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Wal-Mart Faces Labor-related Legal Setbacks in Two States

BENTONVILLE, Ark. -- Wal-Mart Stores lost on several labor-related fronts yesterday as lawmakers in Maryland and a judge in Pennsylvania demanded more from the world's largest retailer.

In perhaps the most notable ruling, the Democratic-led Maryland Senate overrode Gov. Robert L. Erhlich Jr.'s veto of the so-called "Wal-Mart Bill" by 30-17, effectively requiring Wal-Mart to spend more on employee health care. Legislatures in more than 30 states could adapt the measure, according to published reports.

The bill, which was expected to be approved by the Democratic-led House yesterday evening, would require private companies with more than 10,000 employees in Maryland to spend at least 8 percent of payroll on employee health benefits or make a contribution to the state's insurance program for the poor.

The bill was criticized by Republicans on the Senate floor, who feared the ramifications of the bill for smaller companies in the future.

Sen. Paul Pinsky (D-Prince George's) argued that the bill would "take people who should be getting health care at the workplace off the rolls."

In a separate Wal-Mart-related issue, a judge in Pennsylvania yesterday approved a class action against Wal-Mart Stores, Inc. by employees in that state who claim that Wal-Mart pressured them to work off the clock.

The class could include nearly 150,000 current or former employees who worked at a Wal-Mart or Sam's Club in the state since March 19, 1998.

Wal-Mart said in a statement that it "strongly denies the allegations in this lawsuit. Wal-Mart's policy is to pay associates for every minute they work."

In other Wal-Mart news, the retailer has established "objective diversity initiatives as a performance measure" under its management incentive plan for fiscal 2007, according to a filing with the Securities and Exchange Commission.

Wal-Mart said it has set diversity goals to motivate officers to achieve its diversity initiatives. Executives who participate in the plan but fail to achieve the targets could find their incentive payments reduced by up to 15 percent.

Wal-Mart is currently facing an $11 billion gender-discrimination lawsuit that was certified for class action status by a federal district court in 2004. That certification is currently under appeal.
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