Table of Contents
Introduction
Business across the globe are constantly subjected to legal issues. Such issues do not only define their scope of operations but also limit their actions, thus prevent the incidences of consumer exploitation or unhealthy competition. Walmart, a successful retail firm in the US with branches across the globe is no different and in its effort to maintain steady growth, and proper working relations with consumers and other retail firms have enacted several legal issues. This paper seeks to analyze these issues by shedding light on their scope, mode of operations as well as providing recommendations on areas that need further readjustments.
Restrictive Covenants at Walmart
Business activities involve actions of contracting or subcontracting services, goods, or people. Legally, when engaging in such activities, the contracting parties must clearly outline their terms of operations. The process of legally defining the terms of the contract is the Restrictive Covenants. As (Nash, Netter & Poulsen, 2003) observes, a Restrictive Covenant is a legally binding agreement that prevents one party from taking some specified actions. When a business enters into a restrictive covenant, it agrees to refrain from doing things on the property or using the property in ways that are restricted in the contract. Walmart, Inc. has well defined restrictive practices dated 7th August 20, 2016. Among others is Non Competition.
Walmart’s Non-Competition agreement states that for five years (from 7th August 2016), the Holders will not either directly or indirectly control, manage, hold interest in, get employment as the executive or be assigned administrative roles (Walmart Inc., 2017). The further clause state that Walmart shall not, within this period engage in any business with any competitor, hold either direct or indirect interest in the management of a competing company in any part of the world (Walmart Inc., 2017). Non-Competition promise, therefore, exposes Walmart reluctance to engage its competitors in its daily activities of e-commerce, groceries, selling goods, merchandise via an online marketplace.
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Similarly, Non-Solicitation is part of Walmart’s Restrictive Covenants. Within the five-year term, the Holders shall not recruit, solicit or hire someone in its affiliate companies who is within the twelve months’ prior the date of recruitment, hiring or solicitation knowingly or by inducing them him with better packages (Walmart Inc., 2017).
Further, Walmart has the Non-Disparagement Agreement. According to this promise, within the term and even after, the Holders will not disparage Walmart or any of its affiliates in a way that may tamper with the goodwill, image or its reputation to the general public (Walmart Inc., 2017). This is undoubtedly a critical promise as it ensures that Walmart maintains an excellent image with suppliers, customers, and business partners.
Access and Use of Technology Resources
Access and Use of Technology is one of the driving forces behind the success of business across the globe. With the proper technology, enterprises speed up their operations and reach out to many clients within a short period (Srinivasan, 2004). Every company must, therefore, install appropriate technology which is accessible and user-friendly. At Walmart, technology resources are used to support administrative activities and conduct online sales. The company has online shops with free pickups and mobile Apps (Grill-Goodman, 2015).
Technology also assists in inventory optimizations and an assortment of advances through platforms such as Pangaea. Besides, there are tight policies requiring users to act responsibly and must respect the rights of other users. Users are also expected to respect the integrity of the system and other physical related resources (Grill-Goodman, 2015). Indeed, technological resources at Walmart are appropriately utilize under tight policies to increase the success of this company.
Access and Use of Confidential, and Propriety Information
Organizations acknowledge that during their operations, employees and customers might have access to highly confidential information about other customers or fellow workers (Thomas, 1996). The need to set minimum standards for safeguarding such confidential or propriety information is therefore crucial. Walmart applies this policy to enhance the protection of customers and employees’ data. Consumers are prohibited from accessing unauthorized data (Johansson, 2004). Employees are prohibited from logging into a server that management does not authorize them to access. Workers are also prohibited from attempting to interfere with the services of other users, and network. They are also banned from sending unsolicited emails such as promotions and product advertisements. To tighten its privacy systems, the company recently introduced acceptance terms where one has to agree with its terms of operation before purchasing goods or signing up to new accounts (Johansson, 2004). This is in line with the current practices used by competitors like Amazon, as well as Marks and Spenser.
Transfer of Intellectual Property Work Product
Walmart and its subsidiaries respect the intellectual property rights of others and have established an online IP Claim Form for the Intellectual Property (IP) rights owners and their agents where they can legitimately report the claims of IP infringements (Scanlon, 2008). The company strives to promptly process, investigate, and take appropriate actions on the complaints relating to the violation of the IP rights as required by the law. Some of the areas covered by the IP Claim Form include counterfeit claims, patent, trademarks, and copyrights.
Performance Evaluation
Like other companies, Walmart has its performance evaluation techniques. The most common methods are Customer Service Orientation, as well as analysis and problem-solving techniques. Using Customer Service Orientation approach, Walmart directly addresses the concerns of human resources in the retail context (Johansson, 2004). Thus, the success of the firm or an employee is anchored on the customer experience, satisfaction, and return on investment. Satisfaction established by analyzing customer feedback. Positive results show that the employee’s performance is at par. However, negative feedbacks call for thorough and continuous training and developments. On the other hand, Walmart applies analysis and problem-solving techniques to measure the performance of managers. The managers at this firm are expected to analyze and effectively solve workplace problems.
Although the current techniques have proven to be sufficient enough, I recommend the application of 360-degree feedback to enable the employees to share their views on their daily interactions with customers and management (Nash, Netter & Poulsen, 2003). This will help improve the efficiency of the organization, which then translates to better performance in the future.
Discrimination
Walmart was recently involved in affirmative action issues. Nearly a hundred workers filed lawsuits against Walmart on gender discrimination (Sainato, 2019). This is not the first time Walmart is faced with discrimination battle in court. In 2011, Walmart was taken to court by women who felt the company had systematically kept them out of management positions. As a move to solve this problem, the management should set certain management positions specifically for ladies. The recruitment process should also lower qualifications for ladies as a move to meet the affirmative action. It should also implement the advisory opinion on the female employment by the supreme court in the Walmart Stores v Dukes case (Sainato, 2019).
Health and Safety Standards
In spite of the rapid move to improve the health and safety measures of its employees and customers in 2013, it has been discovered that Walmart still the safety of its employees. Based on the reports by the Occupational Safety and Health Administration, Walmart has repeatedly failed to provide Hepatitis B vaccinations to employees, ensure that employees are inducted on the symptoms of Hepatitis B. Walmart has also failed to protect workers from hazardous exposure (OSHA, 2016). As a move to rectify the situation, it is advisable for the company to conduct continuous training health and safety measures.
Conclusion
In conclusion, legal issues are undoubtedly important for the success of business. In its effort to maintain the lead in the global market, Walmart has been keen on the legal issues and has indeed put in place key restrictive covenants to regulations its operations in the market. The company has also ensured proper access and use of technical resources as well as sound security on private and confidential information. There are also legal measures defining the transfer of intellectual properties and enacted standards for evaluation of employee performance. Although Walmart has achieved a lot on matters legal requirements, the firm is yet to meet the minimum standards on health and safety measures as well as affirmative action.
References
- Grill-Goodman, J. (2015). Five Ways Walmart is Investing in Technology. Retrieved 20 August 2019, from https://risnews.com/five-ways-walmart-investing-technology
- Johansson, B. (2004). An Introduction to RFID–Information Security and Privacy Concerns. TDDC03 Projects, Spring.
- Nash, R. C., Netter, J. M., & Poulsen, A. B. (2003). Determinants of contractual relations between shareholders and bondholders: investment opportunities and restrictive covenants. Journal of Corporate Finance, 9(2), 201-232.
- OSHA. (2016). Safety, health hazards at Florida Walmart Supercenter violate corporate-wide safety agreement | Occupational Safety and Health Administration. Retrieved 20 August 2019, from https://www.osha.gov/news/newsreleases/region4/03162016
- Sainato, M. (2019). Walmart facing gender discrimination lawsuits from female employees. Retrieved 20 August 2019, from https://www.theguardian.com/us-news/2019/feb/18/walmart-gender-discrimination-supreme-court
- Srinivasan, S. (2004). Role of trust in e-business success. Information management & computer security, 12(1), 66-72.
- Thomas, R. S. (1996). Improving Shareholder Monitoring of Corporate Management by Expanding Statutory Access to Information. Ariz. L. Rev., 38, 331.
- Walmart, Inc. (2017). Non-Competition, Non-Solicitation and No-Hire Agreement. Retrieved from: https://www.lawinsider.com/contracts/13Vs8Cw3HkRq0v116tNYv6/wal-mart-stores-inc/0/2017-03-31
