ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Wednesday, September 14, 2005

Walmart is rich! Let's sue them!

A lawsuit was filed (in California of course) against Walmart alleging that they failed to "meet its contractual duty to ensure that its suppliers pay basic wages due; forced them to work excessive hours seven days a week with no time off for holidays; obstructed their attempts to form a union; and, made false and misleading statements to the American public about the company's labor and human rights practices.

From the article:

Walmart maintains a Supplier Standards Agreement with its foreign suppliers that incorporates adherence to its corporate code of conduct as a direct condition of supplying products to Walmart. By incorporating the code of conduct into the supply agreement, it creates a contractual obligation enforceable by the workers supplying to Walmart, who are the intended beneficiaries of the code's worker rights provisions.

Umm.. Ok, so let me get this straight, Walmart, a giant retail store in the US:
  1. Maintains a Supplier Standards Agreement with its suppliers. No surprise there, I'm sure lots of companies do that with their suppliers.
  2. That Supplier Standards Agreement is a contract.
  3. That contract binds Walmart to an obligation to the employees of that supplier.

Now I've never been in law school, but I seem to remember something about a 3 test issue with whether something is a contract or not. Offer, consideration, acceptance. Where does Walmart do that here with the employees? It seems to me that they only have a contract with the supplier, which probably maintains that if the supplier doesn't live up to Supplier Standards, then Wal-mart will no longer accept them as a, you know, Supplier.

This smells like a total shakedown to me, and in a just world, the employees would simply lose their job, because, you know, the supplier would no longer be a supplier, since the supplier couldn't live up to their Standards.

Let's take it a step further though, if as the article maintains its the Standards Agreement that binds Walmart to the employees that were allegedly wronged, then a remedy for future actions (and for other companies) would be simply to not have a Standards Agreement. This in fact will cause conditions for these foreign workers to worsen, since now no company in their right mind would have a Standards Agreement that a supplier might not live up to.

More from the article:
The other class of Plaintiffs will be employees of California businesses which have been harmed by Walmart's unfair labor practices, including Wal-Mart's false representations regarding compliance with its code of conduct, and which as a result have lost business and/or a competitive financial advantage. Within this class are also trade unions members who were forced to make wage and benefit concessions to allow their employers to try to compete with Walmart.
So not only is Walmart being sued because someone didn't live up to standards that Wal-mart set as a condition for being a supplier. It's being sued because it was too successful, and its competitors workers had to take pay cuts. Walmart should countersue the unions for demanding wages that increase the cost of the labor pool.

This class of plaintiffs will bring their claim under California's Unfair Business Practices Act, Section 17200.

And if Section 17200 allows such a suit to come to fruition, then California has truly become the anti-business state.

Still More:
The workers are represented by Terry Collingsworth, executive director of the Washington, D.C.-based International Labor Rights Fund, and Los Angeles area co-counsels Dan Stormer of Hadsell and Stormer, and Paul Hoffman of Schonbrun, DeSimone, Seplow, Harris & Hoffman. This legal team recently represented Burmese plaintiffs who sued Los Angeles-based Unocal corporation for using forced labor during the construction of a natural gas pipeline in Burma. The suit was settled earlier this year when the Burmese plaintiffs accepted a cash offer from the company that Business Week estimated to be in the vicinity of $30 million.
So its just another shakedown for the plaintiff's attorney's. I think they may have bitten off more they can chew with an opponent such as Walmart. My understanding is that they rarely settle cases, preferring rather to go to trial.

One can only hope that this is thrown out before it ever gets to trial.

Your Co-Conspirator,
ARC: Brian