement. “There has been a delay in implementing the management training program, but the EEOC had agreed to it,” he said. “Therefore, we’re surprised by the EEOC’s motion.” According to Bill Wertz, Wal-Mart admitted no discrimination in settling the suit.

Wal-Mart Sues Church for Soliciting — California. Since January, 2001, Wal-Mart has filed 10 suits in several California counties against the 1,000-member, Covina, California-based Missionary Church of the Disciples of Jesus Christ, seeking to keep church members away from its doors. The cases have been consolidated and will be heard in San Bernardino County Superior Court. Wal-Mart claims that volunteer missionaries from the Missionary Church of the Disciples of Jesus Christ set up tables to seek donations in front of Wal-Mart stores’ doors. Wal-Mart claims that the church has failed to abide by the discount chain’s policies. The church gathers about $15,000 per month in donations for food, clothing and other aid for the poor as reported by one of the church’s volunteer missionaries. It has been reported that Wal-Mart, which promotes family values and sells spiritual books and other religious products, is being hypocritical by targeting the church. Wal-Mart representatives say that the retail chain is only trying to enforce its policies for solicitors. Wal-Mart’s guidelines for solicitors include signing store forms that detail how the groups collect money and where group members will stand or set up tables. Girl Scouts, Boy Scouts, the Salvation Army and other charities are often allowed to collect donations if they sign the Wal-Mart forms. The church has refused to sign the forms, claiming that Wal-Mart favors certain groups over others. “It has nothing to do with the fact that they’re a religious entity,” said Tyrone J. Maho, a lawyer for Wal-Mart. The retail chain is “seeking legal action as a last resort. It’s not something that Wal-Mart does often, only when it’s kind of backed into a wall because its customers have complained,” stated Maho. Women’s Wear Daily, New York, reports that in July, a southern California judge handed down a temporary restraining order barring the Missionary Church of the Disciples of Jesus Christ from haphazardly setting up tables and soliciting in front of Wal-Mart stores. Court papers obtained by Women’s Wear Daily said that the church members can no longer block entrances and exits to Wal-Mart stores, must stand no closer than 15 feet from entrance and exit doors, and can ask for donations only with canisters, not tables. In addition, the church must ask Wal-Mart five days in advance of its intent to solicit and must limit its presence at a particular store to three consecutive days with a total of 14 days per calendar year. A hearing, which could decide whether the church has a right to have any access to Wal-Mart property, has been scheduled for August 28.

Wal-Mart Points Finger at Third Party Cleaning Service in Nashville — Slip and Fall Case. On September 9, 1999, the male plaintiff was shopping in the Wal-Mart store located at 1112 Nashville Pike, Gallatin, Sumner County, Tennessee. The plaintiff slipped and fell on a liquid which had been spilled and/or had accumulated and had not been cleaned up. There were no signs warning the plaintiff of the liquid spill. As a result of this fall, the plaintiff suffered a severe, permanent bodily injury. The plaintiff claims medical expenses, loss of wages, mental and physical pain and mental distress. The initial complaint listed Wal-Mart as the sole defendant. In its answer to the Complaint, Wal-Mart stated that it had hired Southern Cleaning Services, Inc. to perform cleaning services at the Gallatin Wal-Mart. The plaintiff amended his original complaint to add Southern Cleaning Services as a defendant. In its answer to the Amended Complaint, Southern Cleaning Services stated that it sub-contracted with P.K. Kontakt Service, Inc. of Chicago to perform the floor cleaning services at the Gallatin, Wal-Mart. P.K. Kontakt Service, Inc. did perform cleaning services during the time which is the subject of the plaintiff’s alleged injury. The plaintiff chose not to attempt to add P.K. Kontakt as a defendant. In July 2001, Southern Cleaning Services filed a motion for permission to file a Third-Party Complaint against P.K. Kontakt Service, Inc. The motion was granted and a third-party Complaint was filed in July against P.K. Kontakt Services, Inc. claiming that, if any negligence in cleaning is concluded, P.K. Kontakt Service is negligent and not Southern Cleaning Services. Buddy Jennison vs. Wal-Mart Stores, Inc. and Southern Cleaning Services, Inc., U.S. District Court, Middle District of Tennessee, Nashville Division, Case No. 3-00-0979. Hugh Green, Lebanon, TN, for plaintiff. Andy Rowlett of Howell & Fisher, PLLC, Nashville, TN, for Wal-Mart and Tom Corts, Nashville, TN, for Southern Cleaning Services, Inc.

Local Newspapers Accused of Coverup to Protect Helen Walton from a Possible $6.5 Billion Judgment — 1999 Traffic Accident — Bentonville. Attorney Dan Ivy has filed suit in Benton County Circuit Court, Bentonville, Arkansas, against two local newspaper companies claiming that they are part of a conspiracy to protect the widow of the founder of Wal-Mart Stores, Inc. from a possible $6.5 billion judgment. Attorney Ivy represents a man who was in a February, 1999 traffic accident with Helen Walton after she ran a red light. According to court documents, Attorney Ivy claims that The Benton County Daily Record and Northwest Arkansas Times (which are owned by Community Publishers, Inc.,) and the Arkansas Democrat-Gazette (which is owned by WEHCO Media, Inc.) are part of monopolist and antitrust influence in Benton County and northwest Arkansas. The complaint further alleges that the Arkansas Democrat-Gazette attempted to influence Circuit Judge Tom Keith’s decision to protect Helen Walton by publishing a profile on him in the June 7, 2001 edition of the paper. Attorney Ivy had previously filed a motion asking Circuit Judge Keith to recuse himself from the suit because he and his wife own more than $12,500 worth of Wal-Mart stock. Ivy also wants to expunge the records of the June 7 hearing where Judge Keith refused to allow Ivy to depose Helen Walton and seek punitive damages in the suit. In the documents, Ivy once again requests that Judge Keith recuse himself from the suit, along with Judges Donald R. Huffman, Xollie Duncan and David Clinger because of their Wal-Mart stock holdings.

OSCH Deletes Wal-Mart’s Fine in Death at Bentonville. The Occupational Safety and Health Administration has deleted a penalty against Wal-Mart Stores, Inc. after the retailer corrected a safety violation at a Bentonville, Arkansas distribution center. OSCH levied a citation and a $956 fine against Wal-Mart after an investigation into the March 21, 2001 death of a Wal-Mart employee who was crushed to death when he fell in front of a slowly moving truck. Wal-Mart and OSCH officials met April 10 for an informal conference to discuss a settlement, according to OSCH’s case file. Officials agreed April 25 to delete the citation and fine after Wal-Mart painted a walkway from the center’s maintenance shop to the fuel bay. The lack of such a walkway apparently did not play a large role in the employee’s death. According to the Bentonville Police Department investigation reports, the employee fell and was struck just inside the fuel bay. He had walked to the bay from the maintenance building, the police report said. Under the terms of the informal settlement agreement, Wal-Mart also agreed to “conduct a survey of conditions and procedures to identify and correct hazards as they relate to fueling operations at all of its distribution centers,” the agreement said. Wal-Mart agreed to provide the Little Rock area OSCH office with results of that survey within one year.

Worker Sues Wal-Mart for Not Paying Overtime — Illinois. A local employee of Wal-Mart has filed a lawsuit in the Rock Island County Circuit Court, Rock Island, Illinois claiming that Wal-Mart used a “clandestine program” of not paying overtime and forcing employees to perform tasks off duty. The lawsuit also asks the court to broaden the scope of the complaint into a class-action suit that would include all employees of Wal-Mart stores across Illinois. It asks for withheld pay with interest, general unspecified damages and attorneys’ fees. The lawsuit claims Wal-Mart supervisors give employees tasks that they know cannot be completed within their scheduled hours. In a “clandestine program”, supervisors use intimidation and threats to get the work completed after clocking out at the end of a shift, before clocking in at the start of a shift, or not allowing breaks or meal breaks. According to the lawsuit, wages are a store’s largest expense, and managers at the store, district, general and regional levels receive financial incentives for keeping store expenses down. Managers are also pressured to encourage employees not to record all work time, work without breaks as well as understaffing stores. Wal-Mart has 111 super centers and discount stores and 27 Sam’s Club stores throughout Illinois, according to a Wal-Mart spokesman. The complaint does not say where the plaintiff lives or at what store she worked, though the Aledo and Moline, Illinois’ Wal-Mart stores are both mentioned in the lawsuit. Wal-Mart spokesman Bill Wertz denied the accusations, saying it is against company policy as well as the law to request or intimidate employees to work without being paid. “Wal-Mart is a discount store, and to offer the lowest prices, we try to keep costs down, but not at the expense of the employee,” Mr. Wertz said. Wal-Mart encourages employees who are intimidated or forced to do such unpaid work to report it through an “open door” policy by going to a higher level of management than where the problems are, Mr. Wertz said. He also said that supervisors who force or intimidate employees to work without reporting the time could be punished and even fired. Wal-Mart faces similar suits in other states, reports Mr. Wertz. Note: The Wal-Mart Litigation Project does not encourage class-action suits; we simply gather information about lawsuits.

Former Wal-Mart Employees Seek Lost Overtime — Class-Action Suit — Iowa. Wal-Mart “brainwashes” its employees into working overtime without pay, say former workers in a class-action lawsuit filed in Clinton County Circuit Court, Clinton, Iowa. The plaintiffs claim lost pay and other damages on behalf of all Wal-Mart employees in Iowa. “Employees are told to be ‘team players’ and give up earned wages for mother Wal-Mart,” the lawsuit states. The plaintiffs claim that Wal-Mart gives employees work assignments that are impossible to complete within scheduled hours and then pressures workers to complete them anyway. Wal-Mart officials dispute the claims. Note: The Wal-Mart Litigation Project does not encourage class-action lawsuits; we simply gather information about lawsuits.

EEOC Sues Wal-Mart Over Harassment Claims — Alabama. Wal-Mart is being sued by the Equal Employment Opportunity Commission over allegations of sexual harassment of female workers in Alabama. The lawsuit alleges that Wal-Mart violated a federal civil rights law when it failed to prevent the sexual harassment of women by a co-worker at the Mobile, Alabama Wal-Mart store. Wal-Mart has denied showing bias against employees.

Wal-Mart Settles EEOC Age-Bias Suit — Illinois. The Equal Employment Opportunity Commission announced in July that a $55,000 settlement had been reached in an age discrimination and retaliation lawsuit filed in federal court in Chicago against Wal-Mart on behalf of a 51-year old Cecero, Illinois woman. The plaintiff, a former Wal-Mart customer services manager, was 47 years old when she was passed over for a promotion to head customer services at the Hodgkins, Illinois store because of her age, EEOC lawyer Tana Lin said. The plaintiff said that she had performed the duties of the position in the past. A younger woman got the job. “She was making $11 per hour, and I was making $8.75,” the plaintiff said. When the plaintiff complained to her supervisor, she was demoted to floor associate and her hourly wage was cut by 50 cents. After Wal-Mart refused to reinstate her to her original customer service position, the plaintiff filed an age discrimination complaint with the EEOC. Wal-Mart retaliated by firing her, the EEOC said. Bill Wertz, spokesman for Wal-Mart, said that a large percentage of Wal-Mart’s associates are over age 55. He called this case an isolated incident. The manager who fired the plaintiff is no longer with Wal-Mart, Wertz said. As part of the settlement, Wal-Mart pledged to have antidiscrinimation retraining of all supervisors who work in Chicago-area stores supervised by the district manager who oversaw the Hodgkins store, Lin said.

EEOC Sues Wal-Mart Over Firing of Disabled Worker — Arizona. On June 21 in Phoenix, the Equal Employment Opportunity Commission filed its 16th federal lawsuit against Wal-Mart for unlawfully firing a disabled employee after refusing to let her sit while working as a people greeter. This latest lawsuit says that Wal-Mart discriminated against a female employee who cannot stand for extended periods because of knee problems. Wal-Mart denied the employee’s request to occasionally sit while working as a greeter at its store in Peoria, AZ, and later fired her, the suit claims. Wal-Mart said that it doesn’t discriminate against disabled employees. Note: On June 13, Wal-Mart was ordered to air commercials in Arizona admitting it violated the ADA after a federal judge ruled that Wal-Mart didn’t fulfill terms of the settlement of an EEOC suit over Wal-Mart’s refusal to hire two deaf men.

EEOC Sues Wal-Mart for Refusing to Hire a Job Applicant Who Uses a Wheelchair — Missouri. On August 8, the Equal Employment Opportunity Commission sued Wal-Mart Stores, Inc., alleging that the Wal-Mart store in Clinton, Missouri violated the Americans with Disabilities Act when it refused to hire a job applicant who uses a wheelchair. The complaint, filed in federal court in Kansas City, alleges that the store failed to hire or even accept a job application from a male applicant, age 61, because of his disability, post-polio syndrome. The lawsuit seeks lost wages and benefits, unspecified compensatory and punitive damages, and a job for the job applicant whose affliction limits his ability to walk. “He simply applied for a job, any job, and they told him they didn’t want to have people in wheelchairs as greeters,” said Robert Johnson, regional attorney for the EEOC’s St. Louis office. “He was willing to consider other positions as well, but they wouldn’t consider him for anything.” Bill Wertz, a spokesman for Wal-Mart, said that Wal-Mart denies turning the job applicant away because of his disability. “We disagree with the allegations of the EEOC,” he said. “...As a company, Wal-Mart employs a large number of disabled people, and certainly we have no policies that discriminate against them in any way.” The lawsuit is the 17th legal action taken by the EEOC since 1994 against Wal-Mart under the disabilities act. Five of the suits have been resolved and the other complaints are pending, according to the EEOC.

Consumer Protection Office Fines Wal-Mart $10,000 — Not Pricing Individual Items — New York. A Wal-Mart store in the Cortlandt Town Center, Mohegan Lake, New York, was fined $10,000 by the Westchester County Office of Consumer Protection for violating the county’s law of pricing individual items. The fine comes after the Wal-Mart store failed six inspections by the Westchester County Office of Consumer Protection during a three-year period. Government inspectors found that although store managers constantly promised to rectify the problem, the Wal-Mart store repeatedly failed to mark prices on individual items. According to Westchester County law, retailers can be fined up to $1,000 per unmarked item. “Wal-Mart’s lack of compliance shows a total disregard for their consumers, and the public should be aware of their attitude,” Westchester County Executive Andrew Spano said. County officials said inspectors from the Office of Consumer Protection visited the store just before it opened in May, 1998 to explain county law. After the visit, the county sent a letter that outlined pricing requirements. When Wal-Mart was inspected six months later, the store failed and was fined $500. It failed inspection again in March, 1999 and was fined $2,500. The store failed again in May and October, 1999 and was fined $5,000 each time. During another inspection in June, 2000, the Wal-Mart store again failed and was fined another $5,000.

Shoplifting Suspects Sue Wal-Mart for Racial Bias — Animus of Clerk May be Imputed to Store Manager — Ohio. Two Wal-Mart shoppers can sue for race discrimination after they were removed from the store on suspicion of shoplifting, even though the manager who made the decision was unaware at the time that one of the shoppers was black, the 6th U.S. Circuit Court of Appeals has decided. A U.S. District court judge determined that the shoppers could not establish an intent to discriminate. On that basis, the lower court directed a verdict in favor of Wal-Mart on the shoppers’ claim of race discrimination under 42 U.S.C. §1981 which protects the right to contract in both commercial and employment settings. But the 6th U.S. Circuit Court of Appeals reversed the lower court’s decision, determining that the discriminatory animus exhibited by a store clerk who made the shoplifting accusation could be imputed to the store manager for purposes of establishing a prima facie §1981 claim. In reaching this decision, the 6th Circuit adopted a prima facie standard for §1981 claims in the commercial context. The circumstances giving rise to the case arose on December 15, 1997 when two females, one black and one white, went together to the Wal-Mart store in Jackson Township, Ohio to buy Christmas presents. The plaintiffs claimed that a Wal-Mart employee acted in a manner that indicted a racial bias against the black plaintiff. The store employee allegedly offered the black plaintiff repeated assistance in an apparent effort to “keep an eye” on her. Both plaintiffs asserted that the white plaintiff never received similar offers of assistance from the employee. When the employee suspected shoplifting from the black plaintiff, she notified the manager who instructed her to call the police. Although shoplifting charges were not made, the plaintiffs were escorted out of the store by the police. Judge Karen Nelson Moore, 6th U.S. Circuit Court of Appeals, adopted the Callwood test as one that best accounted for the vagaries of a §1981 commercial establishment claim. “In a §1981 commercial establishment case, stated Judge Moore, “a plaintiff must prove: (1) plaintiff is a member of a protected class--proof-- one of the plaintiffs was black; (2) plaintiff sought to make or enforce a contract for services ordinarily provided by the defendant--proof--the plaintiff had selected merchandise to purchase, had the means to complete the transaction and would have completed the purchase had she not been asked to leave the store (3) plaintiff was denied the right to enjoy the benefits of the contractual relationship--proof--plaintiff was deprived of services in a hostile manner and in a manner which a reasonable person would find discriminatory. Judge Moore concluded that Wal-Mart’s employee’s suspicious conduct towards the plaintiff “arguably” created an intent to discriminate. The question then became whether the employee’s discriminatory animus could be imputed to the Wal-Mart manager. Wal-Mart argued that the doctrine of respondeat superior does not apply in a §1981 claim. However, Judge Moore cited a 1992 case from the 6th Circuit, Wilson v. Stroh Cos., for the proposition that the discriminatory animus of lower level employees can be imputed to decision makers for purposes of establishing a prima facie case of race discrimination where it can be shown that the discriminatory animus of the employee influenced the decision maker. Judge Moore also determined that the plaintiffs had demonstrated a “causal nexus” between the discriminatory animus apparently displayed by the employee’s and manager’s decision to have the police remove the plaintiffs from the store. It was concluded that the plaintiff presented sufficient evidence for a jury to find that the employee’s racial animus may be imputed to the store manager, according to Judge Moore. Lois Christian and Amer Edens v. Wal-Mart Stores, Inc., 2001 FED App. 0190P (6th Cir). John W. Mygrant and Valarie J.R. Young of Mentzer, Vuillemin & Aygrant, Akron, Ohio, for plaintiffs. Clifford C. Masch of Reminger & Reminger, Cleveland, Ohio, for Wal-Mart.

Wal-Mart Settles Civil Rights Suit — Racial Slur Written on Layaway Receipt — Virginia. Wal-Mart has settled a civil rights lawsuit filed by a black, Charlottesville, Virginia female customer. The plaintiff filed the suit in February, 2001 claiming that Wal-Mart “maliciously interfered” with her right to conduct business. On August 8, 2000, the plaintiff had paid the layaway deposit for a 19 inch television at the Wal-Mart store on Highway U.S. 29 in Albemarle County. The receipt the plaintiff received listed a racial slur instead of her proper address in a predominantly black, subsidized housing complex. The plaintiff’s attorney, John E. Davidson of Charlottesville, declined to disclose the terms of the settlement, which was reached July18, but said that the settlement did not require Wal-Mart to apologize or admit any wrongdoing. “It was very important to us that the plaintiff achieve some justice in this case, and she feels like she has. She feels comfortable that they will not let something like this happen again,” Davidson said. He added that the plaintiff plans to buy the television she put on layaway last year, and then likely will not shop at Wal-Mart again. Bill Wertz, Wal-Mart spokesman, has called the incident an “inexplicable, isolated action” and said in June that Wal-Mart had been “disrespectful” to the plaintiff. In its written response to the lawsuit, however, Wal-Mart denied that the incident rose to the level of violating federal law.

Wal-Mart Removed From KLD “ Socially Responsible” List. On February 1, 2001, Kinder, Lydenberg, Domini & Co., Inc. (KLD), a Boston research firm that advises investors on ethical issues, removed Wal-Mart from the Domini 400 Social IndexSM because Wal-Mart hasn’t done enough to ensure that its domestic and international vendors operate factories that meet adequate human rights and labor standards. Wal-Mart is the second company that KLD has removed from the list for vendor contracting problems; KLD removed Nike from the list in 1997. KLD based its decision on the following considerations: (1) Wal-Mart’s documented contracting with vendors that operate “sweatshops” or that were based in Myanmar (formerly Burma); (2) Wal-Mart’s contracting policies and practices; (3) Wal-Mart’s unresponsiveness to shareholders on this issue; and (4) Wal-Mart’s role as a market leader. KLD’s published report cites several specific actions that led to Wal-Mart’s removal from the socially responsible list: (1) In July 2000, the National Labor Committee reported that Wal-Mart Canada had been purchasing products from factories based in Myanmar through December 1999. These purchases seemed to contradict Wal-Mart’s stated policy to “favor vendors who have a social and political commitment to basic principles of human rights....” Wal-Mart Canada has since stated that it will no longer purchase from factories based in Myanmar. Wal-Mart USA’s position remains unclear. (2) An October 2000 article in Business Week reported that Wal-Mart lied about its involvement with the Chun Si Enterprise Handbag Factory, a sweatshop based in China which subjected its workers to 90-hour workweeks, beatings by factory guards, extremely low wages and prison-like conditions. Wal-Mart’s subpar vendor contracting policies and practices and its unresponsiveness to calls for change, amplified by its role as the retail giant, convinced KLD that Wal-Mart’s removal from the list was the most appropriate course of action.

Wal-Mart to Pay $1 Million Fine to End Pollution Charges. On June 7, the Justice Department and the Environmental Protection Agency reached a settlement with Wal-Mart Stores over allegations that Wal-Mart violated the Clean Water Act at 11 construction sites in Texas and six sites in New Mexico, Oklahoma and Massachusetts. The EPA alleged that Wal-Mart and 10 of its contractors failed to comply with storm water regulations and illegally discharged pollution from several construction sites, federal officials said. Wal-Mart spokesman Bill Wertz said that the 17 sites in question are a small fraction of the 300 to 400 new stores that Wal-Mart builds each year. According to the Justice Department, this is the first federal enforcement action against a company in connection with multistate violations of the Clean Water Act’s storm water provisions. Wal-Mart concedes that storm water runoffs occurred at several construction sites, but denies the accusations that any runoff found its way into streams and lakes or that it contaminated drinking water. Under the settlement, Wal-Mart and 10 of its contractors agreed to pay a $1 million civil penalty and also will establish an environmental management plan to improve its compliance with environmental laws at its construction sites and to minimize the impact of its building on streams and watersheds. The Justice Department put the cost of this environmental management plan at $4.5 million; however, Wertz said that the firm believes the cost will be substantially less than that. Under the agreement, Wal-Mart will also require construction contractors to certify that they have taken steps to control storm water runoff before they break ground. Wal-Mart promised to oversee the construction sites more carefully, conduct tests to monitor storm water pollution and report the results to the EPA.

Wal-Mart Told to Pay Service Vending Company $51.5 Million — Missouri. On June 20, a jury in Mount Vernon, Missouri, returned a $51.5 million verdict against Wal-Mart when Wal-Mart suddenly terminated its contract with Service Vending Company. Wal-Mart did so after a disaffected former employee of Service Vending accused the vending company of misappropriating funds, according to Service Vending’s attorney, James W. Newberry. “The allegations turned out to be baseless, but Wal-Mart handed us the pink slip.” The jury awarded $1.5 million in actual damages and $50 million in punitive damages. Since 1992, the Aurora, Missouri-based Service Vending supplied Wal-Mart with 7,008 vending machines in 400 stores in 13 states. In September 1998, Wal-Mart terminated the contract and required Service Vending to remove its machines from Wal-Mart property 10 days after the agreement was terminated. Newberry said that the contract termination was not at issue in the trial, but that Wal-Mart’s actions after the agreement had ended were. According to Newberry, the vending company was in negotiations to sell its equipment in 275 stores to Store Servic, Inc., which was going to handle vending services at those Wal-Mart stores. However, Wal-Mart required that Service Vending remove the equipment from those stores before it could be sold. This requirement made the deal unattractive, and the equipment sale fell through. Service Vending then sued Wal-Mart, charging tortious interference with prospective business advantage. Wal-Mart attorney, Todd Guthrie, said that while the contract called for the equipment to be removed in 10 days, an extension was granted to 30 then 60 days, which he said showed good faith. Wal-Mart will file post-trial motions to set aside the verdict, said company spokesperson Bill Wert. Service Vending Co. v. Wal-Mart Stores Inc., Circuit Court, Lawrence County (MO) Case No.____. James W. Newberry of Newberry, Haden, Cowherd, Bullock, Keck & McGinnis, Springfield, MO, for plaintiff. Todd Guthrie, Bentonville, AR, for Wal-Mart.

Wal-Mart Sued for Sex Discrimination — Class Action Status Sought — California. On June 19, six current and former employees of Wal-Mart filed a suit against the company alleging discrimination against women in pay, compensation and promotion. The suit, which seeks class-action status, claims that Wal-Mart is not only the industry leader in size, “but also in its failure to advance women.” The six named plaintiffs, who are from California, Texas, Ohio, Illinois and Florida, claim Wal-Mart advances male employees more quickly than female employees, denies female employees equal job assignments, promotions, training and compensation, and has retaliated against women who have spoken out against these practices. In alleging a pattern of discrimination, the suit points out that 72% of Wal-Mart’s hourly workers are female, but only a third of the managers and supervisors are women. Meanwhile, at Wal-Mart’s top 20 competitors, women make up 56% of the supervisory and managerial ranks, according to U.S. Labor Department statistics cited in the lawsuit. The plaintiffs claim that they were subjected to a pattern of discrimination that included being told women do not make good managers and that women with children could not be managers. The plaintiffs also claim that they were passed over for manager positions by male colleagues who were less qualified. The potential class, which the plaintiff attorneys claim could be as high as 500,000 women, includes all present and former female employees of Wal-Mart’s retail outlets, including Wal-Mart discount stores, supercenters, neighborhood markets, and Sam’s Clubs. If the lawsuit is granted class-action status, it would become the nation’s largest sex discrimination case against a private employer. The lawsuit was put together by a nationwide consortium of lawyers and public-interest law firms after a year of investigation. The group set up a web site, com, and toll-free telephone number, 1-877-966-2696, to solicit additional grievances and evidence. The suit seeks unspecified damages, including wages lost due to alleged discrimination. A Wal-Mart spokesman said that the company condemns any kind of discrimination and has a record of taking disciplinary action, up to firing, against employees who violate that prohibition. “We feel very confident about this lawsuit,” said Wal-Mart spokesman Bill Wertz. Betty Dukes, Patricia Surgeson, et al v. Wal-Mart Stores, Inc., U.S. District Court, Northern District of California, Case No.____. Brad Seligman of the Impact Fund, Berkeley, CA, Shelia Thomas and Doris NG of the Equal Rights Advocates, Steve Stemerman and Elizabeth Lawrence of Davis, Cowell & Bowe, Joseph Sellers and Deborah Vagins of Cohen, Milstein, Hausfeld & Toll, Stephen Tinkler and Merit Bennett, Jonathan Smith and Debra Gardner of the Public Justice Center, for plaintiffs. Note: The Wal-Mart Litigation Project does not encourage class-action suits. We simply report the information.

PBS Special: “Store Wars: When Wal-Mart Comes to Town”. Focusing on Wal-Mart’s impact on small towns, PBS aired, in June, documentary flimmaker, Micha Peled’s, “Store Wars: When Wal-Mart Comes to Town”. The documentary followed, over the course of a year, the story of Ashland, Virginia’s fight to block the building of a Wal-Mart megastore on the edge of town. Residents were bitter over the prospect of bringing Wal-Mart into the quiet town, and a grassroots group, the “Pink Flamingos,” sprang into action. Residents opposed to Wal-Mart claimed that the megastore would destroy the small-town atmosphere, increase traffic, take business away from local retailers, and provide only low-end minimum-wage jobs. Opponents also sensed that dollars spent at Wal-Mart would not be recycled into Ashland. Supporters of Wal-Mart argued that the megastore would provide increased tax revenues, low prices, the convenience of one-stop shopping, and new jobs. “Store Wars” focuses on the “Pink Flamingos” struggle to organize protests against Wal-Mart and raise awareness about the issue, despite the fact that most of its members have never participated in any kind of organized protest before. In response to resistance among Ashland citizens, Wal-Mart sent in lawyer Jay Weinberg of Richmond who had previously fought and won similar battles in four other U.S. towns. Ashland Town Council voted 4 to 0 to allow Wal-Mart to build its megastore. Battles to halt construction of Wal-Mart stores can be found throughout the country’s small towns, including Cullman, AL; Plymouth, NH;Hagerstown, MD; Henderson, KY; Meridian, MI; and Longview, TX.

United Food and Commercial Workers Local 367 Steps Up Against Wal-Mart Expanding into Retail Grocery — Requests Public Hearing to Present Case — Washington State. In June, city officials of Chehalis, Washington concluded that Wal-Mart’s proposed expansion will cause no significant negative impact on the local economic environment and have issued a Determination of Non-Significance under the Washington State Environmental Policy Act. However, the UFCW local 367 presented Chehalis officials with a petition containing more than 270 signatures of Lewis County residents requesting a public hearing from the Board of Appeals to present the union’s case. The UFCW’s primary complaint against Wal-Mart is that it will destroy family wage jobs in the community due to its competitive advantage regarding the money it saves as a nonunionized store. UFCW defines a family wage job as one that “enables a worker to provide food, adequate housing, health insurance and amenities to his/her family, and one that provides that worker with a decent retirement plan”. Unionized grocery workers who work 80 hours per month become eligible for full family coverage after three months. The employer pays the full premium amount and covered employees do not pay a deductible. The Wal-Mart Health Plan coverage is available to employees who work 28 hours per week, the employee must contribute $1,000 to the premium, and the lowest deductible is $350 per person, or $1050 for three or more people under family coverage. The UFCW reports that the average hourly wage for long-term Wal-Mart employees is $8.47. Unionized employees who work 2.5 years earn at least $11.25 per hour, and sometimes as much as $18.05 depending on the type of work. Additionally, Wal-Mart does not offer an employer-funded retirement plan. The UFCW expects Wal-Mart to undersell local grocers because of both its purchasing power and the notion that “labor costs have a significant impact on prices” given the traditional 3 percent profit margin in the grocery industry. The UFCW concludes that 82 full-time retail grocery jobs will be lost as a result of Wal-Mart’s expansion into retail grocery. An appeal hearing is scheduled for July or August.

Wal-Mart Reaches Settlement in Pricing Complaint — Wisconsin. Wal-Mart has agreed to comply with Wisconsin’s fair pricing law to settle a complaint filed by the state last year alleging that Wal-Mart was selling some items below cost to drive out competitors. Wisconsin law forbids stores from selling items below cost if they are doing so to unfairly attract business from competitors. The state charged Wal-Mart last year with illegally cutting prices at stores in Beloit, Oshkosh, Racine, Tomah and West Bend, Wisconsin. Bill Oemichen, the Wisconsin Trade and Consumer Protection administrator, said that Wal-Mart had been warned four times since 1993 to stop the practice of violating the state’s fair pricing law before the state filed the complaint. He said that Wal-Mart would use below-cost prices on dairy, tobacco and cleaning products to attract customers to its stores. Wal-Mart did not admit any wrongdoing in the settlement announced on August 13 and will not pay a penalty. However, if Wal-Mart violates the agreement during the next year, it could pay double and triple the regular fines. As part of the settlement, Wal-Mart will (1) make a $15,000 donation to a high school consumer education contest — the cost of Wisconsin’s investigation; and (2) create an internal price tracking system that state auditors can examine to ensure it is complying with the agreement. Wal-Mart spokesman Bill Wertz said that the system is in place, and the agreement would not fundamentally alter the way Wal-mart does business. “We have made some changes to our record keeping in Wisconsin and reiterated our desire to price our products as low as possible within the law,” Wertz said. Wal-Mart operates 74 Wal-Mart and Sam’s Club stores in Wisconsin, employing nearly 21,000 people.

Wal-Mart Faces Unfair Labor Practices Suit — Class-Action Status Sought — New York. On August 9, a former Wal-Mart employee filed a lawsuit against Wal-Mart alleging that Wal-Mart systematically avoids paying workers for overtime and for hours worked during breaks. The plaintiff worked as an hourly employee from May 1995 to May 1996 at a Wal-Mart store in Centereach, New York. The lawsuit alleges that the plaintiff and other employees were locked in the store each night for as many as two unpaid hours after it closed. The employees were not permitted to leave and instead were told to re-stock merchandise, count the money in cash registers and perform other duties while managers inspected each department. The plaintiff claims that she was required to attend unpaid meetings and training sessions, sometimes on her off-days. The lawsuit also alleges that Wal-Mart managers pressure employees to work unpaid hours through intimidation and threats of discharge and demotion. The complaint does not specify the amount of damages, but seeks restitution and back pay for the employees, attorneys for the plaintiff said. A national hotline (800-655-3085) has been established to provide information about this case and/or for employees to report that they have been subjected to such practices by Wal-Mart. Information can also be found at the plaintiff’s attorney’s website: The lawsuit seeks class-action status for about 20,000 current and former hourly employees at 83 Wal-Mart stores in New York state. Similar suits have been filed against Wal-Mart in 11 other states. Marie Gamble, etc. v. Wal-Mart Stores, Inc., etc., Supreme Court, Manhattan, New York (NY) County, Case No. 01603980. James, M. Finburg, Eve H. Cervantez, and Rachael Geman of Lieff Cabraser Heimann & Bernstein, LLP, New York and Adam T. Cline, Outten Golden and Scott Moss, New York, for plaintiff.

January 2001

* Do “Assistant Managers” Have “Full Authority” to Settle Claims? In New Mexico, when the court orders a mandatory settlement conference, the adjuster or person with authority to settle a case must show up. At a recent case, a Wal-Mart lawyer showed up at a mandatory settlement conference with “an Assistant Manager” of a local store. Wal-Mart refused to offer anything to settle the case. The plaintiffs have filed a motion for sanctions for failure to participate in good faith and failing to have an adjuster present. Wal-Mart has responded with an affidavit from the “Assistant Manager” saying she had “full authority to settle the plaintiff’s claim.” Because this is contrary to known experience with Wal-Mart, readers of this message are asked to provide the Wal-Mart Litigation Project with affidavits from other cases in which Wal-Mart has stated one way or the other whether “Assistant Managers” have settlement authority. Plaintiff’s counsel James R. Toulouse of 2403 San Mateo NE Suite 9-West Albuquerque, NM 87110 (505) 884-5000 has special interest in receiving such information.

* Say, Do You Have Any “Furby” Riot Lawsuits? Yes, and frankly we’re getting tired of sending them out – they appear under the topic of “Crowd Control” in the Wal-Mart Litigation Taxonomy. So here they are for everyone to see. Here’s what happened. In late November, 1998, Wal-Mart advertised a Christmas promotion involving a popular toy called “Furby.” The little big-eyed varmit was the “hit” toy of the season. Naturally, crowds waited eagerly for Wal-Mart doors to open all over the country. What happened next is the stuff of lawsuits. Each store had only about 25 to 50 of the toys and as many as 200 people waiting to get them. In the rush to get the toys, people got injured. Most were simply knocked down by other patrons.

Because Tennessee has a one-year statute of limitations for personal injury cases, some of the first cases were filed in Tennessee. Apparently, the first two were Sherry Smith v. Wal-Mart, Inc., U.S. District Court, Nashville No. 3-99-340 and Jacquiline Dyer v. Wal-Mart, U.S. District Court, Nashville No. 3-99-339. The Dyer case involved a young girl who suffered a knee injury; according to court records the case has been settled, but the terms are not disclosed. Both cases were filed by Nashville attorney Joseph M. Dalton, Jr. 222 Second Avenue North Suite 350 M Nashville, TN 37201. Dalton later filed another “Furby” case, Sally Willemain v. Wal-Mart, U.S. District Court, Nashville No. 3-99-560 (Filed June 24, 1999). Another known Tennessee case was filed on November 16, 1999 by Yvonne D. Hill, an attorney located at P.O. Box 852 Kingston, TN 37763. The Wal-Mart Litigation Project has been unable to tell whether this case was removed to federal court by Wal-Mart. The suit alleged that the store manager of the Rockwood, Tennessee told customers that he only had 24 Furbies and began to throw them out by the handful and in the riot the plaintiff was thrown to the floor by another customer. Tammy Coleman v. Wal-Mart Stores East, Inc., Roane County (TN) Circuit No. 10015.

Because most states have a two-year statute of limitations, other Furby cases began to be filed in November, 2000 – after it became clear that customers injured would not receive acceptable settlements for their injuries. Other cases include Danny Hambrick and Kathryn Hambrick v. Wal-Mart Stores, Inc., and Wal-Mart Stores East, Inc., U.S. District Court, Middle District Court of Georgia (Athens) No. 3-00-142. (Plaintiff’s attorney unknown.) Donna Marie Unangst and Judy Roccosanto v. Wal-Mart Stores, Inc., Court of Common Pleas, Northhampton County, Pennsylvania, No. unknown. Filed on July 14, 2000 by Ralph J. Bellafatto, 5201 William Penn Highway, Easton, PA 18045. Lawyers who have other “Furby” cases pending are urged to send photocopies of the complaints to the Wal-Mart Litigation Project.

* CBS “Sixty Minutes” Hits Wal-Mart’s Tactics in Failing to Disclose Information About Parking Lot Assaults. Broadcast on January 7, 2001, television’s original investigative news show, “Sixty Minutes” featured a piece on Wal-Mart. The topic was Wal-Mart’s failure to comply with discovery requests involving criminal assaults in its parking lots. The famous “survey” (not study) has been a topic of several articles in legal newspapers, notably the National Law Journal. The television piece featured a judge, Sharolyn Wood, who was not happy with Wal-Mart; Roger McClung, a Tennessee man whose wife was abducted and killed outside a Memphis store; and Bruce Kramer, McClung’s lawyer. No one appeared live for Wal-Mart, but a video clip of Dave Gorman, Wal-Mart Vice-President of Security, was shown. Gorman said that he didn’t have room for everything so he “just throwed it away.” To order a copy of the transcript, contact Burrelle’s at 1-800-777-8398.

* Wal-Mart Claims to Have “Mended It’s Ways” in Discovery Disclosure, According to National Law Journal. In a front page, above-the-fold article in the widely-read National Law Journal, Wal-Mart asserts that it has taken steps to ensure that in the future there will be no “hidden” or “destroyed” evidence in personal injury lawsuits. The article was written by long-time reporter Bob Van Voris, who has written a series of articles about Wal-Mart’s litigation tactics and has incurred the company’s ire in doing so. According to the National Law Journal, a mega-law firm was hired to review Wal-Mart’s discovery process and how it manages litigation generally. According to a partner in the law firm, Jeffrey S. Sutton (Columbus, Ohio), “They’ve devoted considerable resources to addressing this problem. My sense is, they’re on the right track.” According to Wal-Mart, there were ten sanctions against the company in 2000 compared with 22 in 1999 and 20 in 1998. The article is: “Wal-Mart Mending Its Ways? – Retailer Vows to End Discovery Irregularities; Still, Charges Persist,” The National Law Journal (January 17, 2001), page 1.

* Every Lawyer Who Plans to File a “Falling Merchandise” Case Against Wal-Mart Should Read This Article. The article is called, “Falling Merchandise.” It was written by Denver, Colorado attorney Jeffrey A. Hyman and an associate, Molly E. Homan, in the law firm of Lohf, Shaiman. It is an outstanding overview of the law by attorney Hyman, who was one of the pioneers in the area of litigating falling merchandise cases, notably the Scharrell case (Colorado). The article was published in the January 2001 issue of Trial magazine at page 44. A copy of the article should be available in most law libraries or from the Association of Trial Lawyers of America, 1050 31st St. N.W., Washington, DC 20007-4499. (The Wal-Mart Litigation Project is unable, due to copyright restrictions, to provide copies of the article.) This is the second in a series of articles about stores like Wal-Mart and their litigation tactics published by ATLA. Another excellent article is by Gilbert T. Adams, III & Alto V. Watson, III, “Big Box Retailers: Discovery Abuse,” Trial (April, 2000) p. 38.

* New York Farmer Sues Wal-Mart Claiming Construction of a Distribution Center Destroyed His Water Supply. A Mohawk, New York dairy farmer has sued Wal-Mart alleging that the construction of a $60 million, 868,000 square foot regional food distribution center has destroyed the subterranean aquifer, which was the source of two spring-fed reservoirs on his property. The suit by Richard Blowers and his wife was filed by attorney Salvatore D. Ferlazzo and seeks $15 million dollars.

* Wal-Mart Doesn’t Want to Pay Full Property Taxes, Claiming It is Located in an “Enterprise Zone.” Despite a ruling from the Missouri State Tax Commission that Wal-Mart is not located in an “Enterprise Zone” and thus due a tax abatement, the company has filed suit in Butler County, Missouri, challenging that decision. Wal-Mart’s suit was filed by local lawyer Jerry Merrell in conjunction with Seigfried, Bingham, Levy, Selzer, and Gee of Kansas City. Meanwhile, a similar dispute has erupted in Oneida, New York. The city has assessed the store there at $10,714,200 but the company says it’s only worth $4,817,050. The problem in Oneida, according to the local assessor’s office, was that Wal-Mart was not forthcoming in providing the city with a professional assessment of the property.

A note from the Wal-Mart Litigation Project to producers at “Sixty Minutes” and rival television programs: Wal-Mart has a practice of challenging its propery tax assessments and winning. That is, it usually “outguns” the local city attorney in court with its powerful array of expert witnesses and lawyers. Thus, while in some small counties Wal-Mart may be the single largest property tax payer, it always seeks to maintain “Everyday Low Prices” by keeping its property taxes as low as possible. It has every legal right to do this, at the same time saying it doesn’t have a duty to provide active security in its parking lots, “because that’s the sheriff’s job.”

* Jacksonville, Texas Wal-Mart Store Subject to Complaint Filed With NLRB. The United Food and Commercial Workers Union (UFCW) has filed a complaint with the National Labor Relations Board saying two employees were fired for engaging in lawful union organizing activities. A union press release compares the firings to “work-place ethnic cleansing.” The company said the employees had been “coached” many times and repeatedly failed to follow company rules.

* Washington State Revokes Wal-Mart’s Privilege to Manage It’s Own Workers’ Compensation Claims. For the first time, a major employer is losing its privilege to manage its own workers’ compensation program for not paying proper benefits to its injured workers. The Washington state Department of Labor and Industries announced on December 6, 2000 that on March 15, 2001 it would begin managing Wal-Mart’s more than 300 currently open claims. Wal-Mart has been self-insured in Washington since 1993. Labor and Industries found Wal-Mart was preventing workers from receiving benefits they’re entitled to when injured on the job. Since 1994, the department has issued Wal-Mart 66 penalties totaling more than $31,000. Those penalties primarily were for delaying time-loss payments to injured workers and failing to accept or deny a claim within 60 days, as required by Washington state law. The department’s laundry list of problems with Wal-Mart included: (1) Repeated failure to allow injured workers to file an accident report. (2) Failing to pay time-loss untile directed by the department. (3) Unreasonable delays in making initial time-loss payments and continuing those payments. (4) Prematurely and inappropriately terminating time-loss compensation to injured workers. Wal-Mart Stores, Inc. has 27 locations in Washington, including two Sam’s Club stores and McLane Trucking Company, Inc. Wal-Mart was expected to appeal the department’s decision. Washington state Wal-Mart employees with questions were told to call the department at (360) 902-6901.

* Wal-Mart Won’t Allow Photographs of its Ammonia Storage Facility, Complains Wisconsin Emergency Management Director. Cindy Struve, an official with the Monroe (WI) County Emergency Management program have complained that Wal-Mart won’t give her permission to take photographs of the ammonia storage facility at the Tomah (WI) Wal-Mart Distribution Center. The photos are needed for the program to complete its offsite facility plan and comply with the the federal Emergency Planning and Community Right to Know Act. Struve also complained that Wal-Mart has not fully notified her office of chemical spills that had occurred on the property – events she learned about when reported to her office by a worried Wal-Mart employee using the agency’s reporting hot-line.

* Wal-Mart Gets Complaints From Neighbors About Noise and Bright Lights at Supercenters. Too bad, because it usually wins these disputes. The Oklahoma City Board of Adjustment has granted Wal-Mart Realty the right to hang a sign much larger than originally planned for the site of its Neighborhood Market in northwest Oklahoma City. The Board voted 3-2 in favor of Wal-Mart. Meanwhile, a Santa Rosa (FL) code enforcement officer has ticketed the Pea Ridge Wal-Mart Supercenter for shining too much light on neighboring homes. Shields the county required on the lights were taken down a month ago, and the code official had told the company to reinstall them. “All we’re asking is that the direct glare not go off their property,” said county attorney Tom Dannheisser. Meanwhile, the loudspeaker in the garden department of the Oakland (MD) Supercenter is so loud that neighbors can hear “Team One’s” speaker, complain neighbors of the store. And the lights are so bright that they can walk in the woods nearby at night without a flashlight.

* When An Adjuster for Wal-Mart Failed to Appear at a Pre-Trial Settlement Conference, the Judge Ordered Wal-Mart General Counsel or Some Other Corporate Officer With Litigation Policy Authority to Attend the Trial. A federal district court in Michigan ordered Wal-Mart to engage in a pre-trial settlement conference pursuant to its authority under FRCP 16. Wal-Mart’s local attorney and an assistant store manager showed up for that conference, but announced that they had nothing to offer in view of Wal-Mart’s “no settlement” policy toward plaintiffs. The judge entered a subsequent order that required Wal-Mart’s general counsel or some other corporate officer with litigation policy authority to attend the trial. The judge found that an across-the-board “no settlement” policy frustrated the purpose of FRCP 16 to encourage good faith settlement negotiations. In this case, the judge had already denied Wal-Mart’s summary judgment motion, thus there were genuine fact issues that Wal-Mart should have considered regarding settlement, rather than hiding behind its policy. The federal judge took into account Wal-Mart’s removal to his court under federal removal jurisdiciton. Because Wal-Mart voluntarily sought out the the jurisdiction of the federal court, the judge found that Wal-Mart’s “no settlement” in pre-trial conferences violated the policies underlying the federal rules of civil procedure as well as local court rules. The case is Sedden v. Wal-Mart Stores, Inc., 196 F.R.D. 484 (E.D. Michigan, 2000). Note from the director of the Wal-Mart Litigation Project: This will soon become one of the most-cited Wal-Mart related cases. We thank Bob Estes of Fayetteville, Arkansas for alerting us to this case. His e-mail address is bobestes@arkansas.net.

* Just How Many Adjusters Per Store and Per Million in Sales Does Wal-Mart and Claims Management, Inc. Have? It appears that in 1996 there were 2,669 Wal-Mart related stores; this had grown in four years by 316 to 2,985 in year 2000. In 1996, Wal-Mart’s “independent” adjuster, called Claims Management, Inc., had 156 adjusters handling casualty (customer accident) and job-related injuries. By year 2000, this had increased by 31, to 187 people. In looking at the data for domestic sales for the period 1996 through 1999, we find that the company’s adjusters amounted to one for every $640,000 in sales in 1996, but this had gone to one for every $912,000 in sales by 1999.

* Why There Came to Be No “Wholesales” in the Name of “Sam’s Wholesale Club” in North Carolina. Long ago, back in the days when the company still advertised that all its goods were “Made in America,” a Wake (NC) County, North Carolina judge entered a preliminary injuction barring Sam’s Wholesale Club from using the word “Wholesale” in the stores’ name. The July 18, 1990 ruling came because Sam’s was not a true wholesaler under state law and because it charges retail sales tax on most merchandise. The parent company says the change would cost it $163,000 in direct costs in North Carolina alone, where it had five Sam’s stores. On December 3, 1990 the company entered a consent decree agreeing to stop using the name on stores. The suit was brought by the consumer protection division of the North Carolina attorney general’s office. Proof at the preliminary injunction hearing showed that the stores did not meet the definition of a wholesale as it existed under North Carolina law, largely because it pays retail sales tax on 90% of its sales. Wal-Mart maintained that it was a wholesaler because its prices are like those of wholesalers, and that most of its sales go to small-business owners, restaurants, and service stations. The company’s competitors do not use the word “wholesale” in their names. Th case is State of North Carolina ex rel Lacy H. Thornburg, Attorney General v. Wal-Mart Stores, Inc., a Delaware Corporation, d/b/a Sam’s Wholesale Club, Wake (NC) Superior Court Div. No. 90-CVS-05915. (Judgment by Consent, December 3, 1990). David N. Kirkman, assistant attorney general for the state; A. L. Johnson, vice-chairman, Wal-Mart Stores, Inc., and chief executive officer, Sam’s Club. Now it’s just “Sam’s Club,” in North Carolina – and everywhere else, we think.

* Wal-Mart and Office Max Settle Item-Pricing Suit Brought by Michigan Attorney General. The lawsuit mentioned in the October, 1999 Current Legal Developments has been settled. Michigan’s attorney general Jennifer M. Granholm and a state consumer affairs official have announced that Wal-Mart will pay a $250,000 civil penalty and Office Max will pay $125,000 plus $25,000 for the cost of the investigation, for failure to comply with the state’s item-pricing law. The settlement stems from allegations that Wal-Mart and Office Max failed to affix price tags to the mechandise within some of their stores.

* Below Cost Selling Charges Leveled Against Wal-Mart by Wisconsin Officials. The Division of Trade and Consumer Protection has filed a complaint against Wal-Mart for selling milk, butter, cigarettes, laundry detergent and other items below cost at its stores in West Bend, Racine, Beloit, Tomah, and Oshkosh. The action was triggered by complaints that as Wal-Mart expands into the grocery business, its actions were hurting other discount grocers. Wal-Mart spokesman William Wertz said, “We did not take the initiative in lowering prices below cost,” but said the company has done a poor job of record-keeping to prove its point. Wal-Mart’s prices were in response to those of its competitors, and Wertz said the state should look at competitor’s practices too.

* It’s Old News Now, But There Was Nothing Wrong With Wal-Mart Insisting That its In-Store Santa’s be Men. The story of Marta Brown, the Kentucky woman who claimed she was not allowed to be a Santa in the Morganfield, Kentucky store in 1995 because she was a woman, got widespread media coverage. The company won Brown’s discrimination case in October, 2000. It seems Brown refused to wear wear padding to appear more Santa-like and she was removed from the role after a customer complained that her child asked why Santa had breasts. “We originally had allowed her to play Santa Claus and only switched after children detected she was a woman, so we never intended to discriminate against her,” said Wal-Mart spokesman William Wertz.

* Benton (AR) County (Yes, Home of Wal-Mart) Jury Smacks Company With $1.6 Million Verdict in Defamation and Invasion of Privacy Suit. A former Wal-Mart employee whose home was raided by company employees and local police to look for stolen merchandise has been awarded $1.6 million by a jury in the hometown of Wal-Mart, Bentonville, Arkansas. Wal-Mart will appeal. The unusual case of David Clark began when some 400 items were taken from his home and placed in his front yard in August, 1998. Clark repaired damaged merchandise for the company at a business he operated out of his home. He said that the seized items included property he had bought, electronic items he was repairing for other customers and goods Wal-Mart gave him outright. Clark was never charged with theft, and a judge ruled that only 37 items of those seized belonged to Wal-Mart. Clark was represented by attorney Bobby Odom.

* Price-Cutting Antitrust Suit Hits Wal-Mart in Oklahoma. Crest Foods has filed a federal antitrust lawsuit claiming that one of its stores was put out of business because a new Supercenter opened business by selling certain items below cost. The suit contains the unusual allegation that then Wal-Mart president David Glass personally played some role in the matter because he was seen at a Crest store personally scanning prices. Lawyers for Crest said they had obtained a copy of a Wal-Mart handbook that tells managers to ask employees of competitors to leave if they are recording price data in the store. The suit was filed in September in Oklahoma City.

August 2000

* Wal-Mart Obtains Restraining Order Against Former Employee Accused of Stealing Trade Secrets. On July 26, 2000 Wal-Mart Stores, Inc. obtained a restraining order against former employee Ralph James Coburn that prohibits him from accessing a private e-mail account and from using information about a Wal-Mart computer system in his new job. The restraining order was issued by Benton County, Arkansas Circuit Judge David Clinger. Judge Clinger further ordered that Coburn give Wal-Mart any hard copies of trade secrets or confidential information he had obtained from the company, and authorized the Benton Co. Sheriff’s Office to seize Coburn’s home computer. Wal-Mart has filed a lawsuit against Coburn, accusing him of transferring files regarding modifications to the company’s “Top End” computer program to a private e-mail account he had set up, and of removing confidential data from the company to benefit his new employer, Total Transaction Management. Wal-Mart maintains the modifications to the “Top End” program are trade secrets, and is seeking damages from Coburn. (Posted August 2000).