Sam’s Club Job Cuts, Severance Agreements, and “Flights”

Wal-Mart recently revealed that they are cutting nearly 2,800 Sam’s Club managers as part of a “restructuring” that will replace them with 1,800 salaried positions.  With these cuts there comes a severance agreement. 

Rumors about these cuts have appeared for some time on Wal-Mart Associate boards and blogs, most notably Wal-Mart Blows. These cuts were rumored as part of what Wal-Mart Associate’s often refer to as “flights” - anti-employee policies implemented gradually or company-wide.  The most notable of the flights is centralized computer scheduling (referred to as “just-in-time” scheduling by Wal-Mart’s home office) and pay caps.  Many of these “flights” also implement elements of the Chambers memo (PDF). The entire point of implementing these policies is to push long-term employees out for a younger, part-time workforce.

If the Associate boards are to be believed - and they have been exceedingly accurate at predicting what anti-employee policy Wal-Mart will implement next - the Sam’s Club department managers may be the first to go, but they will not be the last. 

The agreement that ex-Sam’s Club employees must sign in order to obtain severance pay raises several issues.  One section of the agreement releases Wal-Mart from any claim based on age, gender, race, disability and a number of other federal and state laws pertaining to discrimination.  This is problematic in light of the Dukes class action case involving gender discrimination, and also because of the clear intent of the Chambers memo to eliminate older employees and employees with health concerns.  Wal-Mart may be using these severance agreements as a way to continue its discriminatory policies and potentially block any future employee efforts to receive just compensation. 

Posted by Research Team on Thursday, April 26, 2007

COMMENTS

This figures.  knew for a long time that was coming; walmart stores are next

carol in in
Thursday, April 26 at 03:56 PM

I can’t believe you are making such a big deal out of what is a standard severance agreement. All companies make you sign a form releasing them from any and all liabilities. Of course, they never MAKE anyone sign these forms and they can’t force you. What they CAN say is “Look, we have to let you go. You are not entitled to severance but if you look over and sign this agreement, which you can show to your attorney, we are prepared to offer you X”. In return for a terminated employee signing a blanket release from liability, he or she receives the agreed upon severance.

Not one Sam’s employee is required to sign a release. If they feel they have such a strong case, they should have no trouble finding a slezebag lawyer to file a deep pockets suit against Wal-Mart.

I say once again, for the mentally challenged on this board (you know who you are!) NO EMPLOYEE IS REQUIRED TO SIGN A SEVERANCE AGREEMENT ANYWHERE!!!! An employee CAN agree to sign the severance agreement if they are given some sort of compensation. This is standard operating procedure in the HR field.

Nick in
Thursday, April 26 at 05:22 PM

Carol,,,,slight correction,,,,,they started hitting walmart managers last year..... i was one of them....the severance agreements are garbage..

Nick,,,, your a moron

Have a nice day:)

x walmart manager in USA
Thursday, April 26 at 06:32 PM

x walmart mgr

so sorry to hear that, hope all has turned out well for you nonetheless

carol in
Thursday, April 26 at 07:02 PM

x walmart manager

Given your rather idiotic response to a very clear and concise point regarding the severance agreements, it is not difficult to see why you are an “Ex-Manager”. You were supposed to lead, mentor and set an example for employees and customers with an intellect like that?

Is the severance “garbage” because it is somehow illegal or is it “garbage” because you disagree with it? Are you angry that you signed away any possibility of a lawsuit for some light compensation? I can understand your frustration at getting fired. However, with 1.4 million US employees and 8 to 10 applicants for every job, Wal-Mart can afford to get rid of people. I don’t know about the circumstances surronding your departure but, given your tone when confronted with a simple and direct explanation, I don’t really have to guess why you and Wal-Mart parted company.

Nick in
Thursday, April 26 at 09:39 PM

Mr. X was most likely a person who did not feel he was
born to make the Waltons rich at the expense of deserving
American employees.  How do they pay you for these posts
Nick?  By the line or..............?

Disgruntled is what you must see in the mirror.  Turn off your computer and watch Bill O’Reilly and get your news/opinions.

Phil in WA in
Thursday, April 26 at 10:27 PM

These cuts were rumored as part of what Wal-Mart Associate’s often refer to as “flights” - anti-employee policies implemented gradually or company-wide.

Actually, I believe “flights” was Bentonville’s name for their policy restructuring. The term came to have such negative connotations they were renamed “customer initiatives”.

You still get fired.

P,S. It didn’t take you guys (Carol, Phil, x) long to peg Nick.  :o)

Ken V in Texas
Friday, April 27 at 02:39 AM

I’ve never had to or been offered to sign any sort of agreement upon leaving a job, so I don’t see how this process can be considered a standard procedure of ALL companies; so far, it’s 0/4 with me.

The conversion of positions from hourly to salaried sounds a lot like what Home Depot did a couple of years ago. In Home Depot’s case, they converted most of their positions to salaried in order to circumvent overtime pay. I guess Nardelli had to justify his $112M yearly salary+benefits somehow.

Jason in
Friday, April 27 at 03:15 AM

Jason,

What Nick speaks is true.

One of my family members, who worked in marketing for a locally-based company (who has operations around the world) for many years, was recently offered a “buyout package”. 

And with that package came a severance agreement that needed to be signed, first before any monies were to be disbursed.

Bottom line - this employee was initially offered compensation by their company as part of their job being cut, an agreement was signed, and the employee received a check per the terms of the agreement.

JB

Jim Bunch in
Friday, April 27 at 08:41 AM

Jason

Severance agreements are not SOP at fast food joints and such, but they are a very real part of the professional world. Because everyone has a lawyer on speed dial, HR people recommend getting a severance agreement to protect your company from all issues, real and/or imagined.

You have to protect yourself in a nation that gives $500,000 to stupid people who burn themselves from holding coffee between their legs.

Nick in
Friday, April 27 at 08:57 AM

Jim,

All that I can say is that, based on my employment experience and that of my friends, I have never heard of a ‘no-sue’ agreement before. I was terminated from my last job as a hardware design engineer at a company that sounds similar to the one that you described, and the only thing that I was told by HR was the reason for my termination (downsizing) and verbally reminded that I couldn’t divulge proprietary information about company designs. I was then given a pathetic severence pay ($300 for three years employment) and shown the door. I did find it humorous that they actually challenged mine and the other ‘victims’ unemployment claims with the state though (cheap bas***ds!) I voluntarily left the other three jobs that I had, which dealt with HVAC or electronic equipment repair.

To date, I have held five jobs (present job included): three through high school/college and two in the ‘real world’, and none of them dealt with fast food or retail. To date, I have a BSEE degree with a minor in mathematics.

Jason in
Friday, April 27 at 10:35 AM

Jason,

Based on what you said, I guess the severance package largely depends-upon the employer. 

While I won’t repeat particulars, I can say that this family member I mentioned (who also did not work fast food or retail, obviously) was well-compensated to the point where they won’t need to worry about returning to work, for a little while.

The parts about divulgence of company information/trade secrets/"no sue” seems to be standard procedure (something WM needs to learn from, as they seem to have a problem all these former members of the HQ staff running their mouths to the dozen or so “watchdog groups” after they leave the company).

Hope your life beyond your former employer goes much better…

JB

Jim Bunch in
Friday, April 27 at 10:56 AM

Jason,

“The conversion of positions from hourly to salaried sounds a lot like what Home Depot did a couple of years ago. In Home Depot’s case, they converted most of their positions to salaried in order to circumvent overtime pay.”

A number of years back, a company I worked for did this exact same thing, by putting everybody who worked in the front office area on salary (I was a shipping clerk).  I was told by a friend that that was against labor laws (people on salary must have control of other people working under them), I contacted the Labor Department (wage and hour div.) and they got on it and we ended up getting put back on hourly pay and recieved a large backpay check for the overtime not paid!!  Home Depot employees should contact the Dept. of Labor about this!!

Bob in
Friday, April 27 at 11:51 AM

“To date, I have a BSEE degree with a minor in mathematics.”
Jason in
Friday, April 27 at 11:35 AM

Jason-
Nick and Jim have a job waiting for you at WalMart. You must prepare for $7.00/hr and 28hr/wk and put your teeth into the anti-union programming trash that you must sit through. Forget about health care benefits and any notion of getting paid enough to meet your basic living expenses. That would be unconscionable and outrageous payroll expenses and WalMart resents having to pay anything for American labor in the ever growing service economy as your engineering jobs are farmed out overseas.

Don’t worry, soon you will be contacted by a job search firm wanting you to pay them to get you a job at WalMart. Corporatism without any responsibility to the American people/family/taxpayer etc.

WalMart- What do you mean by corporate responsibility? We don’t understand.

SanDiegoView in
Friday, April 27 at 04:09 PM

SDV

Do you mean that Wal-Mart doesn’t offer health benefits? By “corporate responsibility” what exactly do you mean? Do you believe that a corporation has an obligation to pay more for something than it is worth? Let’s say you hire a local kid to cut your grass. You pay him $20 per job. He is very satisfied with that, as nobody else will give him a job at present and he has never earned more than $15 cutting comparable lawns in the past. BUT, one of your neighbors walks across the street and says “Why are you paying that kid $20? You are taking advantage of him and ripping him off! He needs at least $100 per week to pay for his car payment and insurance! You are not paying him enough to meet his needs! If he buys an even MORE expensive car, you should pay him MORE. The work he does and the contribution he makes is not what’s important. What IS important is that you pay him enough to meet HIS needs”.

I don’t know about you but I would probably run this neighbor over with a mower...................

Nick in
Friday, April 27 at 07:40 PM

SDV,

Now that you had to go and mention my name in an attempt to get my attention, over the weekend, I’ll give it to you straight…

I have no job waiting for Jason (or anyone, for that matter) at Wal-Mart (or elsewhere), because for the umpteenth time, I am not employed/otherwise affiliated with WM.  I am just a guy who shops there, and think jackasses like yourself give WM a raw deal.

I can promise if you ever did learn who my employer REALLY is, it would absolutely, positively shock the living hell out of you!  You would never guess in a million years, anyway, because it doesn’t fit your feeble ideas of what I am all-about (as KenV once said, any of us here could be “anyone”, even an old, fat lady).  Enough said.

You like to pound your chest and crow about low-wage, no-benefit jobs, check-out this guy, then explain to all of us the difference between his employer and WM (from his financial standpoint):

http://target-sucks.blogspot.com/2007/04/stupid-computer.html

Have a nice weekend.

JB

Jim Bunch in
Friday, April 27 at 09:24 PM

Jim,
[JB] “While I won’t repeat particulars, I can say that this family member I mentioned (who also did not work fast food or retail, obviously) was well-compensated to the point where they won’t need to worry about returning to work, for a little while.”

It sounds like that company had at least a little compassion left in them :) Hopefully, everything worked out ok for your family member.

[JB] “The parts about divulgence of company information/trade secrets/"no sue” seems to be standard procedure (something WM needs to learn from...”

WM does has a lot of negative PR fires, justifiable or not, to put out. One thing for sure though, they do have the uncanny ability to tick off the wrong people :)

[JB] “Hope your life beyond your former employer goes much better…”

Thanks. Good luck to you too.

Bob,
[Bob] “A number of years back, a company I worked for did this exact same thing, by putting everybody who worked in the front office area on salary...”

I never did follow up on the final outcome (if any) of the HD issue. The article that I read was from a link on Moneycentral, and they seem to post newslinks from credible sources (Reuters, AP, WSJ...)

SDV,
“Nick and Jim have a job waiting for you at WalMart. You must prepare for $7.00/hr and 28hr/wk...”

Although we may agree on certain topics posted on this blog, please leave me out of any ‘pissing matches.’ I’ll probably enrage enough people without any assistance :)

Jason in
Friday, April 27 at 09:47 PM

“buyout package”

Interesting idea. Is that anything like paying someone not to write?

Ken V in Texas
Saturday, April 28 at 07:56 PM

Ken,

Call it what you will, but in some cases, buyout packages have the potential to be a win-win for both employer and employee.

I’m pretty sure you already know this (and just wanted to get your usual 2-cents in, because “you can").  But for the rest of you who have never been exposed to a buyout package…

Employer - by paying the former employee a set amount of money/benefits, the employer has some assurances that they won’t receive any negative backlash from the employeee, once they depart the company.  Also, in Jason’s case, if there are any proprietary secrets (if employee should break the agreement, then the employer has grounds for legal action).

Employee - in some cases, depending-upon the amount of the payout/time period for continued benfits (i.e., COBRA), the employee doesn’t have to sweat-out finding a job, right-away.  Unfortunately, that wasn’t the case for Jason, based on the information he shared with us, here.

In any case, employers (usually HR) DO encourage the departing employee to have the employee’s attorney review the severance/buyout package prior to execution.

While none of this applies to the average Joe/Jane, here (as the subject matter is more or less about part-time, hourly work in retail), it’s still good-to-know info for life, down the road.

JB

Jim Bunch in
Sunday, April 29 at 01:18 PM

Like I said, paying someone not to work for you anymore.

Ken V in Texas
Sunday, April 29 at 02:12 PM

Most Companies that offer you a buy out,you have to take it or be fired. I live in a large Metro City that is the way it is here take or lose it. I have never heard that any of our friends had to sign any thing like that

If I work for Sam’s no way would I singed would just wait and get in on the next suit.The one Store here is a training for Ass.Managers the 12 were from Wally World when they complete the 17 weeks training they will be sent out to replace other Ass.Managers that were fired are quit there new salary will be around 28-32,000 Salaried about 60 hours
more during busy Holidays a good jump for them most were making 8.00-10.00 per hour none of them were over thirty

Another thing that has been mention many times is about the turn out for Applications for Wal-Mart . The last Store that open here about 3,000 application we could only find 200 that we could hire to pass the drug test,or not have a prison record Wally World is getting harder on this,before not much was said that is something Wally Worls forgets to put in there press release,

.beenthere in
Sunday, April 29 at 11:02 PM

Commenting is not available in this content entry.

Comment Policy

WalmartWatch.com reserves the right, in its sole discretion, to remove or refuse to post blog comments.