Wal-Mart Stores Inc., trying to fend off lawsuits claiming it illegally fired corporate whistle-blowers, has hired the former chief lawyer for the Department of Labor, Eugene Scalia, and has begun to fire back at its accusers.
Three former employees claim they were fired for reporting misdeeds within the company, including relying on Latin American suppliers who forced women to take pregnancy tests and using staff members at a Texas optical laboratory to do car repairs for supervisors.
Wal-Mart denies it retaliated against the employees, but the allegations challenge a pillar of the company's corporate culture -- a guarantee that its 1.2 million U.S. employees can complain about any supervisor without fear of retribution. That promise, known as the "open door policy," could be seriously undermined if the employees win their cases, lawyers said.
The company said all three were fired for misconduct, not for sniffing out wrongdoing. Lawyers for the employees say the retailer is taking a hardball approach -- disclosing potentially damaging allegations about the workers' conduct early in the legal process.
It has accused one of fraternizing with a female subordinate, a second of failing to disclose a felony conviction on his job application, and a third of doctoring a college transcript on a job application.
Mona Williams, a Wal-Mart spokeswoman, said the retailer has become "a popular target" for employment lawsuits. "If an associate has been treated unfairly, we want to make it right. But we have absolutely no tolerance for those who think they can make a quick buck off Wal-Mart by crying wolf loudly and often."
Steve Kardell, who is representing two of the former employees, said the company's tactics "suggest it is very worried about these cases" and the consequences for its image.
Wal-Mart says that for a company of its size, it faces relatively few employee lawsuits in the United States -- 318 in 2004, or roughly one lawsuit for every 3,773 employees. Of those, it said, 217 were settled, 52 were dismissed and 37 were won through summary judgment. Of 12 that went to trial, Wal-Mart won 10.
The three pending cases vary widely. Jared Bowen, a former Wal-Mart vice president, said he was fired for blowing the whistle on Thomas M. Coughlin, who was ousted from Wal-Mart's board after allegedly misusing up to $500,000 in corporate funds.
Wal-Mart countered that Bowen participated in the very activities he challenged. Bowen "raised the issues months after he became aware of them, out of fear that his own misconduct was about to be discovered," said Marty Heires, a company spokesman.
The company also released documents it said show that Bowen submitted a forged college transcript with an inflated grade point average -- giving himself a 3.5, versus the 2.1 on an official version -- when applying for a job at Wal-Mart's headquarters. Bowen's attorney acknowledged that there was a discrepancy.
James W. Lynn, a mid-level manager at Wal-Mart who oversaw inspections of Wal-Mart suppliers in Central and Latin America, alleges he was fired for documenting "abysmal" factory working conditions, such as the pregnancy tests, padlocked fire escapes and lack of toilet paper, according to his lawsuit.
