The frequency with which class action employee lawsuits are filed against Walmart gives rise to questions about whether Walmart employees are exceedingly disengaged and litigious, or whether Walmart's overarching relationship with its employees is exceedingly contentious.
Either way, Walmart employee class-action lawsuits seem to happen often enough to be considered "business as usual." But what is not common knowledge is how much U.S. retail employment law is defined by Walmart's ethics and how successfully it defends its ethics in courtrooms around the world.
Walmart's Legal Response to Employee Class Action Suits
In 2009, Walmart (WMT) found itself defending against a massive employee class-action suit in California when a judge certified that Walmart broke the law by refusing to provide suitable seating for its cashiers who requested it.
Walmart's response to this class action certification was not that it did, in fact, provide appropriate seating within parameters of existing laws. Instead, the response from Walmart's legal team was that the class shouldn't have been certified at all, and instead, each cashier should have to file and fight an individual lawsuit.
Logically, it seems that Walmart would prefer to just fight one lawsuit instead of fielding 100,000 individual claims. Walmart probably counted on legal actions to work like coupons; only a small percentage of people would follow through on the offer.
The Stance on Employee Seating
Publicly, Walmart is not denying that it has consciously chosen to deny seating to its cashiers, although it is denying wrongdoing. Reportedly Walmart's argument against providing seating is that cashiers need to be able to move around to look inside carts, stock shelves, and greet customers. Apparently, Walmart believes that if its cashiers are given an opportunity to sit down at any time during their work shift, they won't stand up again.
The point of contention seems to be a confusion between the Americans With Disabilities Act (ADA) and California state law. ADA legislation mandates that reasonable accommodation is made to employees with disabilities. With the increase in the number of employee lawsuits filed related to ADA legislation, the definition of a disability seems to be getting looser by the day and by the lawsuit.
California State Law on Employee Seating in a Retail Environment
California state law about seating in a retail environment is much broader than the ADA, and not necessarily connected to "disabilities" at all. Very simply, and without qualifications, The California Industrial Welfare Commission Wage Order 7 says :
1. All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
2. When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.
So, disability or not, California says retail employees should be provided the opportunity to sit down at any time that it doesn't interfere with their work. Walmart is taking the position that it shouldn't have to comply with the California Industrial Welfare Commission's rules. Why? Because Walmart says so, and it's big enough to carry weight. California's annual revenue of $97 billion is less than the $113 billion that Walmart collects at its cash registers every quarter. So the state of California is the legal David to the goliath Walmart.
Why Not Just Provide Chairs and Avoid the Lawsuit?
To avoid this legal battle altogether, Walmart could probably have purchased 100,000 stools from one of its many suppliers for about $1 each. Instead, Walmart decided that its opinion about suitable seating took precedence over the opinion of California agencies and lawmakers.
The threat of a $100 fine per employee per pay period since 2007 didn't scare Walmart. It was just another game of legal chicken that Walmart is known for playing around the world.
While Walmart continued to deny wrongdoing, it ultimately paid $65 million to nearly 100,000 cashiers in California to settle the nine-year-old lawsuit.
Walmart Sued by Warehouse Workers
Simultaneously with the suitable seating lawsuit, the perpetually busy Walmart legal team was also defending itself against an individual employee lawsuit filed for malicious prosecution, as well as a suit filed by a group of warehouse workers claiming poor working conditions and safety violations.
In the warehouse case, a judge ruled that even though Walmart does not directly employ the warehouse workers, the company could still be named as part of the lawsuit because it owns and/or leases the warehouse facilities where the bad working conditions allegedly exist.
The warehouse worker lawsuit was settled for $21 million in 2014.
Walmart Takes Legal Action Against Protest Groups
In 2013, Walmart was also on the legal offensive with employees, filing lawsuits against groups that were daring to protest Walmart's working conditions and employment policies.
A suit filed against the United Food and Commercial Workers International Union (UCFW) and a separate suit filed against Organization United for Respect at Walmart (OUR) group organizers both sought injunctions to stop protest activities from happening in and around Walmart stores and at Walmart shareholders' meetings. Walmart leaders don't address whether the issues fueling the protests are valid. They just want the courts to help them shut the protestors up.
Walmart Ethical Questions
And then there are the tragic Bangladesh factories where employees burned to death while creating the garments that would stock Walmart shelves. The Bangladesh tragedy is not a legal battle as much as it is a moral debate. Walmart's initial response was that the Bangladesh factory employees weren't Walmart employees, so what happened at the factory was neither Walmart's fault nor responsibility.
Basically, the official ethical position from the world's largest retail chain was "What happens in Bangladesh stays in Bangladesh." Walmart has never earned a spot on the Most Ethical Retail Companies list.
Walmart Defines Retail Industry Ethics in Lawsuit Defenses
Certainly, Walmart is not the only major U.S. retail chain that is being taken to court by its employees. It's just the one that seems to be taken to court by its employees the most often.
Retailers large and small must pay attention to employee legal actions because each legal battle sets a precedent for every retail company in the world doing business in the U.S.
Since Walmart is the defendant more often than other retail companies, the Walmart legal team has the most influence in defining labor laws for the entire U.S. retail industry. In essence, with every lawsuit that Wal-Mart defends, the entire U.S. retail industry is being aligned to the ethics, human resources philosophy, and employment practices that Walmart is willing to fight for.
Depending on what you believe to be true about how Walmart regards its employees (and the factory workers employed by its suppliers) this could be a terrifying thought for the future of retail employment in the U.S.
There are two sides to every court case and certainly not every employee lawsuit filed against Walmart has merit. But the sheer number of employee lawsuits filed against Walmart gives cause to wonder if it wouldn't be more productive for the retailer to reallocate at least a portion of its legal budget to positive employment best practices.