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Chinese Workers Reject Walmart Mediation Plan

Friday, June, 6, 2014

The closing of a Walmart store in China's Hunan Province has prompted a lawsuit filed against the American corporation by a collection of workers laid off in the process.  The lawsuit was sent to mediation between the workers and Walmart, which resulted in a settlement announcement.  However, the workers have rejected the terms of the settlement, stating that they do not feel “respected.”


The dispute stems from the closing of the Walmart store in March of 2014.  The announcement was made to workers and they were promised job transfers as well as compensation for lost jobs.  The employees immediately complained that they had not been given the thirty-day notice required by the labor agreement with Walmart and they had not been consulted concerning the terms of the compensation plan.


The settlement reached in mediation promised to pay each worker 3,000 yuan (the equivalent of $480) to cover legal costs, and nothing else.  The settlement has been flatly rejected by the store’s labor union chairman Huang Xingguo, representing the 69 workers who have signed onto the lawsuit.  The dispute has been referred to arbitration, and both parties have agreed to abide by the arbitrator’s decisions.


China’s burgeoning middle class has been very attractive to Walmart, which already has a deep manufacturing and supply relationship with China.  Walmart’s attempts to expand into China have led to mixed results, however, including some store closings due to disappointing revenues and an increasingly hostile relationship to China’s labor unions, to which Walmart has been historically opposed.