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Wal-Mart Scrambling To Keep Management Videos Private

So, another Wall Street Journal page one headache for Wal-Mart today.

Flagler Productions, who had been videotaping Wal-Mart executives meetings for 30 years under a handshake agreement, has now opened its troves to the public.

Candid Camera: Trove of Videos Vexes Wal-Mart [Wall Street Journal]:

For nearly 30 years, Wal-Mart Stores Inc. employed a video-production company here to capture footage of its top executives, sometimes in unguarded moments. Two years ago, the retailing giant stopped using the tiny company.

At first, the decision threw Flagler Productions Inc. into a panic. Now it’s Wal-Mart that’s squirming.

In recent months, Flagler has opened its trove of some 15,000 Wal-Mart tapes to the outside world, with an eye toward selling clips. The material is proving irresistible to everyone from business historians and documentary filmmakers to plaintiffs lawyers and union organizers.

Among the revealing moments: A former executive vice president and board member challenges store managers in 2004 to continue his work opposing unionization. Male managers in drag lead thousands of co-workers in the company’s corporate cheer. In another meeting, managers mock foolish or dangerous use of a product sold in its stores. In 1991, founder Sam Walton describes Hillary Clinton, then a Wal-Mart director, as “one of us.”

The best part, maintains plaintiffs lawyer Gene P. Graham Jr., is that “Wal-Mart has no control over this stuff.”

Wal-Mart isn’t pleased. “It’s difficult to understand how the company could now sell to third parties the material we paid it to produce on our behalf,” says a Wal-Mart spokeswoman. “Needless to say, we did not pay Flagler Productions to tape internal meetings with this aftermarket in mind.” She adds that the company is “reviewing our legal options.”

The production company’s founder and former owner, Mike Flagler, says he was hired on a handshake in the 1970s to help produce the events Wal-Mart holds each year for managers and shareholders, including entertainment portions of its annual meeting and important sales meetings. He filmed them as well.

He says he rebuffed Wal-Mart’s suggestions that he reuse the tapes to save money. Instead, he held onto recordings of commercials, executive speeches and manager hijinks.

Corporate records typically are closely controlled through legal contracts that restrict access and use. Mr. Flagler says he never signed a contract with Wal-Mart for the production or video work. Flagler Productions says that that arrangement left ownership and control of the films with it.

In a Jan. 14 letter to Flagler, Marshall S. Ney, a lawyer for Wal-Mart, said the retailer has “claims to rights in the video library” and the film transcripts. Mr. Ney didn’t return calls for comment, and Wal-Mart’s spokeswoman declined to elaborate.

Unvarnished Look

Unlike the polished presentations delivered at business forums, the videos provide an unvarnished look at Wal-Mart leaders as the corporation grew into one of the world’s largest, says Nelson Lichtenstein, a labor historian at the University of California at Santa Barbara who has viewed some of the tapes.

The video library might have remained under wraps if a new Wal-Mart executive hadn’t decided to hire another company to stage a musical production for its 2006 stockholders’ meeting. The decision sharply curbed Flagler’s role. Wal-Mart dumped Flagler altogether as a producer in late 2006, nine days after Mr. Flagler sold the company for an undisclosed sum to two employees, Mary Lyn Villanueva and Gregory A. Pierce.

The current owners say Wal-Mart accounted for more than 90% of Flagler’s revenue. The company’s bank called in a loan, and the pair dismissed their 16-person work force, Ms. Villanueva says.

Flagler offered to sell the whole video archive to Wal-Mart for several million dollars, Ms. Villanueva says, although she won’t disclose the exact price. Wal-Mart countered with an offer of $500,000, arguing the footage wouldn’t be of interest elsewhere, the two owners say.

They sold their 20,000-square-foot production facility and moved into an 800-square-foot rented office. They now hope to sustain the company by selling access to the Wal-Mart videos. They charge $250 an hour for video research, and additional fees for a DVD copy of film clips.

Plaintiffs attorney Diane M. Breneman stumbled across the videos while working on a lawsuit she filed in 2005, on behalf of a 12-year-old boy, against Wal-Mart and the manufacturer of a plastic gasoline can sold in its stores. Her client was injured when he poured gasoline from the container onto a pile of wet wood he had been trying to light, and the can exploded. The lawsuit alleges that the containers are unsafe because they don’t contain a device that prevents flames from jumping up the spout and exploding.

Wal-Mart’s lawyers have argued in court filings that the retailer couldn’t have known that the product “presented any reasonable foreseeable risk...in the normal and expected use.”

Ms. Breneman says that when she first laid eyes on the racks of tapes, “I thought, ‘How could anyone in the world allow this to exist?’” The videos, she says, deal with “everything anyone would want on Wal-Mart....They’ve got 30 years of people winging it.”

Parody Testimonials

Ms. Breneman says Flagler Productions located videos of product presentations to Wal-Mart managers in which executives gave parody testimonials about the same brand of gasoline can. In an apparent coincidence, one manager joked about setting fire to wet wood: “I torched it. Boom! Fired right up.” In a separate skit, an employee is seen driving a riding lawn mower into a display of empty gasoline cans. A Wal-Mart executive vice president observing the collision jokes: “A great gas can. It didn’t explode.” The tapes were made before the lawsuit was filed.

Ms. Breneman argues the footage provides evidence that the retailer could have foreseen the risk that customers would use the gas cans when starting fires. She says she plans to ask the Kansas City, Mo., federal court handling the case to allow the footage to be used as evidence. Wal-Mart’s lawyer on the case didn’t return calls seeking comment.

Flagler began getting calls from people all over the country—many of them lawyers—requesting videos on a variety of topics. “Once I know what it is they’re looking for, I can find it,” Ms. Villanueva says.

Washington lawyer Joseph M. Sellers is pursuing a gender-discrimination lawsuit seeking billions of dollars on behalf of past and present female Wal-Mart employees. Wal-Mart has denied discrimination and has appealed the class-action status of the case in San Francisco federal appellate court.

In reviewing the videos, Mr. Sellers’s colleague found clips of Mr. Walton, the founder, lamenting the lack of women executives, and of Wal-Mart Chief Executive Officer H. Lee Scott Jr. at a 1999 meeting discussing cases of sexual harassment. Mr. Sellers contends the videos bolster his argument that senior Wal-Mart executives knew about the lack of women managers and about incidents of sexual harassment, and failed to address the problems in a timely way.

Mr. Graham, the plaintiffs lawyer, learned of the archive last fall through Ms. Breneman and alerted other lawyers. One attorney says he spent $15,000 to secure copies of video clips on the chance they might be useful in future cases.

Flagler now is becoming a must stop for a variety of parties interested in Wal-Mart. Critics of the company have been looking there for clips that support their views. The United Food and Commercial Workers International Union and Service Employees International Union, for example, sent employees to research footage in connection with their campaigns to force Wal-Mart to change its business practices.

On March 31, the UFCW posted a video on YouTube that included clips from Flagler of Mr. Walton and other Wal-Mart executives telling employees they must always “do the right thing” and put integrity above convenience. The union was campaigning for Wal-Mart to drop its legal efforts to recoup monies paid for medical treatment of former employee Deborah Shank, who was seriously injured in an accident and had separately collected money for her injuries. Last week, Wal-Mart said it would drop its demand for repayment.

Sen. Clinton served on Wal-Mart’s board of directors from 1986 to 1992, when she was first lady of Arkansas. During her presidential campaign, she has faced some criticism over Wal-Mart’s labor record and the lack of women in upper management.

There is footage in the archive of Mrs. Clinton joining Mr. Walton, Wal-Mart’s founder, on a stage at the 1991 opening of a store in Rogers, Ark. “I’m so proud of this company and everything it represents,” Mrs. Clinton said. “It makes me feel real good about what we’ve been able to do.”

Mr. Walton responded: “You’re a great associate, Hillary.” Turning to the crowd, he added: “She’s one of us.”

‘Mixed Blessing’

Asked about the Flagler clip, a spokesman for her campaign cited remarks she made about Wal-Mart in a debate last year. When Sen. Clinton was asked whether Wal-Mart is “a good thing or a bad thing” for the nation, she described the retailer as “a mixed blessing.”

Mr. Lichtenstein, the labor historian, says the Flagler archives provide a unique window into the company. “When they are talking to themselves, and there aren’t shareholders present, you get a level of things being revealed,” he says.

Write to Gary McWilliams at

Posted by Eric Bull on Wednesday, April 09, 2008

Click Here for a Printer-Friendly Version

COMMENTS

“Mr. Graham, the plaintiffs lawyer, learned of the archive last fall through Ms. Breneman and alerted other lawyers.."WSJ-------------------------------------------------------------I read the entire WSJ article and could not find Mr. Graham’s first name. Can anyone else? Was’t Debbie Shank’s lawyer’s last name Graham? Seems like it was Maurice Graham-I’ll have to doublecheck that--even so,it could be a different Graham.--------------------------------------------------------------------------------------------------------------I’m so proud of this company and everything it represents,” Mrs. Clinton said. WSJ-----------------------------------Hillary said that the Waltons were the best America had to offer......oh.boy!

ddrb in
Wednesday, April 09 at 02:59 PM

ddrb,

Your silly-assed conspiracy theories aside…

...this is nothing but old video footage used at annual shareholders’ meetings.

As for the various antics mentioned, WM was well-known for stuff like this (before they appeared on your northern radar), back “in the day”. It was a part of their lore which endeared many investors to WM in the 70’s & 80’s.

Personally, I’m hoping we’ll see some of those Hillary clips.

bbrd in
Wednesday, April 09 at 03:17 PM

!5,000 tapes is more than just meetings

Lola in
Wednesday, April 09 at 03:56 PM

bbrd,

If the Flagler company was being paid to take these videos (CNBC said it was $10 million a year), wouldn’t that make those videos the property of Wal-Mart? If not, what was Wal-Mart paying for? Asking Wal-Mart to pay AGAIN, for something they already paid for sounds illegal!! And, if these videos were taken without Wal-Mart’s permission and the meetings were not public, doesn’t that make threatening Wal-Mart to either buy them or they will be sold to someone else, sound quite a bit like BLACKMAIL or EXTORTION?

I think Wal-Mart’s lawyers could have a field day with this!! As for the Flagler company being dismissed, if there was no actual contract, but a handshake, Wal-Mart could not have broken the contract, unless it was a ‘forever’ contract, and that doesn’t sound very realistic!! What the Flagler company is doing sounds very unethical and might cost them dearly in the end!!

RDS in
Wednesday, April 09 at 04:28 PM

There are only 2 obvious comments here.

1. Walmart… VERY stupid for not having written contract with this company. I don’t care if it started in the 70’s with a “handshake” or not. Just very dumb on their part.

2. The individual in the WSJ story who is suing Walmart because “they should have known that individuals would be using these cans” to light wet-wood fires so it is THEIR fault that SOME IGNORANT IDIOT DID SOMETHING STUPID LIKE HOLD A GAS CAN TO A FIRE.... Are you kidding me? I would put this person up on a pedestal to show every parent out there “this is not how stupid I want you to grow up to be”

mary in
Wednesday, April 09 at 05:01 PM

“I think Wal-Mart’s lawyers could have a field day with this!!”

RDS.... Whoa! Hang on there drama boy!

Wal-Mart has been doing goofy stuff in the public for years! If someone at Bentonville wants to start a lawsuit over this, all the defendents need to do is mention the precedent that Sam Walton set when he danced on Wall Street in a grass hula skirt!

Watching Wal-Mart in Minnesota
Wednesday, April 09 at 05:21 PM

As any lawyer will tell you, “Oral contracts are not worth the paper they’re printed on”. Wal-Mart treated professional photographers like shipping dock clerks, never getting an agreement about tape ownership, then firing them at will. That was just plain stupid.

And if any of that upper management had an outside life, they would have remembered: “You never double-cross anyone who has a candid picture of you”.

Wal-Mart’s super management team should troop into the Men’s Room (no women in upper management) and look at the mirror, and say “This is all your fault”.

Jay in DC in Washington, DC
Wednesday, April 09 at 07:30 PM

Watching Wal-Mart,

“Wal-Mart has been doing goofy stuff in the public for years!”

I think the key word here is PUBLIC, these meeting are not open to the public!!

Think about it, if you hire me to take some videos for you, who do those videos belong to? I don’t think it’s a matter of if there was a contract or not, if you pay me for something, and I accept the money, I must deliver what you paid me for!! I can’t come back later and try to sell it to you again or threaten to sell it to someone else!!

Example: Say you hire me to take videos of your wedding to make a ‘Keepsake’ video for you, who does the video material belong to, you or me? During the shooting of the wedding, your uncle got drunk and fell into the wedding cake, could I come back later and ask your uncle to pay me for the video or I’d sell it to his boss? I think that’s called “Blackmail” and that’s illegal!!

RDS in
Wednesday, April 09 at 09:37 PM

It is common practice that the photographer owns the rights to his work. Ask Olan Mills for your next portrait negatives. You won’t get them at any price. Even Wal-Mart will not copy any photo that has the studio name embossed on it. So how can Wal-Mart claim ownership of this photographer’s work?? All professional photographers own the negatives/tapes/digital data. Flagler is right; Wal-Mart is wrong.

Wal-Mart is not a very professional organization. I have known only ONE Wal-Mart store manager who was first class and professional. He opened the largest store in VA in the 1990’s. Needless to say, he was trained in retail store management in another retail culture, far different than Wal-Mart. That’s the reason he was first class. His store was first class (as much as Wal-Mart can be). When he was promoted and left, the store went to pot--dirty, filthy parking lot, low employee moral, long check out lines, carts accumulating in the parking lot--typical Wal-Mart mentality. Wal-Mart will never win the monthly “Most Beautiful Business” award in my community.

Wal-Mart has a history of crossing its vendors. Look how many small businesses they used in the south, so proudly claiming to use American suppliers. Then they would drop those vendors like a hot potato to save a few pennies from foreign suppliers. (Remember their Made-in-the USA ad campaign?) Wal-Mart talks with a forked tongue. How many small suppliers did Wal-Mart put out of business when made-in-USA no longer added to their profits? How much junk do you see in a Wal-Mart store?

Flagler’s mistake was depending on one primary client for his bread and butter. He should not have depended on Wal-Mart for more than 50 per cent of his receipts. Free enterprise prevails; Flagler is free to do what he wants with his works. I wish Flagler Productions much success in this new turn.

It’s time for Wal-Mart to tow the line. They need to care for all employees and stop stomping on small businesses. Diversity is a good thing.

W E W in VA
Wednesday, April 09 at 10:45 PM

That gasoline can lawsuit is absolutely ridiculous. Since the parody was before the lawsuit it is doubtful that the managers that were making jokes about gas cans exploding even knew about the incident. Anyone with a brain knows that if you pour gasoline on a fire there is a chance that it could go boom.

Dave in
Thursday, April 10 at 07:02 AM

Save your breath W E W in VA. Of course you’re right. Any photographer knows that.

But on this blog… RDS is right. Everyone else is wrong, especially when it comes to Wal-Mart.

Notice how he says, “I think...” “I don’t think...” “ I think...?”

Who ccan argue with anyone who “thinks” as much as RDS does?

You really lost me when you said, “Say you hire me to take videos of your wedding...”

That’s a downright scary thought!

Wal-Mart Watcher in Minnesota
Thursday, April 10 at 07:57 AM

“The best part, maintains plaintiffs lawyer Gene P. Graham Jr., is that “Wal-Mart has no control over this stuff.""-WakeUpWalMart----ENTIRE WSJ article link-------not the abbreviated version provided on this thread.

ddrb in
Thursday, April 10 at 10:32 AM

“ I don’t think it’s a matter of if there was a contract or not, if you pay me for something, and I accept the money, I must deliver what you paid me for!! “ RDS------------------------------It is my understanding ,that in some states an oral agreement constitues a binding contract.I cannot fathom why anyone would do business with WalMart without the legal protection of a contract-And equally unfathomable why WalMart did so all these years unless there was a reason to THEIR advantage do so.There’s ALWAYS a contract-just consider if vendors didn’t have contracts-(I think there was a story here a while back about a vendor not having a contract on jackets,and got left holdiing the bag,er, jackets I mean.)

ddrb in
Thursday, April 10 at 10:41 AM

WEW: So you are saying that the work product is equivalent to trademarked material,or copyrighted material? Interesting. Very interesting.

ddrb in
Thursday, April 10 at 10:45 AM

W E W,

“It is common practice that the photographer owns the rights to his work.”

Can you explain to us, why you see faces blurred on many pictures shown to the public, that’s because a photographer has to get a ‘release’ signed, to exibit the likeness of the people in the material!! Can Olan Mills, sell the pictures they have negatives of, to just ANYBODY? They may have the videos, but don’t have a ‘release’ to sell the ‘faces’, those belong to the owners of the faces!!

RDS in
Thursday, April 10 at 11:17 AM

RDS maybe those guys dressed in drag didn’t want to be on film , DO THEY NOW have a lawsuit ? Why were they in drag anyway, to mock women ,THAT IS THE ONLY REASON.

JOE in
Friday, April 11 at 04:06 AM

“Why were they in drag anyway, to mock women ,THAT IS THE ONLY REASON. “

Umm no. The main reason is to make fools of themselves as a pep rally type move. While I admit that this is a very immature way of going about thing, a little to high schoolish for me not unlike the stupid cheer that they were doing, it is hardly sexist or demeaning to women.

Dave in
Friday, April 11 at 06:54 AM

JOE: What do you think the reaction would be IF A LOT OF FEMALE MANAGERS GOT DRESSED UP AS MEN? Oh,wait----there aren’t too many women managers,are there?

ddrb in
Friday, April 11 at 08:42 AM

Joe;

[Why were they in drag anyway, to mock women ,THAT IS THE ONLY REASON.]

Why did soldiers dress like women in WWII to entertain other soldiers? Why do men like ‘Flip Wilson’ dress like a woman? How about Milton Berle, Dustin Hoffman, Tyler Perry, John Travolta, Eddy Murphy and Martin Lawrence have dressed like women, it’s called acting out a scene.

ddrb;

Women dress like men, ALL the time. How come men don’t sue them for, ‘mocking’ men?

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whole life insurance in whole life insurance
Friday, April 11 at 06:27 PM

Common sense is dead. We have allowed the current generation to raise us! Nothing but I group of whinning gimme pigs! Obviously there was an ignition source when the individual pulled out the gas can to ignite “Wet Wood”. But we have taken that responsibility away from that particular individual! This what I do know. Yes, we have meetings. I don’t see any of the newest one brought into question. As always, Wal-Mart learns from it’s mistakes and we are very open about it. I am a member of the management team and a female. Nobody has tried to touch me. I know that I didn’t have a college education when I became part of the leadership team. Common sense and leadership abilities are what I brough to the table. I am a single mother who gets NO support from a man. I will be debt free within a year. College education for my children. Semi-retired by the time I’m 55. The only reason I won’t quit is because of the outstanding medical benefits. WHAT OTHER COMPANY IN THE WORLD DO YOU KNOW CAN PUT YOU IN THAT POSITION? I can’t tell you of any and I have had many jobs with NO chance for advancement! You pick on Wal-Mart because of profitability. Let’s get down to the real truth!

gimme a W in somewhere in the US
Friday, April 11 at 07:13 PM

gimme How many associates in your store are on food stamps/welfare /2-3 jobs/ ? How many do you screw over daily cutting hrs etc so you can have a bonus? I believe you are just another wm shill.

Lola in
Saturday, April 12 at 11:01 AM

Lola, I almost walked away from the debate for the simple fact that you use your intelligence to insult people. But, I will cut you some slack on that. I don’t send associates home and cut hours. We are the highest paying position in several counties. I am a satisfied customer! :) I’m not on walfare because of Wal-Mart! :) But you never hear about that and there are alot of us ! I’m not sure where this organization gets it’s information from. I’m not even saying that some of it isn’t true. There are bad people out there that make bad choices. Unfortunately because they wear a Wal-Mart Badge or they bought it at Wal-Mart, seems to me there’s alot of money to be had. At least that is what the lawyers are saying. Dear Lola, take a look around the world you live in and not just Wal-Mart. We have become a completely antiseptic, politically correct society that insurance companies and lawyers love to feed on. Now that is offensive! Who is suing them!?!

gimme a W in somewhere in the US
Saturday, April 12 at 05:30 PM

“you use your intelligence to insult people. “ gimme_____________________________________________"Nothing but I group of whinning gimme pigs!"________________________________________________gimme Hey,gimme,why don’t you gimme,and others here, a break from your obvious P.R. spin of WalMart’s allegedley spectacular healthcare? Management you say? Is that the reserved platinum plan policy for the ‘elite’ of the gimme bunch?

ddrb in
Monday, April 14 at 08:50 AM

ddrb,

“WalMart’s allegedley spectacular healthcare”

You mean the one that paid out $470,000.00 in medical bills for Mrs. Shanks?

RDS in
Tuesday, April 15 at 12:18 AM

RDS: You mean the one who wanted it back?

ddrb in
Tuesday, April 15 at 10:29 AM

ddrb,

Point is, if the insurance is as terrible as you claim, they wouldn’t have paid out that much in the first place!! And, I’m not going to try to explain ‘subrogation’ to you, because if you don’t understand it by now, you never will!! Some people only like the laws that favor their view of things, guess you are one of them!!

RDS in
Wednesday, April 16 at 12:07 AM

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