Meet the Enron of Workers' Rights By Liza Featherstone
Liza Featherstone, a writer in New York City, is working on a forthcoming book about Dukes v. Wal- Mart.
Wal-Mart, the nation's largest private employer and the richest company in the world, may just be the new Enron.
The mass merchandiser has been widely celebrated as a paragon of business success, just as Enron once was. It tops the Fortune 500, and was listed this year as one of Fortune's "Most Admired Companies." But Wal-Mart, the target of a massive and historic lawsuit, is a scandal, not a praiseworthy business model.
Dukes v. Wal-Mart - named for its lead plaintiff, Betty Dukes, who still works at a Wal-Mart store in Pittsburg, Calif. - charges the company with sex discrimination in promotions, training and pay. On Monday, lawyers representing the plaintiffs filed a class certification motion before a San Francisco federal judge, asking him to allow the case to proceed on behalf of more than 1.5 million women, making it the largest employment discrimination case in history.
Women make up more than two-thirds of Wal-Mart's hourly workers, but the company remains virtually untouched by the women's liberation movement. Its competitors had a larger percentage of female managers in 1975 than Wal-Mart had achieved in 1999. Even internal company memos acknowledge that Wal-Mart lags behind its competitors in the promotion of women - quite an accomplishment given the retail industry's longtime record of systemic sex discrimination.
And yet, a recent Business Week headline exemplified the worshipful attitude of the business community: "How Wal-Mart Keeps Getting it Right." Wall Street loves the company's robust stock values, and the rest of the business world is in awe of its profits. Customers love its low prices, not to mention the "one-stop shopping" it offers. At Wal-Mart you can change a tire, buy groceries for dinner, and get a new pair of shoes and some yard furniture - a set of errands that once would have required a long afternoon of visits to far-flung merchants. Underpaid, over-worked America delights in spending as little as possible, all in one place.
But the retailer keeps those prices down and the profits and stock prices soaring by violating workers' rights, especially those of women. It doesn't need Enron's "creative accounting."
Experts hired by the Dukes plaintiffs to analyze Wal-Mart's own work force data find that at every level of the company, women are paid less than men who hold the same jobs. Women testify that when they've ventured to ask why, their Wal-Mart superiors have come up with some astoundingly primitive answers. A South Carolina employee was told that "God made Adam first," while an Arizona manager was informed she "didn't have the right equipment." Perhaps even more disturbingly, one plaintiff, a divorced mother of two, was assured that a man was paid more because he had "a family to support."
In addition to sex discrimination, Wal-Mart is notorious for ignoring federal laws protecting workers' freedom of association. The company has been found guilty of retaliating against - even firing - workers for union organizing.
Wal-Mart has also been accused, in class action suits filed in more than 30 states, of breaking federal overtime laws. In many cases, workers say, managers locked the store doors and would not allow workers to leave.
Workers who make clothing and toys sold at Wal-Mart - mostly young women in Asia - aren't treated much better. The company is frequently criticized by human rights groups like the National Labor Committee and the Lawyers' Committee for Human Rights for its less-than-half-hearted efforts to improve sweatshop conditions in factories making Wal- Mart goods.
Yet we're not hearing as much about Wal-Mart as we heard about Enron. Its crimes receive comparatively little media coverage, and while Enron was a poster child, albeit briefly, for politicians hoping to sound tough on corporate corruption, no politicians are promising to punish, much less reform, Wal-Mart.
Ken Lay is considered an embarrassment, a fallen idol of the now-forgotten New Economy, but the late Sam Walton is still regarded as a folk hero whose heirs carry the victory torch of a noble and profitable tradition. That's because while cheating shareholders is considered an outrage, cheating workers - especially female workers - is too often shrugged off as business as usual.
It shouldn't be. Workers deserve fairness, and Wal-Mart deserves to be the new Enron, a symbol of shameless corporate greed and hubris. Unlike Enron, though, Wal-Mart - which is growing so fast that analysts expect it to run afoul of anti-trust laws by 2009 - isn't going away. Neither should its critics, or the workers brave enough to stand up to the discount behemoth in court.