Small Businesses Pay Their Employees. Wal-Mart Doesn’t.

Date: 1 Feb 2003 | posted in: Retail | 0 Facebooktwitterredditmail

In December, an Oregon jury found Wal-Mart guilty of forcing employees in eighteen stores to work extra hours without pay. A separate jury will determine damages in the class-action lawsuit.

Employees testified that store managers used a variety of tactics to extract unpaid labor, including requiring employees to work after they had punched out for lunch, locking the doors at night to prevent off-the-clock employees from leaving until certain tasks were complete, and manipulating employee timecards.

Carolyn Thiebes, a former store manager, testified that she routinely docked overtime hours from workers’ paychecks at the direction of her supervisors and pushed employees to work more than 40 hours a week without pay to finish assigned tasks.

Wal-Mart insists such practices are isolated and are not part of a company-wide strategy. But several former store managers have described intense pressure from Wal-Mart headquarters to keep labor costs low. They say the company made it impossible to meet the requirements without forcing employees to work unpaid hours.

Indeed, lawsuits against Wal-Mart for unpaid work are now pending in at least 30 states. Wal-mart “has ridden the backs of its hourly employees to extreme profitability,” reads one suit filed in Michigan. In many towns, Wal-Mart controls most of the retail employment, leaving workers little choice but to accept its terms.

So far, Wal-Mart has settled out of court in two cases, reportedly paying $50 million in a class-action suit involving 69,000 employees in Colorado and $500,000 in a case brought by 120 workers in Gallup, New Mexico. The Oregon case is the first to go to trial.

With more than one million employees nationwide, Wal-Mart’s free labor could add up to tens of millions of dollars, harming retail workers and giving the company a significant illegal advantage over small businesses that pay employees their full due.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.