Pay Snubs

Wal-Mart's biggest bargain? It may be squeezing free overtime out of workers.

Judy Danneman's shift at Wal-Mart started at 6 a.m., before the store even opened, and she always arrived on time. She and fellow employees would have to wait outside in the darkened parking lot until an assistant manager showed up to let them in.

But the manager was often up to a half-hour late. When they were finally allowed to clock in, the workers wouldn't get credit for time spent standing outside. Those minutes eventually added up to several hours.

Danneman, a recently widowed mom supporting three young children, was hired in 1990 at $8.10 an hour. She was desperate for every dollar she could squeeze out of an eight-hour shift.

Lloyd represents angry former Wal-Mart employees across the South.
Monica Fuentes
Lloyd represents angry former Wal-Mart employees across the South.

"When you're surviving on a single income, you can't afford to give up a half-hour," she says. "Eight hours paid my phone bill. Eight hours paid my water bill."

In fact, her workday stretched even longer. Even though her shift ended at 3 p.m., Danneman says, it was common to work until 3:30 or 4 p.m. -- and not get a dime for it.

"At three o'clock we dutifully went to the clock and clocked out and went back to our departments for another half an hour, because you could not leave until your department was straightened up," says Danneman. Wal-Mart's policy strictly states that working off the clock is not permitted, but Danneman says a culture of fear pervaded -- employees either worked that unpaid overtime or were fired.

"The company took total advantage of the fact that people would do what they were told because they were desperately afraid of losing their jobs," says Danneman.

Danneman stayed with Wal-Mart for almost ten years, eventually getting promoted to management. Once in the higher ranks, she says, she was regularly instructed to make sure employees' time cards showed only 40 hours -- even if they worked much longer.

She was told to not credit workers for paid sick time and vacation time, and says she got in trouble when she tried to treat them right. She finally quit after being demoted, a move she says Wal-Mart made to try to push her out.

Danneman, a Florida resident, is now part of a legal war being waged in 28 states through lawsuits that accuse the world's largest retailer of taking millions of dollars in unpaid hours from workers by not honoring overtime or breaks for rest or lunches. The Florida resident is among the plaintiffs represented throughout the South by Houston attorney Russell T. Lloyd, a former district judge in Harris County. Wal-Mart (its Sam's Club stores are also defendants) has 349 stores in Texas, and there are roughly 300,000 class members in the Lone Star State alone.

The corporation beat back efforts for class action suits in three other states, although plaintiffs in a Brazoria County suit gained class certification in May from state District Judge Ben Hardin in Angleton. Wal-Mart is appealing Hardin's decision, while plaintiffs are challenging the rulings in the other states.

Attorney Lloyd admits the legal wrangling could go on for years, and that plaintiffs shouldn't expect more than $3,000 to $4,000 each in compensation.

Danneman, whose oldest daughter lives in The Woodlands, and other Lloyd clients say it's not the money that matters. It's getting Wal-Mart to realize they can't treat people like indentured servants.

"On the one hand, their business plan is brilliant," says Danneman. "But on the other hand, you have to look at what they've destroyed as they've built. There was nothing given back. And there was so much taken."


Danneman moved to the West Palm Beach area from New York after her husband died so she could be closer to her aging parents. She hadn't worked in almost 20 years, but figured her master's degree in guidance would enable her to get teaching work. But with little recent experience and no Florida accreditation, she struggled to find any job.

"I walked into Wal-Mart with my résumé and an attaché case, and they hired me on the spot," says Danneman, her voice still thick with a New York accent.

Wal-Mart -- founded in 1962 in Rogers, Arkansas, by the late legendary Sam Walton -- prided itself on being like a down-home family, says Danneman.

It came up with brilliant public relations moves like using seniors to greet customers. Employees were encouraged to pay $1 on Fridays for the privilege of dressing out of uniform -- the money went straight to the Children's Miracle Network (and Wal-Mart got a tax write-off).

And it squeezed its payroll. According to Lloyd, Wal-Mart's labor costs are around 8 percent of sales. Most retail stores run at 12 to 16 percent.

Wal-Mart spokesperson Bill Wertz says the plaintiffs' complaints are isolated incidents because company policy is to never work people off the clock.

"Obviously we need to run our business efficiently and profitably," says Wertz, "but we also need to live within the law, and paying our people properly is one of the laws we comply with."

Wertz says Wal-Mart has an open-door policy that encourages employees to report mistreatment to district managers.

Danneman says that's ridiculous.

"The open-door policy is a farce that swings back and hits you in the ass," she says. When Danneman and other employees complained to the district supervisor about a store manager who regularly left the store for four to five hours at a time, the store manager found out, hauled Danneman and the other employees into his office and wrote them up for bad behavior, she says.

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