Walmart

Walmart Supercenters (hereafter Walmart) has a full offering of groceries and general merchandise in
a single store. Walmart offers to its customers a one-stop shopping experience and is the largest private
employer in the US as well as being the world’s largest retailer. It has more than 10,130 retail units under
69 different banners in 27 countries. They all share a common goal: ‘Saving people money so they can
live better’. Walmart employs 2.2 million associates worldwide68 and generated net sales of $ 443 billion
during the fiscal year of 2012.
Walmart was founded in 1962, with the opening of the first Walmart discount store in Rogers,
Arkansas (US). The company was incorporated as Wal-mart Stores, Inc. on 31 October 1969. The
company’s shares began trading on OTC (Over-The-Counter) markets in 1970 and were listed on the
NYSE two years later.
Question 1
Walmart has faced many obstacles over the years. It seems that legal and social challenges have acted as
important reasons for the development of its code of conduct and annual reporting. It commenced as a
national class action against Walmart. Arana, on behalf of themselves and others similarly situated, allege
that female employees in Walmart and Sam’s Club retail stores were discriminated against based on their
gender. 

In 2004, the US District Court for the Northern District of California certified a national class of female
employees challenging retail store pay and management promotion policies and practices under the
Federal Rule of Civil Procedure Article 23. Walmart appealed to the Ninth Circuit in 2005, arguing that
the seven lead plaintiffs were not typical or common of the class. Walmart appealed to the Supreme Court
in August 2010 after the US Court of Appeals for the Ninth Circuit upheld class certification. Finally, the
situation changed on 20 June 2011 when the US Supreme Court reversed the class certification. 

The Court held that the nationwide class certification approved by the lower courts was not consistent
with the Federal Rule of Civil Procedure Article 23 governing class actions. It would have been the
largest class action lawsuit in US history. Despite the Supreme Court resolution, time, money and efforts
invested up to this point, the case did not end there. In October 2011, the plaintiffs’ lawyers filed an
amended lawsuit limiting the class to female Walmart employees in California. 

This suit is expected to be the first of many additional class action lawsuits against the retailer at the state
or regional level. The new lawsuit, filed in the US District Court for the Northern District of
California, alleges discriminatory practices against more than 90,000 women regarding pay and job
promotion as well as requiring non-discriminatory pay and promotion criteria. 

Walmart caught using child labor in Bangladesh

At the end of 2005, the Radio Canada programmer Zone Libre made public the news that Walmart was
using child labor at two factories in Bangladesh.
Question 2

Walmart developed its first Code of Conduct ‘Standard for Suppliers’ in 1992,95 which mainly
focuses on quality standards for suppliers only. However, Walmart’s first general report, which
includes suppliers, customers and associates, was generated in 2006.Nowadays, Walmart has
been qualified as a ‘global legislator’ in CSR policies. The 2005 Report on Ethical Sourcing
reported that Walmart had ceased to do business with 141 factories, primarily because of
underage labor violations. 

The Report also contains a chart with the main violations found during the audits. Gender
discrimination was not mentioned at any stage throughout the whole document. Walmart’s 2005
and 2012 COC ‘Standard for Suppliers’ explicitly establish that Walmart would not tolerate the
use of child labor. The 2005 COC sets the age of 14 as the minimum age for suppliers and
subcontractors to hire workers. 

Walmart’s zero tolerance policy for underage workers was changed in 2005. If a single underage
worker was found in a factory, Walmart ceased business ipso facto. At the beginning of 2005, if
two underage workers were found, the factory would receive a warning and had to change and
correct in the follow-up audit. If more than two underage workers were found or the company
did not make corrections, the factory was permanently banned from Walmart’s production. 

This decision was based on NGO advice from the Bangladesh case mentioned in the above
section. Currently, Walmart publishes a full and complete report on CSR issues called ‘Global
Responsibility Report’ which covers the three dimensions of ‘People, Planet, Profit’. Walmart
has a Gender Equality and Diversity gender policy that can be found in its ‘Global Responsibility
Annual Report’. In 2009, Walmart took the commitment one step further with the incorporation
of the Advisory Board on Gender Equality and Diversity. 

The board is aimed at providing equal and enhanced opportunities for all in top leadership
roles. These policies have generated an increase in female officials and managers from 23,873
employees in 2005 to 25,246 employees in 2010. These criteria are established and measured by
Walmart at the end of the 2012 report. Walmart indicates every year its completed goals and the
progress in the ones that have not yet been achieved. 

An example of quantifiable measures is creating a zero waste Walmart by eliminating landfill

waste from US stores by 2025. Although Walmart does not follow the GRI Guidelines, it has
measurable targets on audits. These validation audits ensure that the ICTI CARE process is
properly implemented and that it meets Walmart’s Standards for Suppliers.