Workers tell Wal-Mart's darker side

PORTLAND — Testimony in the first of 39 class-action lawsuits to go to trial against Wal-Mart has shown a sharp contrast between actual working conditions and the retailer's heavily advertised image of happy, smiling employees.

Carolyn Thiebes, who works at a Wal-Mart store in Salem, testified that when her department failed to meet company expectations, her boss singled out the personnel manager by hanging a red bandanna near her door for a month for co-workers to see.

Managers also circulated a trophy, sculpted in the form of a donkey's rear end, called "the horse's ass award," Thiebes said.

"It was humiliating," Thiebes testified in tears last week to open a wage-and-hour lawsuit against the company. "That trophy was given so many times... anytime a department failed."

She and four other employees testified that reprimands created an environment of fear that compelled them to work off the clock — without pay — to finish assigned tasks. The pressure worked, they said, because Wal-Mart often built stores in communities that offered residents few alternative jobs.

But the tactics also have made the store a target of unions and advocacy groups, who picketed stores last week in 100 U.S. cities, including Portland, to call for better wages, health benefits and working conditions.

Experts said the management approach arises out of a corporate culture forged by company founder Sam Walton, who, in his drive to keep prices and costs low, put the company's fortunes above all else.

"While I can't say it's a great way to spread a message, it sends a clear message — if my department's hurting the performance of the store, ultimately I'm hurting the performance of the stock and my retirement," said Hal Koenig, associate professor of marketing at Oregon State University's College of Business.

A Wal-Mart spokesman, Bill Wertz, declined to comment, citing last week's order of U.S. District Judge Garr King that all parties to the lawsuit refrain from speaking with the media during the trial.

The $218 billion company employs 1.3 million worldwide, operates 3,300 stores in the United States and made $6.7 billion in 2001. Its aggressive expansion plans during the next five years call for hiring 800,000 more workers, giving the company a work force larger than the U.S. military.

Thiebes and Betty Alderson filed suit against Wal-Mart in 1998, alleging violation of federal and state wage and hour laws. More than 400 Oregonians from 24 stores have joined the class-action complaint.

Thiebes was personnel manager in charge of payroll at Wal-Mart stores in Salem and Dallas. She testified that she routinely docked overtime hours from workers' paychecks, at least once at the direction and in the presence of her managers.

One group of customer-service and snack-bar workers in both stores worked without pay beyond the regular 40-hour work week so often, Thiebes and Alderson testified, that they became known as the "Over 40 Club."

Wal-Mart's attorneys acknowledged in court that employees occasionally worked after clocking out. But they contended workers did so by choice, in violation of company policy.

In opening statements last week, Rudy Englund, an attorney for the company, spent several minutes describing an atmosphere at Wal-Mart of trust, sharing, teamwork and integrity.

Attorneys for the workers described a different situation, which they called the "Wal-Mart dilemma." Top store managers, they said, routinely gave lower managers and workers too much to do while reprimanding them for claiming overtime or leaving work undone.

To avoid losing their jobs, the attorneys said, workers clocked out, then returned to complete their tasks. Daniel Corey, a former lawn and garden department manager for Wal-Mart in Pendleton, said he worked off the clock because he had few options.

"Because it's such a small community, jobs aren't that good there," Corey testified. "You held on to your job. I feared losing my job. I feared getting fired."