When Wal-Mart Wants Its Money Back

Update: Wal-Mart has dropped its effort to recover the money it spent on Debbie Shank's medical care.

You be the judge. A shelf stocker who's employed by the world's largest retailer is seriously injured in a car accident. The company—yes, it's Wal-Mart—dutifully pays out $470,000 in medical costs. The employee then wins about $700,000—or $417,000 after attorney fees and other expenses—in a lawsuit. The employer sues for the cash to recover its costs. The court sides with the employer. Is it fair?

Over at the Huffington Post, Joseph Palermo doesn't like it one bit (note: I have omitted the last sentence of this excerpt because of a four-letter flourish not suitable for usnews.com):

The behemoth corporation that made $11 billion in profits last year claimed the Shanks owed it the money because of a fine-print clause in her employee health benefits package that stipulates that Wal-Mart would recoup all medical costs if any court settlement had been reached. A Republican judge ruled in favor of Wal-Mart and the U.S. Supreme Court refused to hear the case. The ruling will completely clean out (and then some) the trust that was set aside for Debbie Shank's long-term care. Wal-Mart issued a terse statement worthy of an Adolf Eichmann defending their actions saying the corporation was only following "very specific rules."

And any person with a soul could understand what Shank's husband told CNN:

"Who needs the money more? A disabled lady in a wheelchair with no future, whatsoever, or does Wal-Mart need $90 billion, plus $200,000?" he asked.

But the Shanks' lawyer explains here that Wal-Mart is within its legal rights:

The basis of that was the insurance contract they have with their employees, which stipulates that they can recover all medical expenses that they incur if the employee wins a liability suit, as well as federal law that allows them to get that money back. This kind of provision was unusual years ago, but it's becoming more prevalent; many companies have those provisions in their insurance contracts now.

About.com blogger Amanda Galiano notes Wal-Mart's argument that this policy allows it to keep healthcare costs down, as well as the critics' argument that "while they may be in the legal right, they are in the moral wrong."

What's your judgment?