WAL-MART

WASHINGTON -- Retailer Wal-Mart Stores Inc. (WMT) has agreed to pay $750,000 to resolve charges it failed to report exercise equipment hazards.

The Consumer Product Safety Commission said Friday the civil penalty resolves a lawsuit filed in May 2001 by the Justice Department on behalf of the safety agency.

In the suit, the government charged Wal-Mart with failing to report safety hazards associated with exercise gliders it sells.

"This case demonstrates that retailers, like manufacturers, importers, and distributors, are required to report consumer product defects and injuries to the Consumer Product Safety Commission in a timely manner, and that there are penalties for those who fail to do so," said Hal Stratton, the commission chairman.

"Prompt and timely reporting by companies will allow us to act swiftly to protect consumers from injuries," he said.

Under the law, manufacturers, distributors and retailers must immediately report product hazards to the CPSC.

The government charged Wal-Mart failed to report hazards with Weider and Weslo brand exercise gliders, despite knowing of at least 29 consumers injured while trying out the gliders in Wal-Mart stores across the country.

"The injuries included fractured vertebrae, herniated discs, and a compression injury to a woman's spine," the CPSC said.

The regulator says the lawsuit and civil penalty settlement represent the first time a retailer has been sued and paid a penalty for failing to report a safety problem where the retailer was not also an importer or private labeler.

Under the settlement, Wal-Mart also agreed to establish internal recordkeeping and monitoring systems to keep track of information about product safety hazards, the CPSC said.

Asked why the retailer settled, Wal-Mart spokesman Bill Wertz said the company shares the goal with the CPSC of product safety.

Wertz also said it wanted to avoid the costs of a trial.

"We acknowledged no wrongdoing," he said. "We believe we acted responsibly in this case."

-By Jeff Bater, Dow Jones Newswires; 202-862-6616; Jeff.Bater@dowjones.com

Female managers of Wal-Mart Inc. were required to attend strip clubs with male colleagues on business trips, according to a brief to be filed today in federal court for a group of California women suing the nation's largest retailer for job discrimination.

The women's declarations also say they had to take business meetings at Hooters, a restaurant where food is served by amply endowed women clad in tight shirts.

And the top brass of Wal-Mart's Sam's Club stores referred to female employees in weekly executive meetings as "little Janie Qs" and "girls," even after a woman vice president complained. The executive, who no longer works at Wal-Mart, said her complaint earned her a warning against being overly judgmental.

The testimony was collected to support a request that the case proceed as a class action on behalf of more than 1.5 million women employed by Wal-Mart since late 1998. The proposed class dwarfs the size of other employment discrimination cases and, if approved, would make the suit one of the largest against a corporation.

The brief, which comes 17 months after the suit was filed in U.S. District Court in San Francisco, paints the most detailed picture yet of the scope and effect on women of the alleged discrimination. It argues that a gender pay gap; which plaintiffs' experts say averages about 5% throughout the company; is a reflection and result of a culture of bias that flows from Wal-Mart's Bentonville, Ark., headquarters and permeates nearly every store.

Wal-Mart spokeswoman Mona Williams denied any pervasive bias within the company and disputed the plaintiffs' analysis of the evidence.

She said that experts who analyzed payroll data for the company found that "nine out of 10 times, women and men are paid equally," and that women are promoted at a rate consistent with the rate at which they apply for positions.

"We feel there is room for improvement with the pay, but from a promotional standpoint, it's absolutely fair," Williams said.

The 61-page brief filed by plaintiffs pulls testimony from more than 100 depositions of executives and the voluntary declarations of 110 female employees. In them, some women described being discouraged from applying for management positions and jobs in sporting goods, meat departments and other areas dominated by men.

Others recalled instances where male managers not only acknowledged but endorsed a pay gap between men and women.

One woman quoted in the brief said she asked why her pay was lower than a less qualified male worker. Her department manager's reply: "You don't have the right equipment. You aren't male, so you can't expect to be paid the same."

Brad Seligman, a lawyer for the plaintiffs, said the attitude conveyed in the comment is not an aberration.

"We've got more than 100 declarations from 30 states," said Seligman, director of the Oakland-based Impact Fund, a legal advocacy organization. "It's not just a problem in the Deep South or Alaska. It's a constant story that we hear all across the country, and it's consistent with what the numbers show."

Plaintiffs contend that male managers frequently tap male subordinates for the unposted jobs, leaving women out of the loop.

Williams said that can no longer happen. The company began posting entry-level management positions for the first time in January. She said Wal-Mart's focus on growth had precluded it from requiring such postings until then. Wal-Mart also is rolling out companywide guidelines that would remove some subjectivity from pay raises by basing them on performance evaluations, she said.

"We will be implementing quarterly reports to make sure that men and women are paid equally and are promoted at equal rates," she said.

Until recently, Williams said the company has left hiring, pay and other employment responsibilities largely up to store managers. If there is truth to any of the allegations of bias, Williams said, such instances would be the fault of individual managers whose behavior did not reflect the intent of the corporation.

"The entire company is very decentralized," Williams said. "Store managers run their stores. They have an awful lot of autonomy to make the right decisions for their stores. Sometimes they've made the wrong decision, but there is absolutely no basis for any kind of systemwide discrimination at Wal-Mart."

Williams said the declarations filed by women in support of the suit amount to a tiny fraction of the 700,000 women currently employed by the company.

"They are exceptions, and we cannot afford to be judged by these exceptions," Williams said.

The plaintiffs portray the company as a retail empire tightly controlled by headquarters, which uses state-of-the-art technology to regulate everything from the temperature to the music inside stores.

"But when it came to looking at disparities in pay for women and even, to a great extent, the absence of women from management, they showed a remarkable lack of curiosity," said Joseph M. Sellers, a lawyer with Cohen, Milstein, Hausfeld & Toll in Washington, who is representing the plaintiffs. "For a company that makes a penchant, and indeed relies for success, on closely monitoring every aspect of activity in its stores, its lack of interest or curiosity is telling."

The plaintiffs are seeking back wages equivalent to what they believe they would have earned were it not for the alleged bias. They also are seeking compensation for promotions allegedly lost because of discrimination.

Lawyers for the plaintiffs said they had not calculated the possible damages. But, if the case becomes a nationwide class action and any liability is found, they could add up quickly. In the largest settlement of such a case, Voice of America agreed three years ago to pay $531 million to 1,100 women rejected for jobs at the former U.S. Information Agency.

Wal-Mart is scheduled to file its brief in opposition to the class action in early June. A hearing on the class question is set for July.

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