WASHINGTON, June 23 (UPI) -- As if it didn't have enough problems already, Wal-Mart is facing the prospect of confronting as many as 1.6 million angry women who currently work for, or have worked for, the retail giant.
The world's largest retailer had been juggling a number of negative issues over the past few years, from hiring illegal immigrant workers to underpaying their staff. But the latest legal battle, a class action lawsuit by current and former female employees for gender discrimination, could make legal history for the sheer size of the number of plaintiffs. It is to date the largest private employer civil rights case to date.
Six women filed suit in 2001 for being discriminated against their male counterparts, and won the battle as U.S. District Judge Martin Jenkins ruled Tuesday that "women working in Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time even for men and women hired into the same jobs at the same time, that women take longer to enter into management positions, and that the higher one looks in the organization, the lower the percent of women."
Following that ruling, many labor lawyers argue that the supermarket monolith, which is also the single-largest employer in the United States, could face the wrath of the majority of its female employees in the future.
The company played down the decision, and said it would seek to appeal. But in the meantime, the ruling is a major blow for Wal-Mart's public image, and an about-face from what the company is trying to project of itself. For Wal-Mart, their company represents the American dream come true as its founder Sam Walton built up the greengrocer in Bentonville, Arkansas into the retailing giant within his own lifetime. Certainly, that's the image that his son and successor Robson Walton wants to carry on.
That, however, may become increasingly difficult as Wal-Mart faces a myriad of problems as the company comes under greater scrutiny. The company's net income has surged from $3 million in 1971 to $9 billion last year, and while that may be great news for its shareholders, the success of the company has made it more visible, particularly as many of the business decisions it makes have a major impact not only on the supermarket industry, but on U.S. business practices as a whole.
On Tuesday, for instance, Walton addressed the American Antitrust Institute in Washington to talk about mega-buyers, and tried to dismiss allegations that it strong-armed suppliers to providing goods for the Wal-Mart group at a deep discount.
"One of the misconceptions of Wal-Mart today is that we arrive at low prices because of our size and our ability to get the best deals from suppliers...we are no different from you when you are buying a car or an appliance. There are limits on what a supplier can do for us on price," Walton said.
In fact, Walton argued that quite the reverse was true, that suppliers actually charged Wal-Mart more than they did other companies because they believe Wal-Mart could pay a higher price.
"Wal-Mart may not be able to access all the deal money that some suppliers offer retailers to promote their products. As a consequence, Wal-Mart ends up paying more," Walton said.
But accusations that Wal-Mart squeezes its suppliers continues to grow, and some economists even argue that the company is partly responsible for the growing U.S. trade gap as it strives to purchase ever-cheaper products, many of which are manufactured in China and other lower-cost nations. That, in turn, is seen as a threat to U.S. jobs that might lose out to foreign competition, even if customers ultimately win because of the cheaper prices available at mass retailers. Meanwhile, it has vehemently denied allegations that it supports sweatshops that use illegal child or forced labor in developing countries by focusing so much on the bottom line.
That's not all. The company is also accused of underpaying their employees, by not allowing them claim overtime for work down outside the clocked hours.
Meanwhile, it continues to prevent its workers from either forming or joining labor unions. The company argues that it does "not believe there is a need for third-party representation," while those working for Wal-Mart at or close to minimum wage point out that any time workers try to unionize, their efforts are quickly thwarted by the company.
Then there is the issue of hiring illegal immigrant workers. The company came under considerable public attack last year as it hired outside cleaning contractors, many of whom had no work permit to do the job in the United States. Since then, the company said it has started to use in-house staff who have all their working papers to do the cleaning.
For a company that sells everything from bread to diamond rings to bicycles which has over 1.2 million employees in the United States alone and 330,000 workers abroad, having worker relation issues and supplier problems shouldn't come as a surprise. But the latest class action lawsuit might just be one too many for Wal-Mart to handle without costing it considerable time and expenses.