Compliance June 29, 2006

Kmart Settles Company Stock Lawsuit

June 29, 2006 (PLANSPONSOR.com) - A US District Judge has approved an $11.75 million settlement of a lawsuit against Kmart Corp.
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The Associated Press reports that about 125,000 employees and retirees of the former Kmart Corp. will share in the settlement.

The lawsuit claimed former company executives acted improperly when they invested pension money in company stock after the company filed for Chapter 11 bankruptcy, according to the AP.

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The settlement applies to those who participated in the Kmart pension plan from March 15, 1999, to March 6, 2003. A lawyer representing the employees said the allocation of the recovery to participants will be based on their individual holdings in the pension plan.

Kmart emerged from bankruptcy in 2003 and merged with Sears, Roebuck and Co. in 2005 to form Sears Holdings Corp.

Benefits June 28, 2006

Jury Awards $1.7M to Victim of 'Motivational' Spanking

June 28, 2006 (PLANSPONSOR.com) - A jury in Fresno, California awarded $1.7 million to an Alarm One Inc. employee who sued for sexual harassment and battery after several workplace spanking incidents.
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HR.BLR.com reports that Janet Orlando said she was spanked with a yard sign on three separate occasions in front of jeering coworkers.

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The spankings were part of motivational practices at the company’s Fresno office, HR.BLR.com said. The company would have sales teams compete with the winners poking fun at the losers, according to the news report. Tactics included throwing pies at the losers, feeding them baby food, making them wear diapers and spanking them with a competitor’s yard sign (See Workplace Spanking Victim Asks for $1.2M Jury Verdict ).

Orlando claimed that during the spankings, the sales force would heckle her with comments such as “Bend over, baby,” and “You’ve been a bad girl.”

The company said Orlando was a willing participant during the motivational meetings and never complained about being spanked, according to the news report. It also claimed Orlando abruptly quit her job, not because of the spankings, but because she was upset about being passed over for promotion.

The jury’s award includes $500,000 in compensatory damages and $1.2 million in punitive damages.

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