On Dec. 20, 2002, a federal jury in Portland, Ore., found Wal-Mart guilty of forcing its employees to work unpaid overtime. These employees were pressured to clock out after working 40 hours, but continued working in violation of the Federal Labor Standards Acts, which requires employees to receive time-and-a-half for all hours worked over 40. Employees in 27 other states have similar class-action suits pending.
According to testimonies given during the Oregon trial, time cards were falsified by erasing hours worked to keep them below 40. Failure to comply meant managers viewed employees as unable to finish their assigned responsibilities within the 40-hour time frame, hence negatively impacting their promotions, pay raises and employment security.
In 2000 Wal-Mart settled a class-action suit in Colorado for $50 million that asserted its workers were forced to work off the clock.
In addition, the retailer is facing a sex-discrimination lawsuit over equal pay and promotions denied to 700,000 of female employees from 1996 to 2001. The suit claims that female employees make $1,150 less per year than men in similar jobs, while female managers make $16,400 less. According to one of the women testifying, her department manager explained that Wal-Mart pays men more than women because the Bible says God made Adam before Eve.
When employees at Wal-Mart attempted to unionize in order to have more leverage with management, union supporters were improperly fired, intimidated and threatened with loss of bonuses. A union supporter, Sidney Smith, was fired at a Jacksonville, Texas, store for supposedly stealing a banana.
The only successful effort at organizing Wal-Mart employees occurred in the butcher’s department in a Texas store. Within two weeks of unionizing, the department was disbanded by the company.
Such actions have led to over 40 complaints filed by the National Labor Relations Board from 1999 through 2002. Eight of those cases were settled, 10 were decided against Wal-Mart and the rest are pending.
According to Wal-Mart’s senior vice president, Jay Allen, the reason Wal-Mart remains nonunion is not because of unfair tactics, but because the company has done a great job in keeping its employees happy and paying them competitive wages.
Yet non-unionized Wal-Mart employees average $8.50 an hour compared to $13 at unionized stores. Wal-Mart’s refusal to unionize threatens to undermine wages being paid by other competitors like Sears, Kmart and Costco, who are demanding contract concessions from unions citing their inability to compete when Wal-Mart’s wages and benefits are 20 percent below theirs.
In effect, Wal-Mart, the nation’s largest corporate employer, is lowering the living standards for everyone by aggressively and artificially keeping wages depressed. Because Wal-Mart is able to cut the cost of operations by paying their employees less, they have been able to push over two dozen national supermarket chains into bankruptcy since 1990.
In February, 2004, Wal-Mart will open its first of an expected 40 supercenters in California. In California, unionized stockers and clerks average $17.90 an hour plus health benefits after two years, placing them solidly within the middle-class; but Wal-Mart’s employees starting at an average of $8.50 an hour with little if no health insurance find themselves living in poverty.
In her book Nickel and Dimed: On (Not) Getting By in America, Barbara Ehrenreich took several jobs available to the unskilled, in an attempt to discover if she could live as a low-wage worker. One job was at a Wal-Mart in Minnesota. During her orientation as a new employee she was warned of the dangers of unions and why she would be worse off if they were to organize Wal-Mart employees.
Of more significance was the admonition against “time theft.” What is time theft? Doing anything other than working while on company time. While employees are guilty of the sin of “time theft” when they take a five-minute break to go to the bathroom (as defined in the supercenter where Ehrenreich worked), Wal-Mart participates in grand-scale time theft by forcing employees to work off the clock.
Reminiscent of Third World sweatshops, several Wal-Mart supercenters, according to pending lawsuits, even locked the doors at closing time and forced employees to work additional hours at no pay. Compared to the plight of the marginalized working at Wal-Mart is their top executive officer, H. Lee Scott, whose total direct compensation for 2003 was $4.3 million.
What has emerged in America is two sets of business ethics, both of which are constructed to benefit the elite. The marginalized, who work at the bottom rungs of society in companies like Wal-Mart, are expected to be upright, honest, and loyal. Top executives are responsible for creating profit, even at the expense of those upright, honest, and loyal employees.
While the employees are warned against time theft, the employer practices it as a matter of standard procedure. Here now is the question to ponder: Does patronizing an establishment that is able to offer cheaper goods at the expense of a marginalized labor pool make the purchaser of those goods complicit with their oppression?
Miguel De La Torre, is professor of theologies of liberation at Hope College in Holland, Mich. He is a graduate of Southern Baptist Theological Seminary and a former Baptist pastor in Kentucky. His column also appears in the Holland Sentinel.
Professor of Social Ethics and Latinx Studies at Iliff School of Theology in Denver, Colorado.