Cynthia Haddad worked as a pharmacist at Wal-Mart for ten years before the retail giant fired her. Wal-Mart claimed that she violated company policies. She claimed that male managers were never fired for the same mistakes. She also had the gall to ask for the same pay as males doing the same job.
Last week, a jury in Massachusetts believed Haddad’s side of the story and awarded her two million dollars.
Also in the news last week, state courts in New Mexico, Missouri, and New Jersey agreed that lawsuits against Wal-Mart could proceed as class-action suits. Thousands of current and former Wal-Mart employees are claiming that they were forced to work off the clock without pay. Workers in Pennsylvania, California, and Colorado have already won millions of dollars from Wal-Mart for similar claims.
These cases are small potatoes, however, compared to the sex discrimination case Wal-Mart faces. Filed in June, 2001, the largest ever civil rights class action lawsuit asserts that Wal-Mart discriminated against women in a variety of ways. In this case, the class includes 1.6 million current and former female employees.
I’ve seen some of the data from this case and the evidence is pretty overwhelming. In every job from cashier to regional vice president, women made less than men. Wal-Mart defended itself by claiming that pay was based on performance and experience. Unfortunately, Wal-Mart’s own data showed that female employees had higher performance and more experience, on average, than male employees.
If you had invested $100 in Wal-Mart stock on June 1, 2001, you would have about $95 today. This seems pretty bizarre considering the fact that Wal-Mart has reported record profit levels every year during this time period.
Personally, I believe that Wal-Mart’s stock price is being held back by the uncertainty associated with these lawsuits. What would happen if a jury decided that 1.6 million women deserved the same award as Cynthia Haddad? That’s 3.2 trillion dollars.
Surely the judgment couldn’t reach that figure, but what if each plaintiff is awarded an average of ten thousand dollars? That’s still 16 billion dollars. Even for Wal-Mart, that’s a huge hit.
Wal-Mart does so many things well, how could they possibly allow such basic human resource blunders? I think the root of the problem was revealed in a 2004 Workforce Magazine article (People Problems on Every Aisle). In that article, a former Wal-Mart human resource manager explained that store-level human resource managers were typically hired off the street with little concern for professionalism. They typically had very little knowledge of human resource practices or employment law.
With little expertise they would also have little power over store managers who were pressured to lower labor costs. You mix it all together and you have people working off the clock and incompetent manager favorites being promoted.
One might still wonder why Wal-Mart’s corporate leaders would allow this to happen. The larger problem at Wal-Mart, and lots of other companies, is that they do not believe in the value of a strong human resource function.
Since they don’t believe in its value, they don’t invest in it. Since they don’t invest in it, they don’t receive any value from it. Then they’ve convinced themselves they were right from the beginning.
I’m not sure if these lawsuits will end up costing Wal-Mart billions or trillions of dollars; but I do know that competent and professionally trained human resource professionals make a positive impact on organizations.
Thursday, June 21, 2007
Thursday, June 7, 2007
The Workplace Smoking Ban
October 1 should be an interesting day in workplaces around Tennessee. That’s the day that the Non-Smoker Protection Act goes into effect. This act was passed last week by the Tennessee House and Senate. The governor will sign it soon.
The Non-Smoker Protection Act will effectively ban smoking in any enclosed work environment. That includes restaurants, company break rooms, and restrooms. There are a few exceptions. Smoking will still be allowed, for example, in businesses with less than four employees, age-restricted venues, and areas with open garage-type doors.
Personally, I’m okay with the ban. My father died of smoking-related cancer at the age of 58. I’ve never smoked and will enjoy going to restaurants and not coming out smelling like an ashtray.
On the other hand, I’m still a fan of the free market and probably would have preferred no ban. Business owners are free to ban smoking in the workplace anytime they want. Likewise, customers and employees are free to patronize and work for companies that fit their preferences.
The name of the act implies that non-smokers will be protected by it. I suppose there’s also some hope that smokers might smoke less, or even quit smoking, if they can’t smoke in the workplace.
Following this logic, I began to wonder if companies might be better off without any smokers. As it turns out, I’m not the first to wonder this. One of the most recent studies found that the average smoker costs their company $4,430 per year in lost productivity. This figure only includes absenteeism and does not include the costs of higher health care expenses and early retirement due to smoking-related health problems.
Before you decide to go out and fire all of your smokers, it’s time for the bad news. You can’t. Approximately twenty-nine states have laws that specifically protect smokers from discrimination. Twenty-one states, on the other hand, allow business owners the freedom to lower their costs by firing smokers.
Tennessee is one of the twenty-nine. Maybe that means that Tennessee is an enlightened state that seeks to protect everyone from cruel forms of discrimination. I don’t think so.
As far as I know, only Michigan protects employees from discrimination on the basis of height and weight. Only Washington, D.C. protects employees on the basis of personal appearance.
In other words, private employers in most states are generally free to fire people who are unattractive, overweight, underweight, or fans of the New York Yankees. Employers who choose to make these bad decisions, however, must also suffer the consequences.
But twenty-nine states have decided that smokers cannot be fired. Oddly enough, these states tend to be tobacco-producing states with very powerful tobacco lobbyists.
Interestingly, Tennessee’s statute only prevents the firing of smokers. That wording seems to imply that Tennessee employers could refuse to hire smokers.
By this point it probably sounds as if I’m being too tough on smokers. But smokers need jobs too; especially if they’re going to be able to pay the new 42 cent per pack tax.
I would actually prefer to see employers actively encouraging their smokers to quit. Many companies offer free smoking cessation programs, but very few go as far as providing incentives to participate.
Everyone would benefit from less smoking. Employers would get lower labor costs. Taxpayers would pay less to programs like Medicaid. And more grandkids would get to meet their grandparents.
The Non-Smoker Protection Act will effectively ban smoking in any enclosed work environment. That includes restaurants, company break rooms, and restrooms. There are a few exceptions. Smoking will still be allowed, for example, in businesses with less than four employees, age-restricted venues, and areas with open garage-type doors.
Personally, I’m okay with the ban. My father died of smoking-related cancer at the age of 58. I’ve never smoked and will enjoy going to restaurants and not coming out smelling like an ashtray.
On the other hand, I’m still a fan of the free market and probably would have preferred no ban. Business owners are free to ban smoking in the workplace anytime they want. Likewise, customers and employees are free to patronize and work for companies that fit their preferences.
The name of the act implies that non-smokers will be protected by it. I suppose there’s also some hope that smokers might smoke less, or even quit smoking, if they can’t smoke in the workplace.
Following this logic, I began to wonder if companies might be better off without any smokers. As it turns out, I’m not the first to wonder this. One of the most recent studies found that the average smoker costs their company $4,430 per year in lost productivity. This figure only includes absenteeism and does not include the costs of higher health care expenses and early retirement due to smoking-related health problems.
Before you decide to go out and fire all of your smokers, it’s time for the bad news. You can’t. Approximately twenty-nine states have laws that specifically protect smokers from discrimination. Twenty-one states, on the other hand, allow business owners the freedom to lower their costs by firing smokers.
Tennessee is one of the twenty-nine. Maybe that means that Tennessee is an enlightened state that seeks to protect everyone from cruel forms of discrimination. I don’t think so.
As far as I know, only Michigan protects employees from discrimination on the basis of height and weight. Only Washington, D.C. protects employees on the basis of personal appearance.
In other words, private employers in most states are generally free to fire people who are unattractive, overweight, underweight, or fans of the New York Yankees. Employers who choose to make these bad decisions, however, must also suffer the consequences.
But twenty-nine states have decided that smokers cannot be fired. Oddly enough, these states tend to be tobacco-producing states with very powerful tobacco lobbyists.
Interestingly, Tennessee’s statute only prevents the firing of smokers. That wording seems to imply that Tennessee employers could refuse to hire smokers.
By this point it probably sounds as if I’m being too tough on smokers. But smokers need jobs too; especially if they’re going to be able to pay the new 42 cent per pack tax.
I would actually prefer to see employers actively encouraging their smokers to quit. Many companies offer free smoking cessation programs, but very few go as far as providing incentives to participate.
Everyone would benefit from less smoking. Employers would get lower labor costs. Taxpayers would pay less to programs like Medicaid. And more grandkids would get to meet their grandparents.
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