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The Wal-Mart Weekly: Violating federal election laws?

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Welcome to the 73rd installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

This week, I'll be taking a look at whether Wal-Mart Stores Inc.'s (NYSE: WMT) earlier decision to bring its store managers together and tell them about the possible repercussions of a Democratic president violated federal election laws. Since presumptive Democratic Presidential candidate Barack Obama has now chosen veteran politician Joe Biden as his running mate, is Wal-Mart chewing its corporate fingernails off?

The Democratic National Convention begins today, so it will be interesting to see what comes out of it. Did Wal-Mart violate federal campaign election laws by having an "education session" with the leaders (and in turn, employees) of its national store locations? Let's see what national labor unions think. Read on.


It's not a cut-n-dry issue

For those that live in the "it's a free country" mode most of the time, there may be nothing wrong with the largest and most powerful force in retailing to invite store managers from thousands of nationwide locations to a series of meetings where politics is the main topic. Those managers then take the sentiment back to their stores. So what? The balance of power in the federal government affects just about everything most Americans deal with every day: working conditions, taxes, gas prices, food prices, you name it.

But there may have been a crossed line here: unions are saying that the total effect of those meetings were to inform managers of potential changes making it easier to unionize companies should a Democrat be elected in November. In other words, if Barack Obama wins the election in November, Wal-Mart and other companies could see legislation to allow unions into retailers, and that would mean higher prices for consumers. That's the gist Wal-Mart is pushing according to the unions, anyway.

Did Wal-Mart make "prohibited corporate expenditures" in its efforts to inform must of its U.S. operation about the potential problems of electing a Democrat as President? That's the accusation by unions that say the "Employee Free Choice Act" could be passed into law should it come to the desk of a Democratic President. The interpretation of those meeting and the substance talked about therein translates into advocating for the defeat of Barack Obama, say the unions.

In what seems like every court case ever tried, the specific meaning of those meetings can't be 100% interpreted as any old layman wants. Still, it's hard to imagine that Wal-Mart was planning on addressing the Presidential elections four years from now. There's only one election that the retailer could possibly be referencing -- and that election will pit Barack Obama against John McCain.

Interpretation of the law

Under federal election laws, companies can't express desire to see any certain candidate elected or defeated. The operative words there are "candidate." When Wal-Mart warns against changes that could be in store for it should a Democratic candidate be elected, it's not even talking about Obama. But, is there an implication there? That's what the union attorneys will have to establish.

But the unions won't come to the courtroom empty-handed. Expected are 60,000 signatures that will be requesting an official investigation. WakeUpWalMart.com, the AFL-CIO and the worker advocacy group American Rights to Work will be filing the complaint.

Wal-Mart spokesperson David Tovar said that anyone representing the company that told its associated how to vote in this November's Presidential election were "wrong and acting without approval." Fair enough, I suppose. Can Wal-Mart be held liable for every employee under its umbrella who makes a statement that's not consistent with corporate policy? Sure. How about anybody that gives up an "opinion" on the recent meetings that were really talking about a plan to defeat Obama in a little over two months? Not so much.

Legal expert Joseph M. Birkenstock says that the case will be determined on "exactly what was said" at meetings. He's right. If Wal-Mart talks about the potential repercussions of electing a Democratic President, no harm done. If the company mentions unionization and Obama (even his name), then the complaint will have serious legal teeth. If there is documentation, video or a transcript of even one meeting where incriminating evidence is found, Wal-Mart could have serious issues with its defense.

An example that needs to be proved

In a Southern state, a meeting was apparently held that discussed these areas: minimum wage reductions for up to three months following unionization, union authorization cards that would violate workers' right to privacy, and a small sample being unionized that would lead to storewide unionization.

Critics contend that these three points are a mischaracterization of the Employee Free Choice Act, and that Wal-Mart was intentionally misleading meeting attendees about the provisions of this piece of legislation that could show its head quickly under a new Democratic President. Wal-Mart responded by saying that those three areas don't reflect Wal-Mart's understanding of the law and weren't included in its training. So, was the meeting leader who brought up those three examples taped, videoed or recorded in some way? Or, is this a case of "my word against your word?" You deice that one -- that is, unless the facts come out.

Stay tuned right here this time next week for another edition of The Wal-Mart Weekly. Until then, have a great week!

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Last updated: November 14, 2009: 09:26 PM

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