Monday, January 12, 2004
The depths of greed
Wal-Mart Stores Inc. has settled a lawsuit over its practice of taking out life insurance on employees and making itself the beneficiary.
The settlement with families of employees who died was reached hours before a federal appeals court ruled against the giant retailer. Terms of the deal, reached earlier this week, were not disclosed.
Wal-Mart officials said the settlement could benefit relatives of 150 to 500 employees although only about six families were part of the lawsuit.
The families who sued alleged that Wal-Mart never told workers about the life insurance policies - Wal-Mart disputes that claim - and said they were enraged that the company profited but they received nothing from the proceeds.
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Wal-Mart is one of many large U.S. companies in recent years that have taken out policies on the lives of employees, ranging from executives to workers on the bottom rungs of the pay ladder, with the goal of collecting benefits when the employees die. Companies term the policies corporate-owned life insurance, or COLIs. Critics call them dead-peasant policies.
Wal-Mart set up a trust in 1993 and named itself as beneficiary on policies for 355,000 employees.
What?!?
posted by chris at 4:34 PM
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