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So much for corporate responsibility at Wal-Mart!
By Lauren | March 29, 2008
You really have to wonder what evil genius at Wal-Mart was responsible for suing the company’s former employee, Debbie Shanks, to recover health insurance benefits paid to her as the result of a traffic accident that left her brain-damaged, confined to a wheelchair and living in a nursing home. Ms. Shanks and her family sued the trucking company involved in the accident and won about $750,000, which was reduced to roughly $417,000 after the attorney’s fees were paid. (As a lawyer, I personally have to wonder why Ms. Shanks’ legal team thought it was entitled to almost half of the damages awarded to that poor woman, but I digress…) The money was placed in trust to pay for Ms. Shanks’ long-term care. $417,000 may sound like a hefty chunk of change, but Ms. Shanks was only about 44 years old when the accident occurred. If she lives to be 70 – and she may well live longer – she’ll need more than thirty-five years of nursing home care. Divide thirty-five into $417,000, and all of a sudden Ms. Shanks’ recovery starts looking very modest indeed. Even now there’s only about $277,000 left in the trust, not much for a 52-year-old woman to fall back on.
And there may be nothing at all in the trust pretty soon. The fine print in Wal-Mart’s health plan reserves the right for the company to recoup medical expense payments it makes if an employee collects damages in a lawsuit. Wal-Mart’s plan paid Ms. Shanks about $470,000 after the accident, and Wal-Mart wants the money back right now. The trial court ruled that Wal-Mart was entitled to the money by law, but that it could only take what’s left in the trust. At least Wal-Mart can’t demand that Ms. Shanks’ family come up with the balance; thank Heaven for small blessings, right?
The Shanks, who aren’t exactly well-to-do, appealed; what choice did they have? Wal-Mart was apparently prepared to fight all the way to the Supreme Court to get its money, but it won’t have to. The Court declined to hear the case, leaving Ms. Shanks and her family to pay the last pennies in her trust to a $90 billion dollar company.
Tempted as I am to razz the Court for sidestepping Ms. Shanks’ appeal, the Court’s inaction doesn’t matter much because the result of an appeal would probably have been the same. Wal-Mart is entitled by contract to take Ms. Shanks’ money, and the corporate giant seems determined to do so, no matter what it does to the Shanks family. Wal-Mart’s spokesman, John Simley, claims that the suit was brought out of “fairness” to the other Wal-Mart associates who contribute to the health insurance plan. (Did Wal-Mart even ask its other employees before suing Ms. Shanks? I bet every last one of them would have been willing to give up a couple of dollars to let her keep her trust fund.) Simley did, however, take a moment to call Debbie Shanks’ case “unbelievably sad.” Here’s hoping that the crocodile tears don’t stain his nice suit.
Wal-Mart probably spends far more than $200,000 every year on free ice cream, fun runs, Earth Day events and other nifty little community giveaways to persuade its potential customers that it’s a good corporate citizen. Who does Wal-Mart think it’s kidding? Consumers have long memories (just ask Exxon), and everyone I know who’s heard this story is absolutely outraged and determined never to shop at Wal-Mart again. It would have been far less expensive in the long run for Wal-Mart to take its victory in court but leave Debbie Shanks’ money in the trust. As it is, Wal-Mart may lose a lot more money from angry former customers than it can possibly get from Debbie Shanks. One thing is certain: Wal-Mart will never again get a dime from me.
Topics: Business Ethics, corporate responsibility |
March 30th, 2008 at 2:17 am
Thanks for sharing this story. Although something may be “legal” it does not follow that it is the ethical or moral thing to do. I will never understand why an employer as rich as this would choose to nickel and dime in this way, especially when someone’s ability to survive is at stake. I don’t shop at Walmart anyways (because I don’t support their predatory practices that destroy community business) - and I will be sure to share this with people in my community.
March 30th, 2008 at 8:17 pm
Hi Red Cedar,
Thanks for your thoughtful comment. I don’t ordinarily come down this hard, but this particular situation really infuriates me. Please do share this story with your friends and neighbors - I’d be absolutely delighted to see Wal-Mart boycotted to the point where the company sees fit to write off its claim against the Shanks family as a PR expense!
Lauren