An Apology from Walmart

April 4th, 2008 by

Back in November, just before Thanksgiving, we blogged the story of Deborah Shank, a 52 year old woman who stocked shelves in Wal-Mart’s Cape Girardieu, Missouri store. Here’s how we described the situation:

Seven years ago, [Deborah] was perusing yard sales with a friend when a tractor trailer plowed into her van. She was left with permanent brain damage. Walmart paid about $470,000 in medical expenses. The Shanks sued the trucking company and collected about $1 million, the limit of liability under the company’s policy.
Jim Shank, Deborah’s husband, used his portion of the settlement to buy an accessible home for his disabled wife. After paying legal fees, his wife was left with $417,000 to help supplement her care. End of sad story? Not quite.
When she signed onto the Walmart health plan, Deborah agreed that her employer would be first in line for payment out of any subrogation. [This type of language in employer health insurance policies is becoming increasingly popular.] Walmart sued Deborah for $470,000 plus legal expenses – in other words, they are suing for more than the balance of her settlement funds. They rejected the Shank’s offer to settle for a portion of their costs. And of course, Walmart being Walmart, they have won the suit.

Despite the odds, at the time of the blog Jim Shank was pursuing an appeal to the Missouri Supreme Court. We predicted he would lose and he did. End of family, end of story?
Not Quite.
The Court of Public Opinion
In an extraordinary and totally uncharacteristic move, Wal-Mart has backed away from its claim on Deborah Shank’s settlement. They won, but they have generously decided not to collect. Pat Curran, Wal-Mart’s Executive VP for operations wrote to Jim Shank: “Occasionally, others help us step back and look at a situation in a different way. This is one of those times. We have all been moved by Ms Shank’s extraordinary situation.”
Curran said that Wal-Mart would drop its claim and would work with the family on Shank’s continuing care, adding: “We are sorry for any additional stress this uncertainty has placed on you and your family.”
When Jim shank received the letter at the beginning of April, he thought it was an April Fool’s joke. It’s no joke. Wal-Mart, invincible in the courts, has surrendered to the devastated and defenseless Shanks.
When the original story broke, we acknowledged that Wal-Mart was within its rights to seek reimbursement for expenditures under the employee health plan. Nonetheless, we awarded the retailing behemoth a turkey, for turning a tone-deaf ear on the pain and sorrow of the Shank family. (Their son, Jeremy, was killed in Iraq shortly after their case was dismissed at the appeals court level.) Wal-Mart has finally come to realize that there may actually be something more important than the bottom line. They have taken a huge PR hit for their relentless focus on cost-cutting perfection. Pursuing the Shank family may have been legally sound, but it was utterly lacking in compassion. Sure, America loves a bargain, but we believe in fairness, too.