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Why Walmart Shouldn't Pick and Choose Which Lawsuits to Settle

In the department of everyday low prices, Walmart (WMT) is paying $440,000 to reinforce its no-tolerance policy on discrimination and harassment. It amounts to a pittance for the mega-chain with net sales in excess of $400 billion last year. But it's a priceless PR move at a time when litigation woes are mounting.

The sum will settle a lawsuit by the U.S. Equal Employment Opportunity Commission (EEOC) on behalf of nine Mexican immigrant workers at a California Sam's Club alleging they were harassed about their ethnicity by a Mexican-American colleague. Perhaps because the incident only involved a few employees and didn't require vast sums of money, it was easy for Walmart to take the high road.

Spokesman Greg Rossiter, said the associate spouting the slurs was fired and that Sam's Club has strong policies against discrimination and harassment. "When the full extent of the allegations was brought to the company's attention, we took them seriously, they were thoroughly investigated and we took immediate action." Immediate translating to nearly six years, that is.
Walmart also just paid out $12 million to settle another discrimination claim by a former associate and the EEOC alleging that the company based hiring decisions on gender. This is on top of the $27 million Walmart also paid to settle a civil case in California.

But those are small potatoes compared to the decade-long tussle that has become the largest class action lawsuit in U.S. history. The Supreme Court will now decide if the world's largest retailer did indeed discriminate against 1.5 million female employees (more than its entire current workforce) and denied them equal pay and promotions. Walmart continues to push back saying it didn't treat the workers unfairly and that there is no grounds for the suit to be a class action.

This is more than just the cost of doing business. Walmart needs to take a stand on all the suits it has pending right now. All the new strategies and products under the sun won't be enough to restore consumer confidence if the company's making headlines for treating its workers poorly.

With sales still trending down, Walmart would do well to stop picking and choosing which suits to settle and which to continue fighting. No amount of spin coming out of Bentonville's War Room -- the behemoth's rapid response PR bucket brigade - can churn public opinion in its favor until it does.

Image via Walmart
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