FINANCE

Wal-Mart Settles Labor Suits for Up to $640 Million

BY CSA STAFF

Bentonville, Ark. Wal-Mart Stores said late Tuesday that it has agreed to pay workers up to $640 million to settle 63 labor lawsuits. The settlement will end years of ongoing dispute.

According to Wal-Mart, the actual amount it pays will depend on how many claims are submitted by eligible workers and could range from $352 million to as high as $640 million.

Each settlement still must be approved by a trial court.

Wal-Mart faced 76 similar class action wage-and-hour lawsuits in courts across the country as of March 31, the company said in its most recent 10-K filing with the Securities and Exchange Commission.

However, the company added that many of the settled lawsuits were filed years ago and said the allegations are not representative of the company’s policies.

“Our policy is to pay associates for every hour worked and to provide rest and meal breaks,” Tom Mars, Wal-Mart’s executive VP and general counsel, said in a statement.

Earlier this month, Wal-Mart said it would pay up to $54.25 million to settle a class-action lawsuit alleging it cut workers’ break time and didn’t prevent employees from working off the clock in Minnesota.

Last year, Wal-Mart said it would pay more than $33 million in back wages to thousands of employees after turning itself in to the Labor Department for paying too little in overtime over the previous five years.

Also last year, a judge in Pennsylvania ruled that Wal-Mart workers in that state who previously won a $78.5 million class-action award for working off the clock will share an additional $62.3 million in damages.

Under the announced agreement, Wal-Mart will continue to use various electronic systems and other measures to ensure its compliance with wage-and-hour policies and law.

Wal-Mart, one of the few retailers doing well in a dismal holiday season, said it would take an after-tax charge to continuing operations of about $250 million in its fiscal fourth quarter.

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NRF calls for national sales tax holidays

BY CSA STAFF

WASHINGTON The National Retail Federation has asked President-elect Barack Obama to incorporate a series of national sales tax holidays into upcoming economic stimulus legislation as an important step toward rebuilding consumer confidence, saying short-term gains from consumer spending and long-term growth from job creation are both needed to achieve economic recovery.

NRF proposed that tax holidays be held during March, July and October 2009, each lasting 10 days including two weekends. Tax-free treatment would apply to all tangible goods subject to a state sales tax ranging from apparel and home furnishings to restaurant dining and automobiles but would exclude tobacco and alcohol. The federal government would reimburse the 45 states that have sales taxes for the lost revenue, and would provide the five states without a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon) with revenue approximating the sales tax reimbursement that would be received by states with similar population.

NRF also called for infrastructure investment in roads, rails, ports, public schools and renewable energy projects, saying it would have a double benefit of creating jobs and repairing systems that are critical to commerce.

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Pershing Square extends Borders financing agreement

BY CSA STAFF

ANN ARBOR, Mich. Borders Group announced an agreement with Pershing Square Capital Management, L.P. on behalf of its affiliates, to extend the expiration date of the previously announced Borders option to “put” its U.K.-based Paperchase gifts and stationery business to Pershing Square for $65 million, subject to certain conditions.

The “put” was due to expire Jan. 15, 2009, but has now been extended until Feb. 16, 2009. At the same time, the deadline for repayment of the $42.5 million senior secured term loan, which was originally payable to Pershing Square by Borders on Jan. 15, 2009, has also been extended to Feb. 16, 2009. Other terms of the “put” option and the term loan remain unchanged except that the approximately $1 million loan repayment premium that Borders is required to pay Pershing upon repayment of the $42.5 million loan remains due no later than Jan. 15, 2009.

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