Racial Equity Audit
PROPOSAL
7
RESOLVED: Shareholders request Walmart Inc. (“Walmart” or
the “Company”) conduct a third-party, independent racial equity
audit analyzing Walmart’s adverse impacts on Black, Indigenous, and
People of Color (BIPOC) communities, and to provide recommendations
for improving the company’s racial equity impact. Input from
employees, customers, and racial justice, labor, and civil rights
organizations should be considered in determining specific matters
to be analyzed. A report on the audit, prepared at reasonable cost
and omitting confidential and proprietary information, should be
published on Walmart’s website.
INTRODUCTION
Racial equity audits (REA) conducted by independent, third-parties
can provide company leadership with an objective evaluation of
whether and how company policies, practices, and culture are
combatting or perpetuating systemic racism and racial
inequities.
As the largest private sector employer, Walmart has a significant
influence on society and the economy. Company policies and
practices impact hundreds of thousands of BIPOC workers and their
families. Walmart received an “F’ rating on the 2023 Racial and
Gender Pay Scorecard from Arjuna Capital and Proxy Impact, a
strong indication that there are profound inequities among minority
demographics at the company.i
Racial equity audits have quickly become an industry
standard. Multinational companies such as Facebook, Apple,
Airbnb, CITI, and Starbucks have agreed to analyze their impact on
BIPOC workers and communities by conducting a racial equity audit.
For the 2023 season, shareholders filed REA proposals at 14
companies across a wide variety of industries, this proposal being
one of them.ii Given Walmart's workforce demographics,
shareholders want to ensure Walmart is honoring its DEI commitments
and not directly or indirectly contributing to or creating racial
inequities in the diverse communities in which it operates. The
benefits of such an audit significantly outweigh the competitive,
legal, and reputational risks the company may face.
The REA recommendations can help Walmart address its contributions
to systemic racism, improve employee retention and satisfaction,
and enhance its public image.
Address Systemic Racism
Walmart has faced public outcry and lawsuits over discriminatory
hiring and promotion practices.iii iv The company is
accused of favoring white candidates over people of color,
particularly at the management, executive, and board level.
Presently, people of color comprise 49% of Walmart’s total U.S.
workforce but only 27% of its officers and only 18% of its Board of
Directors.v An internal survey conducted by Bloomberg in
2021, found that many high-ranking Black Walmart employees
“wouldn’t recommend working there” citing unequal access to growth
opportunities and favoritism as they attempted to advance their
careers.vi
Walmart has also faced criticism for its broader impact on
communities of color. The company's reliance on tax breaks and
government subsidies harms communities of color and strips local
government budgets.vii Hundreds of thousands of
Walmart associates are dependent on Medicaid, Supplemental
Nutrition Assistance Program (SNAP), and other publicly subsidized
systems of support because Walmart’s hourly pay keeps associates
below the poverty line.
A study published by the American Sociological Association found
that the worst Walmarts in America are located in low-income
minority communities.viii The study discovered that
stores located in areas with lower average incomes had
significantly worse customer reviews than locations in higher-
income zip codes. Additionally, Walmart locations serving
heavily Black and/or Latino communities had worse reviews relative
to stores located in predominantly white communities.
Improve Employee Retention and Satisfaction
Advocates and policy makers have long been concerned about the
company's treatment of its own workforce. Walmart's low wages,
anemic benefits, and punitive and unsafe work environments
disproportionately affect people of color, as nearly half of
Walmart’s workforce are BIPOC.ix
Despite its public commitments and philanthropy, Walmart is failing
to address the needs of its diverse workforce. A 2022 congressional
report found that Walmart laid off double the amount of Black
workers during the pandemic compared to their white
counterparts. In the report, Walmart was identified as having “some
of the largest racial inequities of the surveyed companies when it
came to employment outcomes.” x
In addition, starting hourly pay is still under $15 making
Walmart an outlier among its peers and leaving many associates
struggling to make ends meet on poverty wages. The company does
not disclose gender or racial pay gaps so it is currently
impossible to know whether BIPOC workers are concentrated in lower
paid positions.
A 2023 Indeed survey found that 49% of Black workers reported
wanting to quit their jobs, citing lack of pay transparency, a
misalignment of personal values with the company, and the need for
more diverse leadership as heavily impacting their decision.
Addressing the root causes of disparities in hiring, pay, and
promotions is an essential step toward improving employee morale
and retention at Walmart. By creating a more inclusive and
supportive workplace culture, Walmart can ensure all associates
feel valued, respected, and safe at work.
Enhanced Public Image
Walmart’s failure to address the direct and indirect harms caused
by company policies and practices also hurts its reputation with
customers, policymakers, activists, and employees.
Walmart's poor labor practices, impact on local communities, and
monopoly power have long attracted public scrutiny, regulatory and
legal action, as well as negative press. The company has recently
caught fire for racial profiling of customers, culturally
insensitive security policies, and discriminating against Black
executives and hourly employees.
In 2022, a Black associate in Iowa sued Walmart for racial
discrimination after she was allegedly given an unsanitary
lactation space and passed up for a promotion.xi In a
landmark class-action case that made it all the way to the Supreme
Court, Walmart associate Betty Dukes sued the company for racial
and gender discrimination in the workplace.xii That case
followed a 2015 suit brought by six former Walmart associates
alleging Walmart gave preferential treatment to younger, white
employees.xiii
In addition, the company was heavily criticized for its policy of
locking up “multicultural” hair and beauty products in
2020xiv and made national headlines in August 2022 when
Michael Mangum, a Walmart truck driver, was awarded $4.4 million
after being harassed and racially profiled by a white Walmart
associate.xv A few months later a white Walmart
associate’s “racist tirade” against a Black customer was caught on
video.xvi
Given the demographics of its workforce and customers, Walmart must
ensure company leadership is fully aware of the unintentional
impacts of company policies and practices on BIPOC workers and
communities and proactively take steps to address the harm caused
and prevent new harms from unfolding.
A racial equity audit can inform and facilitate any course
correction necessary to promote racial equity and protect the
company from risk, reputational and otherwise.
Conclusion
By conducting an independent, third-party racial equity audit
Walmart can better understand the company's adverse impacts on
marginalized and disenfranchised communities of color.
Implementation of the recommendations made in the audit can
mitigate against the harms caused to BIPOC communities and ensure
the company's public commitments to racial justice and equity are
being honored.
Doing so will cement Walmart as an industry leader and reduce
the company's exposure to risks stemming from legal actions,
government investigations, and negative press. Walmart will also
reap the benefits of improved employee satisfaction and retention,
as well as an enhanced public image.
For these reasons, we urge Walmart shareholders to vote FOR
Proposal 7.
_____________________________
i
Arjuna Capital and Proxy Impact: 2023
Racial and Gender Pay scorecard. March 2023.
ii
Majority Action: Racial Equity
Auditing. April 2023.
iii
Business & Human Rights Resource Centre: Wal-Mart settles racism lawsuit for $17.5
million. 12 Feb, 2009. Accessed 7 April, 2023.
iv
Marciano, M. Former Employee Files Race Discrimination Complaint
Against Walmart. Connecticut Law Tribune. 28 Oct, 2022. Available
at:
https://www.law.com/ctlawtribune/2022/10/28/former-employee-files-race-discrimination-complaint-against-walmart/.
Accessed 7 April, 2023.
v
Corporate Walmart: Culture, Diversity,
Equity & Inclusion 2023 Report.
vi
Repko, M. “Walmart’s Black senior managers give the company low
marks, report says.” CNBC. 8 July, 2021. Available at: https://www.cnbc.com/2021/07/08/walmarts-black-senior-managers-give-the-company-low-marks-report-says.html/.
Accessed on 7 April, 2023.
vii
Center for Community Planning and Development Hunter College and
the Public Advocate for the CIty of New York Bill de Blasio:
Wal-mart’s Economic Footprint. Hunter College. 10 Jan, 2010.
Available at: https://goodgrowthdekalb.files.wordpress.com/2012/02/walmart-hunter-college-2010.pdf.
Accessed on 7 April, 2023.
viii
Taylor, Kate. A study reveals a disturbing trend about Walmart
locations across the US. Business Insider. 30 Aug, 2016. Available
at: https://www.businessinsider.com/worst-walmart-stores-are-in-poor-neighborhoods-2016-8,
Accessed on 7 April, 2023.
ix
Corporate Walmart: Culture, Diversity,
Equity & Inclusion 2023 Report. Corporate Walmart:
Culture, Diversity, Equity &
Inclusion 2023 Report.
x
Tobin, B. “Walmart fired Black hourly employees twice as often as
their white coworkers at the pandemic’s start, congressional report
says.” Business Insider. 21 Nov, 2022. Available at: https://www.businessinsider.com/walmart-fired-black-workers-twice-as-often-early-pandemic-report-2022-11.
Accessed on 7 April, 2023.
xi
Bloomberg Law: Walmart Sued for Gender, Racial Discrimination in
Iowa by EEOC. 11 Feb, 2022. Available at: https://news.bloomberglaw.com/daily-labor-report/walmart-sued-for-gender-race-discrimination-in-iowa-by-eeoc.
Accessed 7 April, 2023.
xii
Corkery, M. Betty Dukes, Greeter Whose Walmart Lawsuit Went to
Supreme Court, Dies at 67. The New York Times. 18 July, 2017.
Available at: https://www.nytimes.com/2017/07/18/business/betty-dukes-dead-walmart-worker-led-landmark-class-action-sex-bias-case.html.
Accessed on 7 April, 2023.
xiii
Schmidt, T. Six former employees sue Walmart for race and age
discrimination. KPLC News. 10 Oct, 2015. Available at: https://www.kplctv.com/story/29764174/six-former-employees-sue-walmart-for-race-and-age-discrimination/.
Accessed on 7 April, 2023.
xiv
Bhattarai, A. “Walmart will stop locking ‘multicultural’ hair and
beauty products.” The Washington Post. 11 June, 2020. Available at:
https://www.washingtonpost.com/business/2020/06/11/walmart-will-stop-locking-multicultural-hair-beauty-products/.
Accessed on 7 April, 2023.
xv
Franklin, J. “A man is awarded a $4.4 million settlement after
being racially profiled in Walmart. NPR. 25 Aug, 2022. Available
at: https://www.npr.org/2022/08/25/1119385178/walmart-oregon-settlement-racial-profiling.
Accessed on 7 April, 2023.
xvi
Goldberg, N. “Moreno Valley Walmart worker accused of launching
racist tirade against Black customer.” Los Angeles Times. 28 Nov,
2022. Available at: https://www.latimes.com/california/story/2022-11-28/moreno-valley-walmart-employee-accused-of-going-on-racist-tirade-against-black-customer.
Accessed on 7 April, 2023.
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