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But Craig R. Johnson, president of consultancy Customer Growth Partners, said Wal-Mart has started a turnaround that is based in part on attractive prices on name-brand items in electronics and toys, two key holiday categories.  

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Dear Jo-Ann

Seven years ago, a semi-trailer plowed into the driver's side of Deborah Shank's minivan.

The 52-year-old Missouri Wal-Mart employee and devoted mother of three suffered permanent brain damage. Today she lives in a nursing home for round-the clock care, unable to walk, feed or dress herself.

As the Wall Street Journal reported on November 20, it's a tragic story - but it gets worse:

"Wal-Mart started out as one of the good guys in this story, paying almost $470,000 of Shank's initial medical bills. But three years after Shank's husband sued and settled with the semi driver's employer, the retail giant changed hats. It demanded every penny back, plus interest and legal fees -- more, in fact, than the $417,477 the settlement had placed in a special trust fund specifically for Shank's future health care expenses."

Wal-Mart sued a permanently brain-damaged woman out of her medical care funds. Thanks to her former employer - the world's largest retailer - Deborah's family is sinking deeper into debt and Deborah will be completely dependent on Medicaid and Social Security for a lifetime of medical care.

Wal-Mart Watch is collecting funds to help Deborah Shank's family with her medical bills. Will you make a donation?

http://action.walmartwatch.com/deborahshank

Wal-Mart's actions are horribly unethical and morally bankrupt, but the company says it's legal - and it's right about that.

As the Wall Street Journal explains:

The reason is a clause in Wal-Mart's health plan that Mrs. Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit.

In cases like the Shanks', where injuries and medical costs are catastrophic, accident victims sometimes can be left with little or none of the money they fight for in court. Company health plans are increasingly adopting language such as Wal-Mart's, which dictates that it is to be paid first out of any settlement, regardless of what remains for the injured person. Moreover, the victim is responsible for all legal costs in pursuing the suit.

Last year the U.S. District Court sided with Wal-Mart over the Shank family - making its ruling just six days before Deborah Shank's 18-year-old son, Jeremy, was killed while serving in Iraq.

The decision has forced Deborah's family to take drastic measures. Earlier this year, her husband divorced her because of advice from a health care administrator, who said that she would qualify for more public assistance as a single woman.

The Shanks aren't gold-diggers. They are an honest, hard-working American family trying to deal with a catastrophic event, and now they're doing it with an empty wallet - thanks to Wal-Mart.

Please do your part to help the Shank family by making a donation now:

http://action.walmartwatch.com/deborahshank

This holiday season, Wal-Mart rolled out a new slogan: "Save money. Live better."

But who lives better with Wal-Mart's low prices? Clearly, it isn't Wal-Mart employees like Deborah Shank.

Sincerely,

David Nassar
Wal-Mart Watch

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The reason is a clause in Wal-Mart's health plan that Mrs. Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit.

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Injured Wal-Mart Employee Case Sparks Outrage, Donation Fund
This article was published on Wednesday, November 28, 2007 11:00 PM CST in Business
By Kimberly Morrison
The Morning News

The case of a former Wal-Mart Stores Inc. employee left brain damaged and wheelchair-bound after a collision with a semi-trailer truck, then forced to return the damages awarded for her future medical care back to Wal-Mart, has stirred national outrage over a case seen as an insurance nightmare where Wal-Mart is the bogeyman.

Debbie Shank, 52, was a stocker for Wal-Mart in Cape Girardieu, Mo., when the accident happened. Years of court battles ensued while Wal-Mart footed a $470,000 bill for her care. Her husband sued the trucking company and won. However, only $417,500 remained from the judgment after lawyers and expenses were paid. That money was placed in a Medicaid trust fund.

Three years later, Wal-Mart sued the Shanks for return of the funds paid toward her care. The Shanks lost their last appeal in August, and now their attorney is asking the Supreme Court to hear the case.

But news of the case was largely regional, and even that had quieted until last week, when reports by The Wall Street Journal and the Los Angeles Times sparked a wave of media attention that surprised even Shank's attorney.

"NBC is sitting in my waiting room," said Maurice Graham, Shank's attorney, in a phone interview with The Morning News from his St. Louis office.

Graham said the attention was deserving because this case was "among the most dramatic of inequities."

This coming from a man who specializes in business litigation involving catastrophic injury cases.

"It's a terrible tragedy," Graham said. "In this case, a big part of the damages were for her future care. Wal-Mart has not and will not pay any part of that, so they shouldn't be able to recover out of that.

"We're not saying Wal-Mart is not entitled to recovery -- they are entitled to a portion of expenses, but it has to be on a pro rata and equitable basis, not that they get it all."

National exposure of the case has in recent days caught the attention of health care and legal associations, incited venomous commentary in the blogging world, and played out on TV.

Wal-Mart Watch took action, establishing on Tuesday a donation fund for the family through its Web site, amid ongoing debates of legal and moral questions raised by the case.

At the heart of the issue is an increasingly common subrogation clause in employee health care contracts, including the one Shank signed with Wal-Mart. The clause says that if the injured party receives damages from an accident on which the company has paid medical expenses, the company has first dibs on it.

"This is a very sad case and we understand that people will naturally have an emotional and sympathetic reaction," Wal-Mart said in a statement. "When our associates, or their family members, suffer injuries or medical conditions which are the responsibility of others, our plan steps in to pay covered medical expenses so the associate and their families don't have to worry about their bills or have large out-of-pocket expenses. It is only after the associate or their family member receives a monetary payment from the responsible party that our health plan becomes entitled to reimbursement."

Wal-Mart added in its statement that money recovered is returned to the health plan, not the company, and it is done out of "fairness to everyone who contributes and benefits from the plan."

"While the Shank care involves a tragic situation, the reality is that we are required to protect the assets of our health plan so that it can pay the future claims of other associates and their family members," Wal-Mart said.

Jon Coppelman, senior vice president of Wellesley, Mass.-based Lynch, Ryan & Associates, a management-consulting firm specializing in workers' compensation, said the clause is unfortunate, but legal.

"The courts may feel some sympathy for Deborah Shank and her long-suffering husband, but the language of the policy is clear and unambiguous. The settlement dollars -- and then some -- belong to Wal-Mart," Coppelman said. "There is, of course, nothing wrong with this story. The language of an insurance policy has been enforced. The fiduciary obligation of Wal-Mart's health plan administrator has been fulfilled."

The tragedy for the Shank family continued well beyond the loss of their case. A week after losing their appeal, the Shanks also lost a son. Their 18-year-old son, Jeremy, was killed in Iraq while serving in the U.S. Army's 25th Infantry Division.

The Shank's attorney said Debbie is "totally and permanently disabled," only minimally aware of her surroundings in an assisted-care facility and having "only the shortest of memory."

Donations may be made to the family at[url] http://action.walmartwatch.com/deborahshank.[/url]

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that's what happens when we "settle" and "move-on".......

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that's what happens when we "settle" and "move-on".......

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Then I was over at Walmart on black Friday.  Put my stuff on the belt on the register and placed one of those separator things at the end of my stuff.  The cashier picked up the final item I had and then picked up that separator thingy and started turning it every which way looking for one of those bar codes.  Not finding one, she asked me if I knew how much the item (this separator thingy) was.  I said that no, I didn't, but I changed my mind, I dont' think I want to buy it.  With it still in hand, she shrugged and put it in the area near her register where other items were that people obviously changed their minds about.  Typical Walmart, she had no clue!

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Wal-Mart Takes Image Hit From Shank Case
By Kimberly Morrison
THE MORNING NEWS

Wal-Mart won a lawsuit against a former employee, injured in an accident that left her brain damaged, divorced and penniless, for reimbursement from her medical care.

But public relations experts say the cost to the company's image may outweigh the $470,000 it received for repayment from Debbie Shank's care.

It's a tragic tale of an insurance loophole called "subrogation" increasingly common in employee health insurance plans that allows a company to recoup expenses incurred for the injured party's medical care should that person receive damages from a lawsuit with a third party.

Shank, a 52-year-old former stocker for Wal-Mart in Cape Girardieu, Mo., signed such a contract with her then-employer before a traffic accident with a semi-trailer truck. After receiving a settlement from the trucking company, Wal-Mart did what experts say any corporation would -- demand repayment. In this case, it happened to be slightly more than the settlement amount left after lawyer's fees and expenses — about $417,000 placed in a trust for her future care.

Many health care officials have gone to bat for Wal-Mart, and any company's right to repayment under the terms of subrogation clauses, but public relations officials said there's no getting around this as a messy public relations issue.

"From a public relations point of view, it's an absolute nightmare for the company," said Alan Caruba, a public relations counselor and expert on corporate and public issues for the Caruba Organization in South Orange, N.J.



Wal-Mart, having previously provided an e-mailed statement about the case, declined to comment for this story.

Caruba said the company would do itself a favor by electing to let Shank keep the funding extended to her in the interest of the company's image, but that the interests of shareholders and the Wal-Mart insured shouldn't be overlooked.

"I'm sure the company pays out millions in health benefits in any given year, and those who receive the benefits are not the source of front-page news or editorial stories, but in this case, which is obviously quite tragic, the company has an obligation to protect its interests," Caruba said.

Companies today face a greater expectation from the public to be socially responsible beyond the bottom line interests, despite the fact that few companies would not have acted differently from Wal-Mart in this case, and that subrogation clauses are increasingly common in health care contracts.

"Today, companies have a much greater devotion to image in what we call 'the court of public opinion,'" said Sam Waltz, a counselor to businesses facing sensitive reputational issues at Sam Waltz & Associates in Wilmington, Del.

"The real question is, (is) Wal-Mart's predisposition in how it handles these claims the right course or the wrong course? My impression is that Wal-Mart did what every other employer would do, which is to say, 'Excuse me, but that award is double payment, and that belongs to us,'" Waltz said. "But new social policy is set every day and this becomes a case to examine how Wal-Mart and the industry feels about such cases."

Waltz said companies will often incur losses to further a reputation as a "sensitive employer," and Wal-Mart might in this case consider taking a noncrisis handle on the issue by forming an internal task force and empower the company to redress the case.

"Either way, they will sustain a reputational black eye because their predisposition has already been exposed," Waltz said.

The public's outcry over the case has echoed across the country.

The Wall Street Journal published a half dozen letters to the editor in response to its article. The Los Angeles Times wrote an editorial that the case was "legal, but wrong." Television news shows broadcast the story as a tragic insurance nightmare. Union-funded Wal-Mart Watch on Tuesday sent out a letter to e-mail subscribers soliciting donations to the family, and has not only raised nearly $5,000, which the organization will match, it has been overwhelmed with e-mail responses to the case.

Shank is left severely impaired both physically and mentally, living wheelchair-bound in an assisted care facility. Her husband, a maintenance worker, divorced her under advisement from a health care administrator because she would qualify for more public assistance as a single woman. And a week after losing their last appeal, the Shank's 18-year-old son, Jeremy, was killed while serving in Iraq.

Blogs have taken the story and ran with it, inciting discussions from the Wall Street Journal's law blog to the popular Daily Kos sounding off on the issue. Some say the law should be upheld, while others argue that the case illustrates Wal-Mart's unscrupulousness.

It's undoubtedly a tragic story, but experts said the case won't resonate with the public.

"It will not, in my opinion, create a lasting blemish on Wal-Mart's reputation. It is really the cumulative effect of these types of things, and speaks back to the issue of how Wal-Mart stewards its public," Waltz said. "In the big picture, Wal-Mart has taken so much reputational damage, that this is just one more shot across the bow."

Caruba warned that people's emotional reaction to the story ought not overrule their sensibilities.

"People don't understand that everything in society is bound together by contract, and when you start dismissing the fundamental rule of law, the whole of society is threatened," Caruba said.

"It is one of those situations where nobody's a winner, and, in a sense, everyone is a loser, including Wal-Mart," Caruba added, "but it's a huge company with thousands of employees, and there has to be a system of rules in place for everyone."

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subrogation  
  


Main Entry: sub·ro·ga·tion  
Pronunciation: \ˌsə-brō-ˈgā-shən\
Function: noun
Date: 15th century
: the act of subrogating; specifically : the assumption by a third party (as a second creditor or an insurance company) of another's legal right to collect a debt or damages