Print this article | Return to Article | Return to CFO.com
The estates of 73 former employees will get between $35,000 and $50,000 as part of a settlement involving the proceeds corporate-owned life insurance policies.
Stephen Taub, CFO.com | US
December 5, 2006
Wal-Mart Stores has settled a $5.1 million class-action lawsuit involving the proceeds of corporate-owned life insurance policies that plaintiffs claimed the retailer wrongfully received after the employees died, according to the Associated Press.
The estates of 73 former Wal-Mart Stores employees in Oklahoma will get between $35,000 and $50,000 as part of the settlement of the lawsuit brought against the world’s largest retailing chain.
Wal-Mart had taken out the life insurance policies on its employees and made itself the beneficiary. The lawsuit charged that Wal-Mart had no "insurable interest in the lives of its rank-and-file employees," according to the AP.
The company contended that it regularly spends millions of dollars each year to recruit, screen, train, and retain its employees because its success depends on a trained, experienced work force, according to the AP, which cited a document the judge entered into the court record last December.
One of the plaintiffs' lawyers, Michael Myers, saw broader implications in the case, "Several million Americans are covered by these policies," he told the AP. "Most were probably never told about the insurance on their lives, meaning that their families may not know that a claim may exist for policy benefits."
Concerning the settlement itself, Myers told the wire service that "it was a fair result for these Oklahoma families."
Wal-Mart chose to settle after the lawsuit was not dismissed last December, according to AP. "Corporate-owned life insurance policies were products offered by life insurance companies, they were common and well-intentioned but are no longer available at Wal-Mart," company spokesman John Simley reportedly said. "With regard to the settlement, it's the best possible resolution under the circumstances."