RETAIL

WAL-MART IS SUED, ACCUSED OF FAILING TO MONITOR WORK CONDITIONS

LOS ANGELES – A lawsuit filed yesterday accuses Wal-Mart Stores of failing to monitor labor conditions at overseas factories that allegedly maintained sweatshop conditions. The suit seeks class-action status and claims Southern California grocery workers were harmed because Wal-Mart’s low prices – made possible by alleged substandard overseas factories – force competing grocery chains to cut wages and benefits. A Wal-Mart spokeswoman, Beth Keck, said the Bentonville, Ark.-based company had not seen the lawsuit but had begun researching the issues it raises. “It’s too early for us to talk in detail about this case,” Ms. Keck said. “It’s complex.”

The lawsuit was filed in Superior Court in Los Angeles under California’s Unfair Business Practices Act and was filed on behalf of two classes of plaintiffs. The first includes factory workers in China, Bangladesh, Indonesia, Swaziland, and Nicaragua that made garments and toys for sale in Wal-Mart stores. It claims those plaintiffs, identified only as John or Jane Doe, could not bring similar court actions in their own countries because of fear of retribution and corrupt court systems. The second group includes California grocery workers at stores such as Ralphs and Vons who saw their wages and benefits cut amid competition from Wal-Mart. The lawsuit was organized by the Washington, D.C.-based International Labor Rights Fund.

– Associated Press

IN BRIEF

A group of American lumber companies challenged the legality of the North American Free Trade Agreement yesterday, saying panels set up to settle trade disputes overstep their authority and violate the Constitution … Northwest Airlines defaulted on an $18.7 million payment to one of its commuter carriers and may file for bankruptcy as soon as today … Delta Air Lines may file for bankruptcy today as rising fuel costs and pressure to discount fares reduce its cash … Shareholders of America West Airlines’ parent company approved the carrier’s proposed merger with US Airways yesterday, one of the last milestones in the plan to wed the two geographically distinct airlines … A hearing-impaired client at Morgan Stanley was expected to file a lawsuit late yesterday claiming the securities firm discriminated against him because it doesn’t accept stock trade orders using a system that allows the deaf to communicate by telephone … Lehman Brothers probably will post a 37% increase in fiscal third-quarter net income, buoyed by fees from advising on stock sales and bond trading … Knight Ridder said third quarter profit will fall 20% after automakers trimmed advertising, newsprint costs soared, and Hurricane Katrina disrupted business in Mississippi … Carlos Ghosn, who led Nissan from losses to record profits, for the second time in three years rejected an overture to join Ford … The company also reached a final agreement to take back 23 plants and offices to help former parts unit Visteon cut costs … The Canadian Auto Workers union may go on strike against DaimlerChrysler AG’s Chrysler unit because the company wants to “outsource hundreds of jobs” in Canada … Best Buy shares tumbled more than 11% yesterday as the nation’s biggest electronics retailer missed Wall Street’s forecast despite a 25% rise in second-quarter earnings and said its profit for this quarter will be weaker than expected … A former Microsoft executive hired by Google to run a research center in China would be limited to recruiting staff and barred from setting budgets or working on research projects under a judge’s ruling yesterday … Microsoft also previewed the next versions of its Windows and Office programs, ahead of a stream of new products the company is betting will help spur growth of the broader personal computer industry.

– Bloomberg News and Associated Press