Wednesday, July 6, 2022

Does Walmart Take Out Life Insurance On Employees

Don't Miss

A Standard Of Review For Equitable Relief

Episode 19 – Walmart: Dead Peasant’s Insurance

In addition to challenging Prudential’s plan interpretation and the basis for its denial of benefits, Grimes also alleges that Wal-Mart misled her husband, failed to provide him with a clear summary of the plan, manipulated the LOA process, and otherwise breached its duty to act in good faith. These allegations involve ERISA’s equitable provisions.

29 U.S.C. §§ 1022, 1104, and 1133.

In Firestone, the Supreme Court limited its analysis to actions challenging benefit denials based on plan interpretations, and did not address the appropriate standard of review for actions under the equitable provisions of ERISA. So, while a deferential standard of review is available to claims that involve plan interpretations, claims that address a defendant’s fiduciary responsibilities under the equitable sections of ERISA should be reviewed under a de novo standard.

Firestone,489 U.S. at 108.

Firestone,489 U.S. at 111-12 Moench v. Robertson,62 F.3d 553, 564-65 , cert. denied, 516 U.S. 1115 see also In re Unisys Savings Plan Litigation,173 F.3d 145, 154 Carriers Container Council, Inc. v. Mobile S.S. Ass’n Inc.-Intern. Longshoreman’s Ass’n, AFL-CIO Pension Plan and Trust,896 F.2d 1330, 1341 n. 20 Ches v. Archer,827 F.Supp. 159, 165 .

Allegations Of Wrongful Termination

On January 13, 2011, four employees at a Walmart in Layton, Utah were confronted by a shoplifter who pulled out a handgun and took one of the employees hostage in an attempt to leave a small, closed office. The other three employees disarmed and subdued the shoplifter, and all four held onto the man until police arrived. A week later, the four employees were fired for violating a company policy requiring employees to “disengage” and “withdraw” from any situation involving a weapon. The four fired employees, together with two other Walmart employees who had been fired after subduing violent customers, sued Walmart in the United States federal court in June 2011. After the Utah Supreme Court ruled that Utah law prohibited the firing of workers for defending themselves from injury or death, Walmart and the workers settled the case on undisclosed terms.

On July 9, 2013, an employee at a Walmart in Kemptville, Ontario confronted a customer who had left his dog locked in his truck with the windows rolled up. She called the police when the customer refused to solve the problem. She was fired later the same day, reportedly on the grounds of “being rude to a customer”, after rejecting instructions from her manager that such incidents should be reported to the store management rather than directly to the police.

Don’t Rant On Social Media

When it comes to social media, Walmart gently reminds it’s employees to be mindful of the company’s confidentiality policy, which clearly states that any posts which negatively affect job performance or other employees are not acceptable. Any social media posts considered to be unprofessional, insulting, or embarrassing will get you fired.

Read Also: Will My Dental Insurance Cover Veneers

Talking To Lots Of People At Walmart Every Day Is Great For Your Resume

If you look for it, you can find a lesson and positive takeaways from just about any job. As a customer-facing Walmart worker, one of those lessons is customer relations a skill that can help boost a Walmart employee’s resume for many other types of jobs once they decide it’s time to move on.

On Quora, Walmart employee Marianne Davis listed the resume benefit of customer service as one of the main plusses to working at the company. As Davis put it, “customer service is something that you’ll use at pretty much any job you’ll find advertised.” Another employee on Reddit’s r/Jobs found the retail experience beneficial to their resume, and they said that the customer interaction part of the job “helped me with my public speaking skills because of how many people a day you are forced to interact with.”

So while there are plenty of workers and former employees who list Walmart as just “a job,” there’s a silver lining to how the type of work can set you up for the future depending on how you look at it.

How Do You Know If You Have One Of These Policies Out On Your Life

FACT CHECK: Dead Peasant Insurance

1. Youll be notified in writing that your employer is considering taking out a policy and for how much.

2. Youll be asked to give your consent to be covered during and even possibly after your employment.

3. Youll be told in writing if your company will be a partial or sole beneficiary of accrued death benefts.

4. has a list of companies that reportedly buy these policies on some of their employees.

Recommended Reading: American Income Life Ripoff Report

Allegations Of Predatory Pricing And Supplier Issues

Walmart has been accused of selling merchandise at such low costs that competitors have tried to sue it for predatory pricing . In 1995, in the case of Walmart Stores, Inc. v. American Drugs, Inc., pharmacy retailer American Drugs accused Walmart of selling items at too low a cost for the purpose of injuring competitors and destroying competition. The Supreme Court of Arkansas ruled in favor of Walmart saying that its pricing, including the use of loss leaders, was not predatory pricing. In 2000, the Wisconsin Department of Agriculture, Trade, and Consumer Protection accused Walmart of selling butter, milk, laundry detergent, and other staple goods at low cost, with the intention of forcing competitors out of business and gaining a monopoly in local markets. The case was settled out of court. Crest Foods filed a similar lawsuit in Oklahoma, accusing Walmart of predatory pricing on several of its products, in an effort to drive Crest Foods’s own company-owned store in Edmond, Oklahoma out of business.

Get Ready To Clean Up Super

One former employee described the mess he had to deal with after an elderly lady destroyed a massive cereal box display. “In comes an older lady, driving one of the electric carts,” the ex-sales associate wrote. “She’s looking dead on at the display and promptly rams into the thing. Boxes go everywhere. She starts apologizing over and over and explains that she’s legally blind.”

You May Like: Aspen Dental Securedent Cost

How Did It Get The Name Dead Peasant Insurance

I actually found a great explanation of the origin of the term over at

Winn Dixie Stores bought life insurance policies on approximately 36,000 of its employees, without their knowledge or consent, and named itself as the policies beneficiary. The insurance brokerage firm that placed the policies prepared two memos describing the deceased employees as Dead Peasants. These memos were part of the courts record in a lawsuit in which the United States Court of Appeals for the Eleventh Circuit held that Winn-Dixies policies were a sham transaction for federal income tax purposes.

Guess what Wal-Mart did that got them in trouble?

They bought life insurance on their employees for the benefit of the company without letting the employees know they had done it.

How did the employees eventually find out it was happening?

Well, supposedly a man who worked for Wal-Mart passed away. He had never purchased life insurance personally but his spouse gets a rather large check in the mail from a life insurance company with Wal-Mart as the payee.


You can guess that she wasnt very happy to turn that check over to Wal-Mart.

At any rate, this was sort of the spark that started the class action suit against the company. It was actually discovered that Wal-Mart was buying life insurance on ALL of its employees without their knowledge.

Heres a bit from the initial court case itself that will help to clarify what was happening:

Welcome To The Consumerist Archives

Walmart Employee Benefits, 401k,Associate Stock,Health,My Personal Strategy

Thanks for visiting As of October 2017, Consumerist is no longer producing new content, but feel free to browse through our archives. Here you can find 12 years worth of articles on everything from how to avoid dodgy scams to writing an effective complaint letter. Check out some of our greatest hits below, explore the categories listed on the left-hand side of the page, or head to for ratings, reviews, and consumer news.

Recommended Reading: How To Get Life Insurance License In Florida

Don’t Call The Team After Hours

Like most other corporates, Walmart depends on keeping its running costs low to maximize profits. This is why no employees are allowed to do any work off the clock – because the company might have to reimburse them. And if you’re a manager, clocking extra time also includes contacting your staff after hours.

The ‘dead Peasant Insurance’ Controversy

In the 1990s, some companies began insuring their employee base indiscriminately, rarely getting the employees’ permission to do so. That practice drew criticism for allowing companies to profit from the death of ordinary employees, whose families received nothing. Then, in 2006, Congress and the Internal Revenue Service placed limitations on how companies could administer COLI and BOLI policies. For example, Congress limited COLIs tax advantages to policies taken out on the company’s highest-paid 35% of employees. Among other key changes:

  • Companies must now inform employees when they want to take out policies to insure them.
  • Insured employees must agree to the arrangement in writing.
  • Employers must also get written consent from the employee if they want to continue the policy after the employee leaves the company.

You May Like: Does A Parking Ticket Affect Insurance

Iii Equitable Remedies Under Erisa

ERISA’s civil enforcement provision, lists six types of actions that may be pursued for violations of the statute. One provision allows a beneficiary to bring an action for equitable relief and for redress of violations. This provision allows a beneficiary to seek equitable remedies for breach of fiduciary duty in his individual capacity. Recovery under this provision is limited to equitable remedies such as injunctive relief or restitution it does not extend to compensatory damages.

Massachusetts Mutual Life Ins. Co. v. Russell,473 U.S. 134 .

Varity Corp. v. Howe,516 U.S. 489, 510-13, 515 .

Mertens v. Hewitt Associates,508 U.S. 248, 257-58 see also Kerr v. Charles F. Vatterott Co.,184 F.3d 938 .

Restitution can be equitable or compensatory the distinction lies in the purpose of the relief sought. Restitution seeks to punish the wrongdoer by taking his ill-gotten gains. On the other hand compensatory damages seek to recover the monetary value of the harm done to a plaintiff. In some circumstances prejudgment interest is allowed as an equitable remedy under ERISA, because it prevents unjust enrichment.

Id. citing 1 Dan B. Dobbs, Law of Remedies § 4.1, at 369-71 .

Id. at 945-46.

Is Your Employer Using Dead Peasant Insurance

Does Walmart Take Out Life Insurance On Employees

Itâs very unlikely youâre insured under a COLI policy without knowing it. After media attention and publicized lawsuits exposed employers that used dead peasant insurance, the 2006 Pension Protection Act put new regulations on corporate-owned policies.

Today, if your employer wants to get life insurance coverage for you and name themselves as the beneficiary, they must follow these guidelines:

  • You must be notified and give written consent

  • COLI can only be taken out on the top 35 percent of highest-paid employees

  • Your employer cannot punish you for rejecting the plan

Corporate-owned life insurance is not illegal as long as an employer follows these guidelines. If youâre not sure if you agreed to a corporate-owned policy before, check with your HR department or benefits manager â theyâre required to let you know.

If youâre a business owner, you may need a company-owned policy in addition to a personal policy for your loved ones. An independent insurance broker can help you find the right combination of life insurance to protect your family and your business.

Recommended Reading: How To Obtain A Life Insurance License

Some Employees Have To Sleep In The Store

In 2004, Walmart came under heavy fire when The New York Times reported that they had uncovered various cases where employees had been prevented from leaving a store when they were sick or injured. They also reported that some employees were forced to stay overnight in stores located in high crime areas.

A Fiduciary Duties Of Loyalty And Of Care

Under ERISA a person is a fiduciary with respect to a plan if he has any discretionary authority or discretionary responsibility in the administration of such plan. ERISA also gives certain responsibilities to a fiduciary, which are outlined below.

29 U.S.C. § 1132.

ERISA imposes a statutory duty of loyalty. The duty of loyalty requires that a fiduciary discharge its duties for the exclusive purpose of providing benefits and paying expenses. ERISA also imposes a statutory duty of care. The duty of care requires a fiduciary to discharge its duties “with the care, skill, and diligence that a prudent man would use.”

29 U.S.C. § 1104.

The duty of loyalty includes the “obligation to deal fairly and honestly with all plan members.” The duty is breached when a plan administrator participates “knowingly and significantly in deceiving a plan’s beneficiaries in order to save the employer money at the beneficiaries’ expense.”

29 U.S.C. § 1104 Berlin v. Michigan Bell Telephone Co.,858 F.2d 1154, 1162 Morse v. Stanley,732 F.2d 1139, 1145 .

Firestone,489 U.S. at 110 see also Bixler v. Central Pa. Teamsters Health Welfare Fund,12 F.3d 1292, 1299 ).

Massachusetts Mut. Life Ins. Co. v. Russell,473 U.S. 134, 152-53 .

Drennan v. Gen. Motors Corp.,977 F.2d 246, 251 .

Harte v. Bethlehem Steel Corp.,214 F.3d 446, 452 , cert. denied,531 U.S. 1037 .

Eddy v. Colonial Life Ins. Co. of America,919 F.2d 747, 750 .

Restatement of Trusts § 173 .

Eddy,919 F.2d at 750.

29 U.S.C. §§ 1001 and .

Read Also: Can You Write Off Disability Insurance Premiums

Do I Need Additional Optional Life Insurance

You work hard every day to provide for your family. The last thing you want is to leave them in dire financial straits. Optional life insurance can offer additional financial protection. All eligible, full-time and hourly associates can purchase optional life insurance with coverage up to $200,000. Management can purchase additional coverage up to $1 million. Additionally, if a spouse, partner or dependent were to pass away, optional dependent life insurance is available for up to $200,000 for spouses and $20,000 for dependent children.

Walmart Associates Have The Potential For Bonuses

Day in my life: WALMART EMPLOYEE

Everybody loves a bonus. In response to the question “What are the best aspects of working at Walmart?” on Quora, many sales associates chimed in that the potential for quarterly bonuses is among the best parts of the job.

An employee named Matt Williams noted that, while “there really aren’t any aspects of working at Walmart that I would personally describe as ‘great,'” workers get a bonus every three months if the store did well that financial quarter. It’s a big “if” however, and the bonus is not always guaranteed, especially if the store didn’t do well. A former employee named David Pedraza posted about his experience on Quora, stating the bonuses ranged from “really low” to up to $400.

Workers have to stick around for a bit if they want to try and earn a bonus. To be eligible, a worker has to complete the training program, which is called Pathways. Pathways used to take six months, but as of 2017, CNBC reports that it takes around 90 days to complete training, while one worker on Reddit mentioned it only took about two months.

Don’t Miss: How To Obtain A Life Insurance License

Why Are Businesses Purchasing Life Insurance On Their Employees

You probably wouldnt be surprised to learn that your spouse was covered by a group life insurance policy at work. But would you be surprised to learn that the company is the beneficiary when your spouse dies?

This is not nearly as uncommon as you might think.

This practice even has a rather horrifying name: dead peasant insurance. The name is a throwback to a time in Russia when the rich treated peasants as property that they bought, sold and insured.

Allegations Of Bribery And Coverup In Mexico

In 2012, The New York Times reported that Walmart had been made aware eight years earlier that executives of , its subsidiary in that country, had paid millions of dollars in bribes to local officials to expedite permits for construction and operation of its many stores in that country. The company had opened many stores in Mexico in the late 1990s and early 2000s, attempting to widely establish itself before competitors could. Sergio Cicero, a lawyer who had been responsible for obtaining those permits and was bitter about being passed over for the position of general counsel with Walmart México provided the company’s corporate general counsel’s office with evidence showing that the company had made large payments to gestores, workers who deal with bureaucracies on behalf of citizens and businesses, with coded indications that the money was being passed on to officials to expedite permits.

In December 2011, several months before the story broke, Walmart announced it had begun an internal review of its FCPA compliance procedures. It was unclear how the Justice Department might respond. While the FCPA’s five-year statute of limitations appeared to bar prosecution under that statute, falsified financial statements in the years since could be seen as obstruction of justice under the Sarbanes-Oxley Act, and acts taken to conceal the bribery investigation subsequent to 2007 could constitute conspiracy.

Read Also: How To Get A Life Insurance License

What Is Corporate Ownership Of Life Insurance

Corporate ownership of life insurance , or corporate-owned life insurance, refers to insurance policies taken out by companies on their employees, typically senior-level executives. The company is responsible for making the premium payments, and if the person dies, the company, not the insured person’s family or other heirs, receives the death benefit. Such policies came to be called “dead peasant insurance” after some companies purchased life insurance on low-level workers without their knowledge.

More articles

Popular Articles