Walmart Watch

Below is the statement issued today by Making Change at Walmart in response to the Department of Labor’s decision that Walmart will pay “$4.8 million in back wages and damages to more than 4,500 employees nationwide for unpaid overtime.”

The Making Change at Walmart campaign hears from Walmart associates every day who say there are serious problems in their stores with working conditions, pay and hours. The fines Walmart must pay for its overtime violations are just another side effect of the company’s growth at any cost strategy. Walmart’s top executives and the Walton heirs who own a majority of the company have shown they are willing to break the law and harm workers in the name of more profits.

FOR IMMMEDIATE RELEASE:
Monday, April 30, 2012
CONTACT: press@ufcw.org

WORKERS, COMMUNITY LEADERS CALL FOR WALMART CEO, CHAIRMAN TO STEP DOWN

As Walmart Approaches its 50^th Anniversary, “Making Change at Walmart” Campaign Calls For Accountability, Checks on the Retailer’s Power

Petition By Walmart Associate Calling for New Company Leadership Gains Thousands of Signatures

WASHINGTON— In the aftermath of the New York Times report on Walmart’s corruption scandal and reported cover-up, Making Change at Walmart—a national, broad coalition of Walmart workers, shareholders, and community leaders—is calling for the immediate resignation of Walmart’s Chairman Rob Walton and CEO Mike Duke.

“We now have proof of what we have been saying all along, that this company will stop at nothing to increase its bottom line,” said New York Public Advocate Bill de Blasio, a member of the Wal-Mart Free NYC coalition. “Walmart broke a trust, and the company needs to take bold steps to rebuild that trust and it begins with new leadership.”

Celebrating its 50^th anniversary this year, Walmart has unparalleled size and impact on the American economy as the country’s largest employer and retailer.  On April 19, the group released a set of proposals calling on Walmart and the Walton family, the richest family in America with a combined wealth of more than $100 billion – more than the 30 percent of American families combined, to commit to improve workers’ lives, rebuild communities, guarantee workers’ rights, and elevate global and sustainable living standards.

“To rebuild America, and restore the economy for the middle class, we need to make change at Walmart today,” said Rev. Eric Lee of the Southern Christian Leadership Conference. “Our country cannot afford another minute of a ‘Walmart economy’ where owners and executives make billions of dollars while workers struggle just to pay the rent and keep food on the table.”

Walmart Associate and company shareholder Venanzi Luna from South Gate, Calif., has started an online petitioncalling for the resignations of the retailer’s chairman and chief executive officer for reportedly squelching an internal probe into bribery allegations. In just a few days the petition has garnered more than 5,500 signatures. Luna, who has worked at Walmart for seven years, said she wanted to get 10,000 online signatures or more.

“I am angry that top Walmart executives were involved in illegal activity and then tried to cover up the scandal,” Luna said. “For years my co-workers and I have been saying that this company has lost its way. We didn’t know it had gotten this bad.”

“If Walmart makes the changes we’re calling for, we can take a big step toward turning this country around for regular people,” said Cindy Murray, a Walmart associate from Laurel, Md who has worked for the retailer for 12 years. “It’s time for Walmart to come clean and regain the trust of customers, workers, shareholders and the communities where it has stores.”

Both Luna and Murray are members of Organization United for Respect at Walmart, or OUR Walmart, an independent group of Walmart Associates aimed at improving conditions for the retailer’s workers and the company.

Local Criticism of Walmart’s Business Practices

In cities and towns across the country, Walmart has been facing an outpouring of community criticism for its business practices that harm workers, small businesses and the environment and take away jobs. In Los Angeles, long-time residents and shoppers said they want to ensure any Walmart store that opens meet community standards for pay and working conditions. In Washington, D.C., Walmart was forced to announce it will delay the opening of five planned stores because the company needs more time to receive community input. And in New York City, elected leaders last week called for Walmart to stay out of the city and withdraw its bid to open new stores in the area.

“Walmart and the Waltons must strengthen communities, protect the environment and ensure the well-being of associates and workers throughout its U.S. supply and distribution chain,” said Elce Redmond from the South Austin Coalition in Chicago. “Instead of empty promises and PR campaigns, we demand that Walmart sign a national community benefits agreement that guarantees when Walmart expands, it will strengthen – not undermine — our communities.”

Making Change at Walmart is leading a nationwide campaign for workers, community members, small business owners and activists to share their stories on the impact Walmart has had on their lives as the company plans to celebrate its 50th Anniversary this year. Stories are online at www.WalmartAt50.org.

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Making Change at Walmart is a campaign challenging Walmart to help rebuild our economy and strengthen working families. Anchored by UFCW, we are a coalition of Walmart associates, union members, small business owners, religious leaders, women advocacy groups, multi-ethnic coalitions, elected officials, and ordinary citizens who believe that changing Walmart is vital for the future of our country.

FOR IMMEDIATE RELEASE: APRIL 25, 2012
Contact: press@ufcw.org

(Washington, D.C.) – Joe Hansen, International President of the United Food and Commercial Workers International Union (UFCW) and Chair of Change to Win, today released the following statement to join Walmart associates in the demand for leadership changes at the retail giant.

“The corruption scandal and reported cover-up exposed an unacceptable failure of leadership within Walmart. Walmart Chairman Rob Walton and CEO Mike Duke must resign immediately in an effort to restore integrity and accountability for Walmart associates, shareholders, customers, and communities.

“The New York Times exposed a widespread pattern of Walmart executives bribing government officials to secure permits to build stores in Mexico, followed by a cover-up led by corporate leaders including Duke and Walton. The article raises serious questions about whether Walmart has used the same tactics for its expansion in the United States and across the globe.

“For decades, Walmart has pursued a growth-at-any-cost strategy in cities and towns across the United States and globally. In the U.S., we have watched Walmart secure the building permits, variances, and zoning changes to open its stores, in spite of concerted community opposition.

“The public deserves a wholly independent and thorough investigation of Walmart’s practices. Communities across the globe should take heed of Walmart’s reported unlawful and unethical practices in Mexico, as the company works at a rapid pace to expand its retail stores in South Africa, India, and China, to name a few, in addition to its global supply chain operations.”

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The UFCW represents 1.3 million workers, 250,000 in the meatpacking and poultry industries. UFCW members also work in the health care, garment, chemical, distillery and retail industries. For more information about the UFCW’s effort to protect workers’ rights and strengthen America’s middle class, visit www.ufcw.org, or join our online community at http://www.facebook.com/UFCWinternational and www.twitter.com/ufcw

Making Change at Walmart is a campaign challenging Walmart to help rebuild our economy and strengthen working families. Anchored by UFCW, we are a coalition of Walmart associates, union members, small business owners, religious leaders, women advocacy groups, multi-ethnic coalitions, elected officials, and ordinary citizens who believe that changing Walmart is vital for the future of our country.

This article was originally posted by Ben Waxman on Walmart 1 Percent’s site.

The Walmart 1 Percent are having a rough week and it’s only Tuesday. Shares of Walmart stock fell by nearly 5 percent in response to a report in The New York Times that alleged widespread bribery and corruption in Mexico. According to the story, Walmart’s top executives—including CEO Mike Duke—knew about the problem and tried to cover it up. Matthew Feeley, an expert on corporate malfeasance, told the Times yesterday that the tumble in the stock price could be a sign that investors have lost confidence in the company’s leadership.

“I think there’s going to be a lot of pressure to come down hard on them as a company, not entirely because of the actual violations but because of the failure to do anything internally when those violations came to light,” Mr. Feeley said.

The uncertainty made investors anxious on Monday. Wal-Mart’s stock lost $2.91 in heavy trading, to $59.54. Wal-Mart de Mexico’s stock, traded separately, fell more than 12 percent to 37.89 pesos.

The headache doesn’t end with the plummeting stock price. The Washington Post broke the news yesterday that the U.S. Justice Department launched an investigation into Walmart’s dealing in Mexico back in 2011.

The investigation was launched in December after Wal-Mart met voluntarily with Justice Department officials, revealing it was looking into whether its Wal-Mart de Mexico unit had bribed foreign officials to gain business. Wal-Mart said this weekend that it has also met with the Securities and Exchange Commission. The allegations were brought to light by the New York Times on Saturday.

The U.S. Foreign Corrupt Practices Act bans companies from paying foreign officials to get more business. The law has recently been targeted by lobbyists — including an arm of the U.S. Chamber of Commerce with ties to Wal-Mart — who criticize it as too broad and bad for business.

So what are the details of the Foreign Corrupt Practices Act? And why might it cost the company so much money? Here’s an explanation of why the losses may be devastating for Walmart from the Chicago Tribune:

The potential liability Wal-Mart faces is staggering because the monetary penalties for breaking the law are based on the profits enabled by payoffs, said Andrew Spalding, an assistant law professor at IIT Chicago-Kent College of Law. Wal-Mart de Mexico, known as Walmex, is Wal-Mart’s largest foreign subsidiary.

The inquiry into Wal-Mart will cast a spotlight on a law that has become controversial in corporate America. Federal authorities have aggressively stepped up their enforcement of the anti-bribery statute in the last decade. The numbers tell the tale.

At the end of 2011, nearly 80 companies were known to be the subject of an ongoing and unresolved foreign bribery investigation, according to “The FCPA Blog,” which compiled the list primarily from disclosures to the Securities and Exchange Commission.

Finally, an opinion piece on Market Watch by Mark Hulbert says that the drop in Walmart stock could be a sign that more trouble is coming. The author looked research about bribery prosecutions and found that corruption cases alone don’t create panic among investors. It’s only when the market expects additional bad news to follow that a company can lose serious market value.

Below is a clip from MSNBC discussing the Walmart bribery and cover up scandal. Read the detailed New York Times piece that broke the story here.

Visit msnbc.com for breaking news, world news, and news about the economy

FOR IMMEDIATE RELEASE: APRIL 23, 2012
Contact: press@ufcw.org

(Washington, D.C.) – Joe Hansen, International President of the United Food and Commercial Workers International Union (UFCW) and Chair of Change to Win, today released the following statement in response to the New York Times expose of Walmart’s corruption and purported cover-up by senior company officials.

“The New York Times story about the Walmart Mexico corruption scandal and reported cover-up exposes serious violations of the Foreign Corrupt Practices Act and demands an immediate and thorough investigation by the U.S. Department of Justice.   Walmart senior management exposed its lack of corporate morality and internal ethics to workers, shareholders, consumers and community members.

“Walmart has spent millions of dollars to rehabilitate its image and buy the support of key allies in an effort to break into new markets while making promises about the benefits of its business model. But by pursuing a relentless strategy in the U.S. and abroad of ‘growth at any cost’ in pursuit of profits, Walmart’s senior management has proven that it is willing to trample on worker rights, discriminate against women, damage small businesses and the environment, and now potentially violate laws in the U.S., Mexico and other countries.

“The reported cover-up by Walmart executives at the highest levels exposes a core truth:  Walmart cannot be taken at its word.    A Department of Justice investigation into foreign bribery is an urgently needed first step.  Congress should immediately convene hearings to examine whether Walmart is using these unethical business practices in their U.S. operations.”

The UFCW represents 1.3 million workers, 250,000 in the meatpacking and poultry industries. UFCW members also work in the health care, garment, chemical, distillery and retail industries. For more information about the UFCW’s effort to protect workers’ rights and strengthen America’s middle class, visit www.ufcw.org, or join our online community at http://www.facebook.com/UFCWinternational and www.twitter.com/ufcw.

On Thursday, hundreds of community allies, warehouse workers and OUR Walmart members converged on the Crenshaw Walmart store outside of Los Angeles. The group came together to launch a nationwide campaign asking Walmart to help rebuild America. The group called on the company to improve treatment of workers in the US and abroad and help to rebuild our communities.

“To rebuild America and restore the economy, we need to make change at Walmart today,” said Reverend Eric Lee of the Southern Christian Leadership Conference. “Our country cannot afford another minute of a ‘Walmart economy’ where owners and executives make billions of dollars a year and families in our communities are struggling just to pay the rent and keep food on the table. We must stand up now because our economy can’t recover when Associates at the country’s largest employer are forced to rely on public health care programs that taxpayers pay for and where warehouse workers aren’t even paid for all the hours they work.”

The event marked the start of a broader effort to collect stories about what Walmart’s 50^th anniversary this year has meant to individuals and communities. These stories are being collected at www.Walmartat50.org to create a more accurate picture of fifty years of Walmart.

Sign the petition and tell Walmart to address abuses in the supply chain!

Last week thousands of workers at two different Thai food processing facilities protested their extremely poor working conditions. Both facilities, Phattahana Seafood and Vita Food Factory, are suppliers to Walmart stores across the US. Disturbing reports coming out of the region indicate that the questionable treatment of workers extends well-beyond the US border and signals deeper global issues.

Early reports indicate a series of severe human and worker rights violations, including confiscation of passports and conditions that appear to fit the definition of human trafficking and debt bondage.

In response to these egregious violations, Making Change at Walmart sent a letter to Walmart’s Ethical Sourcing director calling for the immediate defense of migrant workers in the food processing facilities. The letter detailed violations being committed by two separate plants, including one fruit (primarily pineapple) processor and one seafood (primarily shrimp) producer. Phattahan Seafood Factory may be holding as many as 2,000 confiscated passports belonging to migrant workers from Myanmar and Cambodia. A number of the workers have started to illegally flee the plant to return to their country despite lack of documentation.

Excerpt from the letter:

As the largest grocer in the world and the largest importer of shrimp in the United States, Walmart has a responsibility to call for an end to this treatment of workers and do more to ensure that this treatment is not occurring in other supplier factories.

Since the release of Walmart’s Global Responsibility Report on Monday, environmental groups have raised questions about a number of items that may have been overlooked in the report. To be sure, these latest accusations fly in the face of claims of responsible and sustainable sourcing.

Four long-term Walmart Associates and shareholders have proposed a resolution calling for the company to review executive incentive structures and bonuses in order to discourage senior executives from “making investments that result in declining rates for return on investment.”

“[T]he board should look at the way it structures executive bonuses and make sure that it is not creating incentives that hurt shareholders,” said Jackie Goebel, an OUR Walmart  member. “Unfortunately, we have seen the board lower the performance goals year after year, remove key performance objectives when they’re not going to be achieved, and make ‘executive-friendly’ adjustments to boost reported profits.  This has been good for executives, but not for shareholders like us.”

The proposal, entitled proposal #6, will appear on the ballot at the annual shareholders’ meeting in June. It comes in the wake of several years during which the company has significantly underperformed its retail competitors. (See below.) According to this data, for the three-year period ending April 12, 2012, the S&P 500 Retailing Index was up over 88%, whereas Walmart’s share price had grown less than 17%.

“Unfortunately, Walmart’s stock has significantly underperformed its retail peers over the last 10 years; Return on investment is down for the fifth year in a row and the company has lost market share in the US for two years in a row. This year, shareholder engagement with the company will be very important,” said John Marshall of the United Food and Commercial Workers’ Capital Stewardship Program.

Advocates of proposal #6 on the shareholder ballot argue that Walmart is underperforming due to problematic incentive structures dictating senior executives’ bonuses and pay structure. For example, they argue that CEO Mike Duke’s $18.1 million pay for this year (down slightly from $18.7 million in the previous year) was artificially high due in part to lower return on investment goals. Supporters of proposal #6 argue that this, coupled with problematic adjustments in bonuses based on factors that are “beyond the control” of executives lead to inflated executive pay despite relatively underwhelming performance by the company’s leadership. Moreover, the group has expressed concern over the company’s tendency to cannibalize the sales of existing stores through the creation of new stores in close proximity.

“I’ve been a Walmart shareholder for 20 years, and an associate for even longer,” said Mary Tifft, an OUR Walmart member and 24 year employee of the company. “Walmart used to be a good company, one that I was proud to work for, but I’m afraid the company has lost its way. We think this proposal is an important step in getting the company back on track.”

Shareholders will gather in Bentonville, Arkansas to vote on the proposal in early June. In the meantime, the company will likely face a number of questions related to executive incentive structures in relation to the company’s long-term potential for growth in light of store cannibalization.

Walmart released its annual Global Responsibility Report earlier this week. As environmental groups begin to respond to the company’s claims, many are questioning Walmart’s attempt to roll out a shiny new image of an eco-friendly Walmart. In terms of sustainability, it appears that the big news may not be what is in the report, but instead what was left out.

Today the Institute for Local Self-Reliance (ILSR) and Food and Water Watch released a ten point list detailing how despite all the green talk, Walmart fails in practice. According to the organizations’ report, Top Ten Ways Walmart Fails on Sustainability, “While Walmart’s sustainability campaign has done wonders for its public image, it has done little for the environment. In fact, Walmart’s environmental impact has only grown over the last seven years.”

A snap shot of the list is featured below, but the full report can be read here.

Top 10 Ways Walmart Fails on Sustainability:

1. Selling Shoddy Products – poorly made products lead to major waste
2. Reducing Waste According to Who? – waste reduction measurements don’t take all waste into account
3. Lagging on Renewable Energy – despite big talk, in 2011 Walmart still derived less than 4% of its electricity from renewable sources
4. Increasing Greenhouse Gases – from 2005 to 2010, Walmart’s greenhouse gas emissions grew by 14%
5. Voraciously Consuming Land – the company’s frantic expansion has devoured valuable habitat and led to increased pollution
6. Financing Anti-Environment Candidates – since 2005, almost 60% of Walmart’s political contributions have gone to anti-environment politicians
7. Consolidating & Industrializing Food Production – Walmart uses its power to “usher in a larger-scale, more industrialized food system
8. Redefining Local – local food production is across all stores, meaning major agricultural states skew the numbers for other states without local sourcing
9. Degrading Organic – Walmart’s version of organic still includes factory farming
10. Spreading Poverty – poverty is a major factor in poor nutrition, and Walmart increases those earning poverty-level wages

“Some of the most serious environmental consequences of Walmart’s business model simply aren’t on the table,” said Stacy Mitchell of ILSR. “Walmart doesn’t talk about them and, despite expending a lot of ink and airtime on the company’s green activities, the news media don’t either.”

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© 2011, United Food and Commercial Workers International Union.