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Monday, December 29, 2008

Wal-Mart settles most suits over labor violations

Rural America's largest employer, Wal-Mart, agreed last week to settle dozens of lawsuits alleging that it underpaid employees as a matter of course and violated other state and federal labor laws.

"The company disclosed in a regulatory filing earlier this year that it had 76 such cases; resolving 63 in one fell swoop would leave just 12 remaining cases. Wal-Mart settled a case in Minnesota earlier this month," reports Miguel Bustillo of The Wall Street Journal. "Wal-Mart lost similar cases in California in 2005 and Pennsylvania in 2006 and was ordered to pay $172 million and $187 million, respectively, for denying breaks to thousands of employees. The company has appealed both cases and they are not part of the settlement."

Paul Secunda, a Marquette University law professor, told Bustillo that Wal-Mart may have wanted to settle not only to avoid further such verdicts, but "to get their labor house in order" before Congress takes up the Employee Free Choice Act, which would allow workplaces to be organized by signatures of employees rather than secret-ballot elections. The bill "is fiercely opposed by Wal-Mart because the company worries it will make it easier for workers to unionize," Bustillo writes. Settling the suits could cost as much as $640 million, but Secunda said, "Compared to what unionization might cost them, I think they probably realized it was a small price to pay."

Wal-Mart said the settlements were "in the best interest of our company, our shareholders and our associates. Many of these lawsuits were filed years ago and are not representative of the company we are today." (Read more; subscription may be required)

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