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Wal-Mart Found Guilty of Not Paying Overtime

NEW YORK — Guilty.<br><br>That was the verdict from a federal jury Thursday against Wal-Mart Stores Inc. for forcing employees to work unpaid overtime between 1994 and 1999.<br><br>Damages will be decided in a separate trial to take place at a...

NEW YORK — Guilty.

That was the verdict from a federal jury Thursday against Wal-Mart Stores Inc. for forcing employees to work unpaid overtime between 1994 and 1999.

Damages will be decided in a separate trial to take place at a later date.

The lawsuit, filed in U.S. District Court in Portland, Ore., is the first one to be heard among many similar actions the world’s largest retailer is facing.

The suit, for which opening arguments took place Tuesday, was filed by two former employees who held managerial positions at Wal-Mart stores in the Salem area. It alleged that the company forced employees to work after clocking out. Moreover, the plaintiffs claimed Wal-Mart reprimanded employees who claimed overtime.

“We think it’s great,” said Jill Cashen of the United Food & Commercial Workers International Union, which has been trying to organize workers at several Wal-Mart facilities for several years. “We’re happy that when facing a jury trial, a jury believed what we have been saying for years — that Wal-Mart cheats its employees.”

Wal-Mart’s attorney Rudy Englund had no comment after the verdict, but earlier had stated that company policy expressly forbids uncompensated overtime.

In an unrelated development, John Fleming has been promoted to president and chief executive officer of Walmart.com, after heading up the Web site as chief operating officer since Jeanne Jackson stepped down as ceo of Wal-Mart Stores Inc.’s Internet unit in January 2002.

As ceo, Fleming will continue to report to Tom Schoewe, executive vice president and chief financial officer of the company. The role of chief operating officer will not be filled, said a company spokeswoman.

As reported, Wal-Mart pulled its apparel assortment from the Web in April 2001. “We do plan to offer apparel at some point, but there are no specifics as to time line or products at this time,” the spokeswoman noted.

This story first appeared in the December 20, 2002 issue of WWD.  Subscribe Today.