Uncle Sam Is Watching You. No Not That Uncle Sam

Hmmm...Looks like boys or Mordor have been getting busy with the eye of Sauron. Wal-Mart defended its security measures after a fired employee went public with allegations he was part of a large surveillance operation that spied on company workers, critics, vendors and consultants. "'Spied' is such a nasty word," said Wal-Mart spokeswoman Sarah Clark. We prefer to think of it as pro-active listening."

The world's largest retailer declined to comment on specific allegations made by former security technician Bruce Gabbard, 44, to the Wall Street Journal. Wal-Mart reiterated that it had promoted Gabbard and his supervisor for recording phone calls and intercepting pager messages. Then fired them for talking about it. "It's sort of our version of 'Don't Ask Don't Tell,'" Clark said. "And they told."

"Like most totalitarian governments, we are allowed to have systems in place, including software systems, to monitor threats to our profit margins, potential union activity and to monitor our people," Clark told reporters. "It's no different than the CIA, NSA, or Costco."

Gabbard confirmed the allegations that he was part of a broader surveillance operation approved by the company. The team, the Threat Research and Analysis Group, was a unit of Wal-Mart's Covert Operations and Market Research Group.

Wal-Mart's Clark noted that the company had gone public with Gabbard's phone monitoring and had self-reported the issue to federal prosecutors to determine if any laws had been broken. "The minute we read the article in the Wall Street Journal, we covered our butts," Clark said. "Umm...let me rephrase that."

Wal-Mart's union-backed critics, whom Gabbard identified as among the surveillance targets, accused the retailer of being paranoid, childish and desperate. "(Wal-Mart) seems like an organization that has a culture that doesn't trust its employees and it certainly doesn't trust its vendors or consultants," said Larry Ponemon, founder of The Ponemon Institute, a research foundation that focuses on privacy and data protection practices of companies.

"What's his point?" asked Clark.

Gabbard told the newspaper that Wal-Mart sent an employee to infiltrate an anti-Wal-Mart group to learn if it was going to protest at the annual shareholders' meeting and investigated McKinsey & Co. employees it believed leaked a memo about Wal-Mart's health care plans. "It wasn't like a 007 operation or anything," Gabbard said. "More like 005. You know Wal-mart, always the lowest."

Ponemon said that most of the surveillance tactics allegedly approved by Wal-Mart appear to be legal, including the dispatch of a spy to an anti-Wal-Mart gathering, since the meeting was public.

"That's good to hear," said Clark. "But it doesn't really matter because if it wasn't legal we'd make it legal because, well, we're Wal-mart."

Clark said she could not comment on Gabbard's claim of blanket approval because "that's a pretty broad statement. We wouldn't be able to comment on that without knowing the details he's referring to. I mean, is he including the time we sicced the IRS on that union in New Jersey, or the time we got the government in China to arrest those labor organizers? See we just don't know what he knows."

Clark said the Threat Research group is no longer operating in the same manner that it did prior to the discovery of the unauthorized recording of telephone conversations. "It's been moved to an undisclosed location."

Even City Folk Deserve An Opportunity To Be Exploited

You know, you really have to feel for New Yorkers, or more specifically the folks in Manhattan. There was the first attempt on the Twin Towers in 1993, the second attack in 2001, and now a tragedy of even greater proportions, Wal-mart has decided not to build in Manhattan.

Wal-Mart, embattled by failed attempts to open stores in Queens and Staten Island, may be giving up on New York, or at the very least Manhattan. In an interview with The New York Times, Lee Scott, Wal-Mart chief executive and chairman, said that trying to conduct business in New York was so expensive that "I don't think we could increase our profit margins. I mean first of all you got people demanding a living wage and benefits they can actually use, and they got all these union things. Do you know what unions do to profit margins?"

Wal-Mart officials quickly clarified that Scott, who in the interview made repeated references to "New York," was referring to Manhattan, and not the entire city. "It's the illegal immigrants in Manhattan who lose," said one Wal-mart official. "It's just one more low wage no benefit opportunity they won't have."

We would like to be in other boroughs if we can find government officials that will pay us to come, because we know we could suck us some bucks off those communities," said Wal-mart spokesperson Kevin Thornton.

Stuart Applebaum, president of The Retail, Wholesale and Department Store Union said, "They are going to find that no matter where they are in New York City, the response is going to be the same. New Yorkers will not tolerate their way of operating."

"See, that's what I just don't get," responded Scott. "As long as you get your paper towels for 59 cents, what do you care that we paid the factory worker in China 3/5 of a cent? It's not like he's an American or anything. We pay Americans 5 bucks an hour. No overtime though. Don't want to give the store away."

Patricia Edwards, a portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle, which manages $9 billion in assets and holds about 42,845 Wal-Mart shares, noted that even if Wal-Mart writes off the New York area, she doesn't see it as a big financial blow. "They'll just suck a few extra bucks out of everyone else, no biggie."

Union-backed critics in New York and elsewhere have waged a fierce campaign against Wal-Mart, asserting that the retailer's wages and benefits are so egregiously low they drive down pay and benefits for many of its competitors and force employees to go on state-funded health care plans. "Well sure, it sounds bad when you say it like that," Scott said.

Wal-Mart entered Chicago last year, it's biggest city, but only after the city's mayor vetoed an ordinance requiring higher wages. "It's a good thing when government looks out for the people," Scott told reporters. "That's why we pay him."

Walmart: Wear A Dress, Get Paid Less

Whoa. Just when we turn our attention away from the boys of Mordor, they're back in the news. This time as the victims of activist judges who are all up in their grills about some equal pay for equal work jive. See that's what's wrong with America these days, judges who are always going on about law and stuff (Where's Tom DeLay when you need him? Oh, packing for jail. Never mind).

Well, anyway, back to Walmart. The largest sexual discrimination lawsuit in U.S. history moved forward against Wal-Mart when a federal appeals court approved class-action status for seven women who claim the retailer was biased in pay and promotions. "These charges are totally without merit," said a Walmart spokesperson. "Walmart is a southern company started by southern gentlemen. We treat ladies with great respect. We put them on pedestals, we honor their femininity."

When told that the lawsuit was about unequal pay and promotion rates the spokesperson responded, "Well, there is that, but I defy you to find a female employee who didn't get flowers and a nice card on her birthday."

"Plaintiff's expert opinions, factual evidence, statistical evidence and anecdotal evidence present significant proof of a corporate policy of discrimination and support plaintiff's contention that female employees nationwide were subjected to a common pattern and practice of discrimination," the court wrote in a 2-1 decision. "Guess we know how many people on that panel of judges are women," said a Walmart executive who asked not to be named.

Wal-Mart said it would ask the court to rehear the case with the same three-judge panel or with 15 judges, a move likely to idle the case for months. "You know how flighty women can be, especially around 'that time of the month,'" said the unnamed executive. "We're hoping they just forget they're suing us."

Bentonville, Arkansas-based Wal-Mart has argued it did not discriminate and that class-action status should be dismissed because the company grants its 3,400 U.S. stores a great deal of independence in their management. "Each local manager is free to chose whom to discriminate against and how," said Wal-Mart attorney Theodore Boutrous Jr.

Donald Gher, chief investment officer of Coldstream Capital Management, which owns Wal-Mart stock, said the decision was a setback for the retailer and would cheer the company's critics in the U.S. labor movement. "Are you ready to pay $1.29 for dish soap, because that's what's going to happen if women have to be paid the same as everyone else. The money to protect profits and keep dividends up will have to come out of somebody's pocket," he said.

"This is one step of what is going to be a long process," Wal-Mart attorney Theodore Boutrous Jr. said. "We are very optimistic of obtaining relief from this ruling." He said Wal-Mart's own review found no significant disparity in pay between men and women at 90 percent of its stores. "And by 'significant disparity' we mean that one group would be paid with money and the other with Cocoa Puffs."

Robin Conrad, a vice president with the U.S. Chamber of Commerce blasted the decision. If it stands, she said, it likely would force Wal-Mart to settle out of court than risk losing at trial. "It's especially hard to win trials when you're guilty as sin," she added.

Brad Seligman, one of the attorneys who represented the women suing Wal-Mart, said the decision would hurt the company's reputation. "But what the heck," Seligman added, "It's Walmart. As long as you can get chicken at 79 cents a pound, what do you care what they do to their employees?"

Ash Nazg Durbatulûk, Ash Nazg Gimbatul, Ash Nazg Thrakatulûk Agh Burzum-ishi Krimpatul.*

We're coming to you today from the "Where are they now" department here in the marbled halls of IM Central. You may remember a while back we visited the boys of Mordor to see what forward looking labor policies they had formulated. We found that lunch was a passe' concept. Well, it's been a while and we got to wondering what the mischievous merchants of mirth have been up to lately, so we dosed ourselves with holy water and cast our thoughts down Bentonville way (motto: Work Makes You Free).

Wal-Mart is set to shake up the lives of its 1.3 million workers with a staff scheduling system that is set to end predictable shift patterns. "Hey, if you work at Walmart what kind of life do you have?" said a spokesperson for the company. "If they're not here, most of our employees are home watching Jerry Springer reruns anyway."

The computerized system, called the “eviscerator”, is due to be implemented by the end of the year and allocates staff based on the number of customers in a store at any time. "Eventually we plan to have employees live in trailers out behind the store," said Lee Scott, Walmart president. "We scapped the idea of keeping them on leashes though."

The system alerts managers when a worker’s schedule is approaching full-time. This allows the company to scale back shifts to prevent part-time staff from winning permanent status and entitlement to higher wages and benefits. Scott confirmed that the software would keep the number of employees categorized as full time at a bare minimum. "How do you think we can offer such a good benefits package?' he asked. "Why, it's because no one qualifies for it, that's how."

The system is likely to demand increased flexibility from workers, leaving many “on call” and uncertain of what their next pay check would be. "You say that like it's a bad thing," a spokesperson who did not wish to be identified commented.

Wal-Mart said that the new system would cut lines and have a significant impact on customer satisfaction. A spokeswoman said that 70 per cent of customers reported better service under the system in one test last year. "Of course you have to understand that our customers don't expect much service anyway," the spokeswoman continued. "So the bar is set pretty low to begin with."

A spokesman said that Wal-Mart was not the first retailer to use the technology and added: “This goes on all the time in Bangladesh, Thailand, and other forward looking countries. We're just sorry repressive child labor laws in the United States are making us less competitive in the world market.”

* One Ring to rule them all, One Ring to find them,One Ring to bring them all and in the darkness bind them.