On December 9, 2009, Wal-Mart disclosed that it had settled a long-running wage and hour dispute in Massachusetts for $40 million. According to the Boston Globe, this was the largest wage and hour settlement in the state of Massachusetts. Interestingly, it was just a year ago at the end of 2008 that Wal-Mart reported that it had paid $640 million to settle similar wage and hour violations in 63 federal and state lawsuits.

QUESTIONS:

1. For SEC and investor purposes, what documents does Wal-Mart release that presents information about the violations?
2. What are some of the possible wage and hour violations that a company could commit?
3. How do you think that settlements are recorded in the company’s accounting records?
4. The article also mentions disclosure of a Philadelphia lawsuit, where a judge ordered Wal-Mart to pay $188 million for a wage and hour violation. Since the case is currently under appeal, should the company accrue the litigation judgment? Explain your answer.

SOURCE:

Leder, Michelle. (2009). Wal-Mart Settles Wage and Hour Claims for $40 Million. Footnoted.org (Retrievable online at http://www.footnoted.org/buried-treasure/wal-mart-settles-wage-and-hour-claims-for-40-million/)