Walmart legal troubles mount as Black Friday walkout looms

Walmart has been hit with a class action lawsuit in the midst of a threatened employee walkout on Black Friday, one of the busiest, most profitable shopping days of the year. Will worker troubles have an impact, or is this old hat for Walmart?

Editor's note: This story has been updated to include a response from Wal-Mart Stores. 

Walmart workers aren’t happy, and they’re letting their employer know it.

In the midst of worker strikes in several cities and the looming threat of a mass employee walkout on Black Friday (one of the busiest shopping days of the year), the world’s largest retailer has been hit with a class action lawsuit affecting temporary workers in the Chicago area.

The filing accuses Wal-Mart Stores, Inc. and two temporary staffing agencies in the region – Labor Ready Midwest Inc. and QPS Employment Group, Inc. –  of  breaking minimum wage and overtime laws for temp workers by making them show up early and work through lunch breaks. The lawsuit also alleges that Walmart failed to pay contracted workers the requisite four hours minimum in wages.

“We’re still reviewing the complaint but, based on the UFCW’s press release, one thing is clear: This litigation is being driven by the same union organizations that have been mischaracterizing several issues about Walmart and are more concerned with creating publicity than with improving workers’ rights," Walmart spokesman Dan Fogleman responded via email. “We are committed to ensuring that anyone working in our stores – whether they’re employed by Walmart or, in this case, a temporary staffing agency – is treated appropriately and compensated fairly for every hour they work."

The legal action comes at the tail end of what has been a tumultuous month for Walmart's perpetually rocky relationship with its workers. On Oct. 4, 71 employees in and around Walmart's Pico Rivera, Calif., store in the Los Angeles area participated in a day-long strike that spread to several metropolitan areas, including Chicago, Dallas, Miami, San Francisco, and Washington, D.C, according to the Making Change at Walmart campaign. Additionally, a group of workers staged a protest outside Wal-Mart Inc.'s Bentonville, Ark,, headquarters during the company’s annual investors meeting.

That wave of protests culminated in the Black Friday ultimatum: Walmart listens, or the workers walk. “It would be chaos in the stores,” says Evelin Cruz, a  manager in the photo department at the Pico Rivera store. She’s been with Walmart 8-1/2 years and makes $13.20 per hour. “Last year, our store alone made $1.2 million in sales [on Black Friday]. They would lose out on this.”

Missing employees on such a high-traffic shopping day could lead to “dangerous situations, understaffed floors,” says Evan Yeats, a spokesman for the Making Change at Walmart campaign and the communications director for the United Food and Commercial Workers International Union (UFCW), based in Washington. “It’s a symbolic day, and it’s also a day when Walmart needs their workers the most.”

"Throughout all of these union-staged events, all of our stores were staffed up and open for business as usual," Mr. Fogleman says. "There has been no impact to our business. We will be taking care of our customers on Black Friday and don’t expect any business disruptions. We’re looking forward to helping shoppers get a great start to the holiday shopping season.”

What do they want?

Walmart employees aren’t unionized, but those taking action are doing so through OUR Walmart, a support organization backed by unions and advocacy groups including the UFCW and the National Organization for Women (NOW). According to Mr. Yeats, OUR Walmart has helped workers file over 20 lawsuits against the retailer for unfair or unlawful labor practices, including switching workers’ shifts without their knowledge, reducing hours, and unwarranted disciplinary actions “all the way up to termination of workers and everything in-between.”

The chief complaint driving the most recent rash of strikes, including the Black Friday ultimatum, alleges that Walmart is retaliating against workers who strike or join up with OUR Walmart with unfair disciplinary action, reduction in hours, and even firing. Venanzi Luna, a seven-year Walmart employee and company shareholder now working as a manager at the deli counter in the Pico Rivera store, says that the retaliation started immediately when she joined OUR Walmart.

“I never had an attendance problem, but they started checking my attendance, and all of the sudden call me into the office because they say I have 19 absences. So they gave me a verbal warning for ‘stealing company time.’ Then they made me go to coaching for being disrespectful to associates. I didn’t know what they were talking about but they said they had it ‘all on camera.’ ”

Ms. Luna has since become a prominent figure in the worker movement, helping lead the Pico Rivera workers in their initial walkout and penning a now-closed petition on change.org that calls for the removal of Walmart's leadership. It garnered 19,237 signatures.

In addition to stopping the retaliations and respecting workers’ right to free speech and assembly, OUR Walmart members would like to see the retailer offer more dependable work schedules, affordable healthcare for full-time workers, and a living wage ($13 per hour minimum).

“Walmart has been advertising that they are a family-oriented company. And if this is how family is treated, then I would rather not have a family at all,” says Ms. Cruz.

“We have strict policies that prohibit retaliation and if someone feels that they have been treated unfairly, we want to know about that, so we can look into it and take the appropriate steps to resolve the concern," Fogleman responds. "Our associates have a direct line of communication with their management team. Anyone can bring forward a concern at any time and have it heard and acted on fairly." 

What’s at stake?

What does Walmart have to lose in all of this? The retailer, which generated nearly $447 billion in revenue last year, has pointed out in public statements in response to the strike that OUR Walmart workers make up a tiny sliver of its 1.4 million employees. What’s more, employee troubles are nothing new for Wal-Mart: In 2008, it paid $640 million to settle a rash of class action lawsuits accusing the company of withholding worker wages. Currently, Walmart is also facing accusations, first reported in the New York Times in April, of covering up a bribery scandal in which its Mexican subsidiary forked over $24 million in bribes to Mexican officials so it could more quickly obtain construction permits to open stores.

Editor's note: The revenue number has been corrected to $447 billion. The above sentence previously read, "Currently, Walmart is also facing accusations from its Mexican subsidiary that it forked over billions in bribes to Mexican officials so it could more quickly open stores." The change has been made to more accurately reflect the nature of allegations.

Still, the worker walkout could have an impact, argues David S. Meyer, a professor of sociology and political science at the University of California in Irvine who studies large protest movements.

“I don’t expect that they actually want to walk out. And I’m sure Walmart doesn’t want them to walk out.” he says.

“This is an attempt to put the issues of working people back on the national agenda. Plus, if they’re able to persuade some people not to go to work or shop at Target instead, Walmart loses a small percentage of what it makes on Black Friday, and that matters. It doesn’t have to be completely successful in order to make an impact.”

Walmart is a consumer-focused company, whose main selling point is price, he adds. “But there are some customers who want more than that. This may ward some people off.”

Another thing that might put people off: added turmoil on an already frenzied shopping holiday. “It’s chaos,” Luna says “Last year my manager was hiding behind me because he was being overwhelmed. It gets really bad. People would be fighting.”

Imagine that with a staff shortage.