Wal-Mart: A Case of Employee Discrimination

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Case Details:

Case Code : BECG024
Case Length : 16 Pages
Period : 2001 - 2002
Pub. Date : 2002
Teaching Note :Not Available
Organization : Wal - Mart
Industry : Retail
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"The nation's largest retailer is quickly becoming the nation's biggest violator of worker rights."

- Case Deepens Against Wal-Mart, www.ufcw.org, February 05, 2003.

"At Wal-Mart we do not discriminate against anyone, including women."

- Mona Williams, Vice President for Communications, Wal-Mart, www.ufcw135.org, February 16, 2003.

Wal-Mart in Trouble

The beginning of the 21^st century brought with it a spate of problems for the world's largest retailer Wal-Mart.¹ The company found itself facing one of the biggest lawsuits ever in the history of the US. In June 2001, a former Wal-Mart employee, Betty Dukes (Dukes), had filed a case accusing the company of 'sex discrimination in promotions, training and pay.'

Many more employees joined Dukes, and by May 2003, the case had taken the shape of a class action suit² after the plaintiffs asked a Federal Judge to allow the case to proceed on behalf of more than 1.5 million women. Wal-Mart had for long been accused of not treating its female employees in a socially responsible manner. A study of Wal-Mart's own employee data (conducted by some experts hired by the plaintiffs) revealed that women had been discriminated against in many instances. Even the company's internal memos revealed that Wal-Mart was far behind its competitors in promoting women at the workplace. Industry observers said that the company's competitors had employed more female managers in 1975 than Wal-Mart did even in 1999.

Apart from the sex discrimination case, Wal-Mart was also accused of breaking Federal laws that protected the freedom of association of workers. The company was reportedly found guilty of retaliating against and firing workers who were involved in union organizing. In addition, Wal-Mart was alleged to have failed to provide safe workplaces, to have utilized child labor and to have offered highly unaffordable healthcare plans.

Wal-Mart faced lawsuits (filed in more than 30 states in the US) that accused it of breaking many Federal overtime laws (in some cases, company managers locked stores to prevent workers from leaving the premises).

On November 21, 2002, thousands of protestors took to the streets in 40 US cities protesting against Wal-Mart's treatment of employees. Commenting on the situation Wal-Mart was in, Kyle Johnson, Project manager at Domini 400 Social Index, a US based socially responsible investment fund, said, "Wal-Mart is a market leader in retail, yet has not taken a leadership position on labor issues and has been unresponsive to calls for change from shareholders".³

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1] The market leader in the US discount retailing industry, Wal-Mart had 3,300 stores and earned revenues of $ 230 billion in 2002.

2] A class-action suit is a suit filed to protect the interests of a group of individuals which is affected or may be affected by a perceived fraud or misconduct of a similar nature. The number of people could be as less as 10 or over millions. Typically, class action suits in the US drag on for years and very often parties settle out of court within the first year of filing.

3] As mentioned in the article 'Wal-Mart? No Sale,' dated April 23, 2003, at www.philly.com.