Buddhism and Business Ethics (602), Wal-Mart case (2)

The Wal-Mart Way: Lawsuit Case

The differences in economic opportunity distribution between women and men within
occupations have never been a model of equality in the U.S or many parts of the European
countries. This job disparity continues to be a prominent feature of the current labor market, as
shown by the recent allegations against Wal-Mart.

Wal-Mart stores, the world’s biggest retailer, owns more than 4,000 stores, including 1,475
discount stores 1750 Wal-Mart Supercenter combination discount and grocery stores and 540
Sam’s Club Warehouse stores. With close to two million employees worldwide, Wal-Mart is the
biggest employment provider in the world.

The company is famous for its strong and distinctive corporate culture, which it actively
promotes. New employees are given videos, lectures and literature on Wal-Mart’s culture or the
Three Basic Beliefs, Respect for the Individual, Service to Customers and Strive for Excellence”.
Managers get continuing lessons and impart these lessons to subordinates and employees are
rewarded when they demonstrate a strong commitment to it. Some of the company’s cultural
traditions are male-oriented where by senior male managers attend an annual corporate retreat,
including fishing and hunting.

Though Wal-Mart suffered lots of lawsuits which included child-labor, illegal immigrant
workers, failure to pay over time charges the recent and major law suit they are facing now is the
discrimination against female employees in promotions, pay, management training and job
assignments.

It was, therefore, a noteworthy event in June 2004 when a federal judge expanded a lawsuit filed
by six California women to a class action. The case has now mushroomed to cover 1.6 million
women Wal-Mart workers, employed nationwide since 1988, making it, by far, the largest class
action in U.S. history.

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Question 1

What financial impact do you think lawsuit could potentially have on Wal-Mart?

We all know, Wal-Mart is the biggest or largest retail store in the world. Naturally, their earning
and employees are also more compared to other corporate. The lawsuit against the company was
not the company needed when they were facing other legal issues such as the child labor and
employment of illegal immigrants. The lawsuit was filed by six women who say women were
treated lower than the male even if they acquired equal posts, qualification and experience.

The news already reached every household, street and public place thus bringing the name of the
company down. This could have a huge impact on the company’s earnings and here we are not
saying in terms of hundreds or thousands of dollars we mean millions and billions of dollars.
Some of the impact could occur in the following forms:

 The six women who filed the case against Wal-Mart are not only asking the company pay
for the unfair deed but also asking them to pay back and compensate for all 1.6 female
employees against whom Wal-Mart discriminated. This would cost the company a fortune
because these 1.6 female workers were entitled to promotions, salary increment, trainings
and other such things. To compensate or reimburse that much amount for that much
workers would surely have a huge and major impact on the company’s financial position.

 The other way how this lawsuit could affect the company’s financial position would be
through the transaction or sales. Since major part of the shoppers constitutes women, after
hearing what Wal-Mart has done and how women are treated at Wal-Mart they would
certainly feel insecure and ripped off. They would turn their backs and look for a better
place to shop. This would lead to a fall in sales and increase in competition.

 Other thing is the reputation and goodwill of the company. The lawsuit already has
brought the name of the company down and on top of that if the company fails to win the
case, then the company would suffer a huge fall of share in the market. They would even
have to close most of the stores and start all over again which would be impossible
looking at the current market situation and all the competition worldwide.

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 And not to forget the turnover of workers or employees. Reaching this news of
discrimination I personally believe that most of the women employees will quit their job,
even those who did not experience the situation. So interviewing, selecting or recruiting
those new employees would cost Wal-Mart another million. Moreover, those new
employees would have no experience and would commit lots of errors. Training them
would again add to the cost.

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Question 2

What are the major moral complaints of the females suing Wal-Mart? Do you believe these
moral complaints are justified? Why?

The major moral complaints of females suing Wal-Mart in the case basically cover the
discrimination against female employees. To point out what constitutes those complaints:

 Difference in the promotion scheme between male and female employees

 The lower payment of wages and salaries to female employees even they were at same
level with male employees

 Unequal distribution of management training among the male and female employees

 Male allotted a better job assignment compared to women even they were equally
qualified, ranked and experienced.

Yes, I believe these complaints are justifiable because we can see from every point that women
were not treated fairly and equally. It wasn’t that women lacked in anything or that they were
unwilling to work, it was because they were woman. We can very well compete with men and in
some cases may even prove better than them but it is act like this what is pulling the power of
women down.

The six women who sued Wal-Mart didn’t sue for nothing; they had physical proof and
evidences of the discrimination laid upon them. Some of the evidences were found in the
employees’ records where by Richard Drogin, a statistical expert found out that employees at
Wal-Mart were divided into two main groups, hourly employees who occupied the lower levels
and salaried managers who occupied the higher levels. Compensation increases from one level to
the next. In 2001, salaried managers made about $50,000 a year while hourly employees made
$18,000. Drogin found out that not only 65% of hourly employees were women but also 33% of
salaried managers constituted women. So at both the point women earned less than man.

When we also look upon the experience level, an average woman was far more experienced than
an average man because women worked or stuck there for longer than men. Women despite
having other responsibilities like raising a kid or managing the home, they dedicate more where

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they work that is why they have less turnover rates. So this adds up to another reason why the
lawsuit was appropriate or justifiable.

It is strange but true; the performance rating of an average woman was much higher than of an
average man. Drogin found out that be it in a cashier’s place, a manager’s place or a sales
associate’s place women performed better than men. However women were paid about 5% to
15% times less than men and on top of that fewer women got promoted to the next rank that too
in a very long time whereas a man would get promoted within the speculated time or even less
into the next post.

Wal-Mart was fined $188,000 by the California Fair Employment and Housing Commission for
violating California state law when it refused to reinstate a woman after she completed her
maternity leave. In addition, Wal-Mart also offers a pitifully small amount of paid sick time for
working women, and requires employees to be available for shifts 24 hours a day, 7 days a week,
making it extremely difficult for working mothers to schedule child care or take time off to care
for a sick child. So the main point here is that at any angle or point we can see women were not
treated fair and left to suffer. If women do not come together and fight for their rights when they
have the opportunity then women will always remain a victim. Then there is no use shouting at
the store or ourselves that we deserve more or we have earned it, it would be too late then.

Besides the moral complaints by the female workers at Wal-Mart there were major issues
involving the employees which were not noted earlier, some of the issues were:

 Wal-Mart pays low wages and appears to aggressively seek to keep wages down.
On average, Wal-Mart workers earn an estimated $8.00/hour with a 32 hour work week.
This equals $256 a week or $13,312 a year. The Federal poverty level for a family of three
is $14,630. In contrast, union grocery workers earn on average 30% more.

 Charges have been made that older workers are laid off to bring in younger and cheaper
employees. Some 40 lawsuits accuse Wal-Mart of a failure to pay overtime.

 It pulls wages and benefits down in other grocery stores. It lowers area standards. In some
cases, it forces the closure of better paying firms. Business Week estimates for every Wal-

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Mart supercenter that opens, two other supermarkets will close.

 It pressures suppliers to make products more cheaply, putting pressure on wages, causing
jobs to be moved overseas. Last year, it imported 12 billion in goods from China, 10% of
US imports from that nation.

 Wal-Mart doesn’t produce new technology or innovations that improve the quality of life.
It takes business from existing firms by offering the same merchandise cheaper. That’s all
it does.

So I believe it is not only justifiable but also rightful to file the lawsuit against such treatments.
On top of that the evidences and statics are on the women’s side so therefore the lawsuit is 100%
justifiable.

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Question 3

What, if anything, do you think Wal-Mart should do to correct these discrepancies? Should
the company institute an “affirmative action” promotion program for female employees? If
so, what should this program be like?

The problem was caused by the company, Wal-Mart so definitely they have to find a solution and
try to correct their mistakes. They have already started working on the problem. Some of the
initiatives they have taken are:

 They had posted “anti-discrimination” posters all over

 Women were allotted more responsibilities and representation in areas they were
evaluated

 Women could enter salaried management jobs without having to relocate their homes

But since such initiatives were not firmly implemented some of them were forgone with the
passage of time. Some of initiatives Wal-Mart could think of or adopt are:

1) Work Discrimination

Here I am talking about the actual work or labor work. Women at Wal-Mart seem to be working
at par with men but still they are not paid at par. To compensate for the women’s losses they
could reduce their work time or they could allocate women to areas where minimum energy is
required. For example they could work at displaying of items, as a cashier, and such places where
not much of hard labor is required.

2) Facility such as Day Care

Wal-Mart is one of the biggest retail all over the world and they have lots of property they own.
If they established some Day care centre for their employees especially the female employees
then those employees who have kids can drop their kids in those centre and work care free in the
store. The centre could be near the store and they could also charge some amount as charge but
this could not only benefit the workers but also the company for could avoid unnecessary
absenteeism.

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3) Women’s Association

An association called the Women’s Association can be formed in every retail store so that female
employees can come together to discuss their issues and forward suggestions and feedback. Such
programs do not have to disturb their normal work time, it could be conducted once in every
month or whenever major issues arise.

4) Equal Respect

At Wal-Mart’s women were mostly looked down and not given the respect they deserve. A
woman may be somebody’s mother, wife or sister. Men at Wal-Mart fail to see that and they
criticized women of their looks, their past, future and their purpose in life. So therefore women
should be given respect and treated equally.

Yes definitely the company should institute an “affirmative action” in order to promote program
for the female employees. From my point of view, since the company is based in the United
States they should associate their program with the Statue of Liberty. That statue denotes the
power of women and it signifies the right to freedom for all the U.S citizens. The title or the main
theme of such program could be “Liberty for Women”.

Whereby they could stress the freedom to speak, advance and employment especially for the
female workers. They could relate women to some famous figure such as the Mother Teresa or
simply their own mom. On this particular day they could give all the female employees a one day
holiday and let them embrace themselves. The company should however grant monetary
compensation for this day. This way women employee could proudly say they work at Wal-Mart
and dedicate completely to their work and avoid complaining. Some of the points they could keep
in mind while pursuing such program could be as follows:

 The right and responsibilities of women

 The importance of women

 The success of women till now

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 The potential and ability of women

 The sacrifices women make in every aspect of life

 And maybe life without women

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References:

http://www.business-marketing.com/store/article-walmart.html

http://www.forbes.com/2004/06/23/cx_da_0623topnews.html

http://www.seattlepi.com/opinion/294798_walmart06.html

http://www.allheadlinenews.com/briefs/articles

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