Tuesday, December 23, 2008

Competitor News: Retiring Wal-Mart CEO Lee Scott's $640 Million Christmas Present to Incoming CEO Mike Duke - 63 Labor-Related Lawsuits Are Resolved

Wal-Mart Stores, Inc. today agreed to pay up to $640 million to settle 63 separate federal and state class action lawsuits in which Wal-Mart store employees argued they were cheated out of pay by the mega-retailer and forced to work at times through regular lunch hour and other breaks.

Read the coverage at the links below:

New York Times: Wal-Mart Settles 63 Lawsuits Over Wages... CNN/Money: Wal-Mart to settle wage suits...Bloomberg: Wal-Mart Will Pay Up to $640 Million in Settlement.

Others: Reuters - The Associated Press - BBC News - MarketWatch.

As Fresh & Easy Buzz reported on November 21, 2008 [Breaking News: Wal-Mart Stores, Inc. Names New CEO to Replace Lee Scott; USA Chief Castro-Wright Elevated to Vice Chairman Effective Immediatly] current Wal-Mart CEO Lee Scott will step-down as CEO at the end of January, 2009, and turn over the mantle of Sam Walton to current Wal-Mart head of global operations Mike Duke.

The class action lawsuit situation has been hanging over CEO Lee Scott's and Wal-Mart's heads for a number of years now -- millions in lawyer's fees and much bad publicity. Therefore it appears Lee Scott has decided to give incoming CEO Mike Duke a nice Christmas present just two days before Christmas Day -- the resolution to the 63 class action lawsuits.

Talk about (almost) "The Night Before Christmas" goodies for Mr. Duke. Having these legal cases off of his plate as incoming CEO will be a big relief, as it's something no incoming CEO wants to deal with. And it's likely CEO Scott wanted to leave with his (legal) plate clean, as well. No CEO wants to leave 63 labor relations-based class action lawsuits filed during his tenure against the company he or she leads on the table after he leaves, after all. They're not the type of "second helping" new, incoming CEO's are hungry to gobble down. Nor are they a desired legacy for an outgoing CEO like Scott to leave the company. So he didn't.

When you think about it, a little over half a billion dollars is a good deal for Duke -- and for Wal-Mart. After all, the costs of inheriting the legal mess and dealing with it would be far higher than that in total. For Mike Duke, one could even say the timing of the resolution is, like the MasterCard credit card commercial says -- Priceless.

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