May 2, 2002

Wal-Mart, the fiercely anti-union retailing giant and an organizing target of the Teamsters Union, has taken out secret life insurance policies on its workers while naming the company as beneficiary.

“I never dreamed they could profit from my husband’s death,” Jane Sims told the Houston Chronicle after Wal-Mart collected $64,000 on her spouse, who worked 11 years at a Texas distribution center until his 1998 fatal heart attack. Sims is part of a lawsuit charging that Wal-Mart took out some 350,000 similar policies, then wrote off premium costs as a tax-deductible business expense.

Unlike executive insurance on key management personnel, which is disclosed to the investor and to shareholders, so-called “dead peasant” insurance is generally kept hidden from view.

“This blood money can be used for whatever the company wants, but most importantly, it is rarely used to compensate the families of the dead employee,” said Rep. Gene Green (D-Texas). Green has introduced a bill to require employers to notify workers when a policy is taken out on them, and has sought clarification from the Internal Revenue Service about the tax treatment of premiums.