Walmart, the largest corporation on planet Earth, is once again taking steps to insure its employees are less likely to be compensated for anything other than hours worked at a nominal wage, adding stigma to the company’s already volatile reputation as an evil corporation. Walmart of Texas has voluntarily dropped out of the state’s workers compensation program due to rising costs of on-the-job injuries. The company will offer alternative benefits over which it will have full autonomy to deny or reduce award claims as it sees fit. According to Becca Aaronson of The Texas Tribune, the multibillion dollar conglomerate has joined 15% of employers in Texas who refuse to offer workers compensation benefits for employees who sustain injury or illness on the job through a state-monitored program; Texas is the only state in the union which allows their companies to abstain from these programs. Under the privately run (and completely self-governed) plan, Walmart workers who are injured in the workplace stand to lose almost $100,000.00 in recovery and compensation funds as compared to the state run system. PartnerSource, a company that designs private workers compensation programs for Fortune 500 companies in Texas, built the Walmart plan as a cost-saving initiative to eliminate employee fraud and “restore the balance between adequate benefits and employee accountability.” The April 2012 article goes on to highlight opponents’ views of the privately run systems as “a real threat” to businesses and employees elsewhere as CEOs scramble to cut cost costs across the board in order to compete. The decision by Walmart of Texas to, once again, cut funding for employee benefits is merely one of hundreds throughout the country, fueling the proverbial fire and enticing critics and advocates to act. Will the world’s biggest multinational corporation continue to deface itself in the public eye? How far is this company willing to push the envelope to pad its bottom line (Aaronson, 2012)?
In addition to the recent move in Texas, Walmart has lowered the amount of health insurance coverage full and part-time employees have access to while raising the costs of premiums and co-pays. In October of 2011, Walmart announced the changes to its employees’ benefits packages would take effect during the open enrollment period at a cost of nearly three times the inflation rate to the average Walmart employee. Salaried managers will continue to receive health insurance benefits on day one of employment yet hourly full and part-time employees are forced to wait six months to a year for access to decreased benefits at a much higher cost (Kim, 2011).
Walmart’s reputation took another serious blow in 2011 when lawyers representing countless female employees filed a class action lawsuit against the company. The original lawsuit, which was thrown out by the Supreme Court in July of last year, has since been replaced with an “armada” of detailed lawsuits grouping the plaintiffs in similar classes according to case. The lawsuit for the state of California alone has more than 90,000 current and former employees seeking restitution for discrimination and harassment.
“Joseph M. Sellers, one of the plaintiffs’ lawyers, said the new lawsuit was specifically tailored to address the Supreme Court’s concerns. He said the plaintiffs were subject to the same decision makers and that there was some sort of overall animus directed at the women.
A California district manager for Sam’s Club said he had paid a female employee less than a male counterpart because the male manager “supports his wife and two kids,” the lawsuit says.
The lawsuit suggests that such attitudes were pervasive companywide. At a 2004 meeting of district managers, for instance, Thomas Coughlin, then chief executive of Wal-Mart Stores, told the group that the key to their success was “single focus to get the job done. “Women tend to be better at information processing,” he said, according to the lawsuit. “Men are better at focus single objective.”
Regional Vice Presidents in California have been accused of paying female employees less than male counterparts due to the complications of “family commitment.” Lawyers representing the plaintiffs in this case are confident the new lawsuits address the concerns expressed by the Supreme Court which resulted in the original case’s dismissal. The vote on the matter was 5-4 in favor of the dismissal. Will the outcome of these lawsuits result in further hatred for the Walmart Corporation (Martin, 2011)?
The future of Walmart’s precarious relationship with the public remains to be seen. With great power comes great responsibility and public outcry over perceived atrocities seems to gain momentum with each shady move the company makes. However, in the end: money talks and that other thing does that other thing. As long as people continue to vote with their hard-earned dollars by shopping with Walmart, the powers that be have no reason to change their policies toward employee compensation and discrimination. Many argue that government intervention or the creation of a Worker’s Union will fix Walmart’s problematic image while opponents of both insist it will only add insult to injury, much like placing a Band-Aid on a broken leg. What does the future hold in store (no pun intended) for the Walmart Corporation? We wait with bated breath.
Aaronson, B. (2012, April 10). Walmart stirs concern over workers’ compensation system. The Texas Tribune.
Kim, S. (2011, October 21). Walmart Cuts Employee Health Care Benefits. ABC News-Blogs.
Martin, A. (2011, October 27). Female Wal-Mart Employees File New Bias Case. The New York Times.
