Meet the New Boss, Same as the Old Boss?

Replace my name with yours and my “name” with the ridiculous name of your choosing, and tell me you did not have this exact conversation at some point in your early teenage years:

Tim: I hate my name. It’s stupid. I don’t want to be called Tim anymore.
Mom/Dad/Gramma/Buddies: Well, what do you want to be called?
Tim: Bor.
Them: …
Bor: He’s the Father of Odin. Norse God of War.
Them: Okay, Tim.
Tim: Dammit!

Well, Wal*Mart announced last week that it doesn’t like it’s name anymore, and in an effort to be the hip kid when it goes to highschool, it wants everybody to start calling it… Walmart. They also took that little [chik] from the corner of their ads that looked like it was loading a Youtube video and put it at the end of the word (See new logo, infra).

The logo adjustment is part of a savvy marketing shift that includes new store facades and slogans and locally-grown produce and everything.

Everything but an end to labor problems, of course. Yeah, WM’s on the hook again – this time in Minnesota – for $6.5 million, PLUS fines of up to $1,000 per violation. I know what you’re saying: a grand? That’s the punchline? Well, a grand per violation. And this is Wal*Mart – er, Bor – er, Walmart – so this is a class action. And there are somewhere around two million violations.

That’s $2 billion plus in violations possible. Apparently, the managers up in the North Star State haven’t been paying their employees when they work over their breaks. If that sounds familiar, this happened to Wal*Mart (remember them?) in Philly in ’06 ($140 mil) and California in ’05 (>$200 mil). They also settled a similar case in Colorado for $50 million. Oh – and there’s about 70 more warming up all over the country.

The case – if you don’t let the WM fanatics get in your way – brings up a lot of policy questions about HR and Corporate L&E decisions that are not easy to answer. The management of the Stores of 10,000 Lakes say they were pressured to cut payroll costs by Walmart brass in Arkansas, and since the stores were already understaffed, they started shaving time here and there to save enough to get their own bonuses.

WM is blaming the store managers, saying it’s company policy to pay workers for every hour they work. But if you understaff your stores and then set corporate policy to shave payroll figures, is that deliberate on the corporation’s part? Is it business judgment?

I don’t know. A company should be able to cut costs as needed to be as profitable as possible. But if you’re understaffing your stores, and working people as hard as retail employees work (which is really, really hard, if you were privileged enough to avoid such employment), situations like this are next to inevitable.

All I’m trying to say is people aren’t going to think your cool if you show up with a new name and some fancy clothes and the same personality.

Will Supreme Court’s Reduction of Exxon’s Damages Effect Employment Suits?

A while back, Exxon lost a lawsuit over the notorious Valdez spill (shocker), and a jury said they had to pay $500 million to compensate the plaintiffs, and $5 billion in punitive damages. Yesterday, the Supreme Court said that award was excessive, and reduced the punitive damages to $500 million, equal to the actual damages.

Richard Bales at Workplace Prof Blog has a brief commentary on the effect yesterday’s decision could have on employment suits.

He quotes Lyle Denniston at SCOTUSblog to point out the underlying importance of the Exxon decision:

To look at it only [in maritime and common law cases] is to miss the signal that the Court is giving – that is, it has grown highly skeptical that it can spell out, in words rather than numbers, workable guidelines that could bring some sense – some consistency – to punitive damages awards.

And in numerical terms, as Denniston points out, the Court has fixed that ratio at 1:1.

In other words, if you have $500 million in ACTUAL damages (like, what it costs to clean up Alaska), the maximum PUNITIVE damage award will be $500 million – and that’s for a case where the captain was drunk.

Bales thinks this could have an awful effect on employment cases. His argument is: since damages in employment cases are usually determined by lost wages, and lost wages are (obv) low for low-income workers (or those unlucky enough to find another job), the actual damages won’t cover the cost of trying the case. So an attorneys’ only real incentive for taking these cases is the potential recovery of hefty punitive damages. If the punitive damages are capped at 1:1, then the recoveries would be so small that lawyers would stop taking the cases altogether. And then none of us would have anything to do.

But I think it’s a little premature to be sounding the end of high-punitive employment cases. First, the Court wasn’t making a constitutional decision here, so the 1:1 ratio isn’t binding on lower courts. Denniston’s argument was that the Court is tired of trying to explain punitive damages, and is going to push other cases to use Exxon math, but that misses Souter’s point.

Denniston focuses on a note at the end of the case in which Justice Souter says the 1:1 ratio “may be the constitutional limit.” But what he doesn’t mention is that this idea comes from the Court’s previous decision in State Farm v. Campbell, which said that a single digit ratio (i.e., 9:1 or less), not a 1:1 ratio, is reasonable for punitive damages. State Farm only mentions the 1:1 ratio when ACTUAL damages are really, really big on their own.

In other words, let’s say you work in BigBox USA in the Cheap Crap department, and they fire you. You sue, and your lost wages add up to $15,000. Under State Farm, I think, the court will be much less concerned about holding you to an equal ratio for punitive damages than in cases like Exxon or Phillip Morris where the actual damages were 50 to 500 times that much. Under State Farm, you could be looking at punitives at a 9:1 or 8:1 ratio, depending on the severity of the employer’s actions. That’s $135,000 in punitives, $150,000 total. And I think you could find a lawyer for that kind of return.

If you can’t, actually, give me a call.

Wal Mart to pay $49 Million More – Official Response: “Meh.”

The latest decision in Wal-Mart’s ongoing legal battles with its employees is in, and this one is probably going to increase the legal flies the retail giant will be swatting at in the near future.

A Pennsylvania judge has tacked $49 Million in attorney’s fees onto a $141 Million judgment for unpaid overtime against the nation’s second largest employer. The plaintiffs (187,000 of them) were awarded $141 Million earlier this year.

This has got to be tough for a retailer that doesn’t even like paying its own attorney’s full price.

Just based on its two recent wage-and-hour suits, Wal Mart is down about $353 Million, and it is marking a distinct shift in employment litigation, with major L&E firms noting the biggest danger to employers is no longer discrimination, but wage and hour class actions.

Wal Mart, of course, is dealing with both.

On top of this $181 Million, and the California lunch-break judgment earlier this year for $170 Million, Wal Mart is facing two gender discrimination class actions, one of which is currently open to 1.6 million current and former female employees (that makes it the largest civil rights action in history, for anyone keeping score), a suit over its refusal to add birth control to its health benefits, and a bevy of single-plaintiff actions too long to list.

More info can be found on the company’s Wikipedia page. The Arkansas giant is appealing all of the judgments, of course, but they’re probably not reeling as much as you’d think – Wal Mart’s 3d Quarter revenues clocked in just under $3 Billion. Yeah, with a B.