By all accounts, Jim Bill Lynn bled Wal-Mart blue. His friend Darrell Altom,
"It's corny, but it's part of the culture -- and he was so pro-Wal-Mart."
Lynn and Wal-Mart seemed made for each other. Driven, affable, and politically conservative, with clear managerial aptitude and a boundless appetite for work, Lynn was exactly the kind of young fella for whom Sam Walton's executives were always on the lookout. Wal-Mart was the company that had revolutionized logistics, the just-in-time movement of goods, and by those measures the Searcy center, where Lynn was hired on as a junior manager in 1993, was consistently one of the top three in the nation. Lynn's work there was so plainly outstanding that in 2000 Wal-Mart transferred him to its corporate headquarters at Bentonville. Lynn was just 32 -- the young parish priest summoned to Rome.
But Wal-Mart's faithful believe at their own peril. In 2002 the company sent Lynn to Central America, in a new position in which he was to report on any abusive labor practices he came upon in the factories that make the clothes Wal-Mart puts on its shelves. Lynn was shocked: He discovered factories whose fire doors were padlocked from the outside, and where women workers were fired if they turned up pregnant. Lynn firmly believed that his reports to the home office would lead to improvements. Indeed, he believed he was doing just what the company expected of him, right up to the moment when he was fired.
Lynn also believed in Wal-Mart's open-door policy, devised by Sam Walton himself, under which employees can talk to executives, without fear of retaliation, to challenge those decisions of their immediate superiors that they believe to be erroneous or unfair. "I always encouraged those who worked for me to use the open-door policy," Lynn says. The open door is a pillar of Wal-Mart's pseudo-paternalistic culture, a linchpin of the company's vehement anti-union posture. Whenever Wal-Mart workers start making noises about organizing themselves, managers invoke the open door as a source of assurance that workers can always find an understanding company judge waiting if they just plunk themselves outside his door.
Lynn's faith in the open door was still intact as he hastened back to Bentonville to talk to Wal-Mart's top executives. When he got there, however, he found they didn't want to hear from him at all. Today Lynn is one of several prominent Wal-Mart whistle-blowers suing the company in high-profile unjust-termination cases. Far from an open door, Bentonville had become Kafka's castle, from which abrupt and unalterable edicts descended with devastating force.
That was not the Bentonville that Lynn thought he knew when he reported for work to Wal-Mart's headquarters in January 2000. He soon became a divisional training manager for distribution-center operations, heading a team that traveled from one center to another, cutting down the turnaround time for groceries and dry goods and tires. He got a reputation as a troubleshooter who could go into a center that wasn't meeting its schedules, figure out the problem, and retrain the managers without threatening them. Davie Webb, who has known Lynn since they worked together at Searcy, says that Lynn "motivated people just with his pleasantness."
The work was nothing if not exacting -- the drives long, the hours longer, the centers at times brutally hot ("the ones for dry goods aren't air-conditioned," Lynn recollects) -- and Lynn still speaks of it, even after all that's happened to him since, with an air almost of romance. "I'd be in New York one week, California the next, Florida the next," he says in his soft southern lilt. "It was a great position to be in if you wanted to make an impact in logistics, if you wanted to expand your knowledge of the company -- and the country." In short order, Lynn was also representing the company at political fund-raisers, and was the guy who would give the company's lobbyists from the Patton Boggs law firm the tour of the distribution centers.
When you troubleshoot logistics for Wal-Mart -- the largest private-sector employer in the United States and employer of millions more around the world -- you're perfecting a marvel of the modern economy, a thing of beauty so long as you don't look too closely. Lynn knew what the critics were saying -- that Wal-Mart's "everyday low prices" condemned untold numbers of workers to wretched work lives in a global network of sweatshops -- but would have none of it. "When people said negative things, I was always a Wal-Mart defender," he says. "I was hardcore."
The trouble started in 2002, when Lynn relocated to Costa Rica with his wife, Julissa (a native of that country), and their three small children. Wal-Mart had just acquired Pacific Rim Export Limited (PREL), a procurement company that had been the intermediary between Wal-Mart and a host of suppliers in Central and South America. Lynn was named global services manager, in charge of exports, quality control, and factory certification of all Wal-Mart suppliers in the region. In February, he began work at PREL headquarters, where he was the sole American on the premises.
In March, Lynn took his first inspection trip, this one to Honduras. The true believer could not believe his eyes. In the first supplier factory he visited, the Glory Garments factory near San Pedro Sula, Lynn found a facility, he says, "that didn't have potable drinking water, that had no toilet paper in the restrooms, and where the fire exits were padlocked. They did pregnancy testing on the women, and if it came back positive, [the women] were terminated." He also discovered that, contrary to Wal-Mart's stated policy, factories received at least three-day advance notification of factory-certification visits -- enough time, in other words, to clean up their facilities. Quality-control visits, by contrast, which checked on the product only, occurred with no such advance notification. Such conditions, he soon discovered, were rampant throughout Central America. (Beth Keck, Wal-Mart's director of international corporate affairs, doesn't confirm or deny Lynn's specific findings, but asserts that "the matters he raised were investigated and addressed.")
What's more, Lynn discovered, the factory-certification reports that attested to the factories' compliance with Wal-Mart's workplace standards were routinely falsified under pressure from Moon Chung, a PREL executive who was general manager of PREL's Honduran and Guatemalan operations. As Lynn noted in an April memo to the head of the Central American facilities, Odair Violim, "Moon pressures [inspectors] to Pass factories that have failed Final Inspections. They have all received this type of pressure from Moon in the past. When a factories [sic] does not meet the Wal-Mart guidelines for a final inspection, Moon argues, threatens, yells and cusses them, our Wal-Mart Associates." One Guatemalan inspector, forced by Moon to change his evaluation, wrote, "Ship, per Moon Chung" on the certification form.
Lynn's inspection visits left him stunned. The night he visited Glory Garments, he called his wife and wept. He called Bentonville and complained. He shot reports back to the home office. He assumed things would change. Instead, Lynn soon found that the company was more alarmed by the existence of his reports than by the substance of them. He traveled to Bentonville to report his findings to Denise Fenton, Wal-Mart's director of factory certification -- who promptly instructed him in some of the finer points of certification policy. "First," Lynn recalls, "you can only interview 30 people [per factory]. If you get to the 29th and 30th and discover stuff, it doesn't matter -- you have to stop. Second, even though Wal-Mart says they want unannounced inspections, we had to notify the factories in advance. If there were any blatant violations, they had the opportunity to clean those up."
It was abundantly clear to Lynn that Violim was out to get him. Lynn says that soon after his arrival in Costa Rica, Violim took away his key to the office and changed the alarm codes, denied his requests for security when he traveled in the field, and was furious when Lynn went over his head to tell Bentonville that he would not travel without security to Colombia. The tipping point may well have come at a meeting in Costa Rica that April with Mike Duke, then Wal-Mart's executive vice president for administration and today its vice chairman (and possible successor to CEO H. Lee Scott). Lynn was kept out of most of the meeting, but at the end of the day he was allowed to give a PowerPoint presentation on the condition of area factories. When he was done, Lynn recalls, Duke asked him what grade he would give Wal-Mart on its factory-certification program. "I said, 'C-minus or D-plus.' I didn't realize what a surprise this would be to everybody."
As soon as the meeting was done, Lynn says, he was taken aside by Violim and Peter Allison, who was managing director of Wal-Mart's global-procurement division. "I was told, 'You don't tell a man like Mike Duke something like that.' I had never before in my career been told to lie."
Lynn's career at Wal-Mart was just about done. The following week, Violim sent Lynn and Martha Bolanos, a co-worker who reported to Lynn, to Guatemala for another inspection tour. Lynn had been repeatedly assured that Wal-Mart would provide security on this trip, as it routinely does in potentially dangerous countries. When he arrived, though, there were no guards in evidence. What Wal-Mart had arranged for instead was an undercover surveillance team to shadow Lynn and Bolanos, and it documented virtually their every move.
Two weeks later, Lynn was summoned to a meeting with Violim and Andrea Cooper, the human-resources manager for the company's global-procurement division, who'd come down from Bentonville for the occasion. Escorted by Wal-Mart security guards, who stayed just outside the room, Lynn was accused of violating the company's fraternization policy. In Lynn's account, Violim informed him of the surveillance, yelled and cursed at him, and told him he could not leave the room without forfeiting his job unless he signed a statement acknowledging his relationship with Bolanos. The statement Lynn signed said that he and Bolanos had kissed -- and Lynn does acknowledge that "there was a kiss." The following day, Lynn was discharged. Bolanos, who remains in Central America and is unavailable for comment, was discharged, too.
The company says that Lynn's firing was solely the result of his interactions with Bolanos. "This is not a whistle-blower case," says Beth Keck. "He was terminated because he had inappropriate contact with a woman who directly reported to him."
But Lynn believes otherwise. In the legal complaint he's filed against Wal-Mart, he contends that the company had already quietly transferred an employee from Mexico to take over some of Lynn's duties fully one month before his discharge. "I was fired way before I was fired," he says. "There was no way they meant to retain me, even before the trip to Guatemala." And, he says, several hours after he was fired he was told by one Wal-Mart executive, "Look, we never get involved with stuff like this [surveillance to document violations of the fraternization policy]. Somebody wanted you gone, bad. Get on a plane to Bentonville and talk to the people there."
In a final act of faith in the open-door policy, Lynn returned to the United States and requested a meeting with Scott or former CEO David Glass, but was turned down. Finally, he was granted an audience with Mike Duke -- the very same Mike Duke who'd presided over the meeting that Lynn believed had sealed his fate. "It was all Mike Duke," Lynn says. "I wanted to report to somebody in the States that I trusted, and he gave me a lecture." Duke subsequently called Lynn to tell him that he'd informed Scott of Lynn's complaint, and that Scott agreed with Duke's verdict: that Jim Bill Lynn would not be going back to work for Wal-Mart.
The case of James Lynn v. Wal-Mart, which was filed in a state court in Bentonville earlier this year after settlement negotiations proved fruitless, is one of several prominent pending actions in which whistle-blowing Wal-Mart employees contend that what they got for exposing misdeeds within the company wasn't the open door but simply the door. Lynn's story is also featured in Robert Greenwald's new film, Wal-Mart: The High Price of Low Cost, which is being released this November. In response, Wal-Mart appears to be going on a public-relations offensive. In particular, the company seems bent on denying, or at least deflecting, the considerable body of documentation that attests to its seminal role in the creation of the global sweatshop economy.
Keck, Wal-Mart's director of international corporate affairs, argues that Lynn's exposé of labor practices among the firm's Central American suppliers actually bore fruit. Odair Violim and Moon Chung, she says, "are no longer with the company. So we did take seriously everything he did tell us." Factories whose conditions Lynn cited, she continues, were inspected, and those conditions remedied or the factories were terminated. Keck argues that Wal-Mart has greatly beefed up its inspection program since Lynn was fired, that there is no tolerance for pregnancy-related terminations or padlocked fire doors, and that workers interviewed during the inspections now receive protection from management retaliation. But she acknowledges that outside groups are still not permitted to conduct authorized inspections of their own, though she adds that that is a policy that Wal-Mart is "working for."
But Charles Kernaghan, who heads the National Labor Committee in Support of Human and Worker Rights, one of the foremost sweatshop-monitoring organizations, disputes Keck's claims that Wal-Mart has cleaned up its suppliers' Central American operations. The Han Soll facility in Honduras, Kernaghan says, was locking workers behind barbed wire so they would labor for 10 to 13 hour days as recently as this May. "They've been saying they've improved their monitoring, but those shops were still all sweatshops," he says.
For Lynn, life after Wal-Mart has not been easy to adjust to. For some time, he says, he wondered why the company hadn't just moved him to a different area: "I was great in logistics; why not just relocate me? But they wanted me out of the company, and to make sure it's so embarrassing that you can't talk about it." He works now for a cold-storage company in Arkansas, and he has not yet recovered from the shocks of surveillance, severance, and betrayal. "The faith I still have," he says, "is my faith in the legal process, that if [my case] gets to court, my peers in Arkansas will be able to pick apart what the truth is."
It's a personal battle, but Lynn sees it as bigger than that, too. "My friends in the company knew what kind of worker I was," he says. "They say, 'If they can get you, nobody's safe.'"
Harold Meyerson is editor-at-large of The American Prospect.