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News and Commentary on Workplace Health & Safety, Labor and Politics

Saturday, February 12, 2005


Bush Labor Department Puts Wal-Mart in "Privileged Position"

True to form, the Bush administration is making sure that its corporate friends are not too inconvenienced on those rare occasions when they are found to be breaking federal laws, especially if it only involves child labor issues.

Wal-Mart, the world's largest retailer agreed to pay $135,540 to settle federal charges that it violated child labor laws in Connecticut, Arkansas and New Hampshire. As part of the agreement, revealed yesterday after it was secretly signed in January, the Labor Department agreed "to give Wal-Mart 15 days' notice before the Labor Department investigates any other 'wage and hour' accusations, like failure to pay minimum wage or overtime."

The violations involved workers under age 18 operating dangerous machinery, including cardboard balers and chain saws. In the agreement, Wal-Mart denied any wrongdoing, although the company agreed to pay the fine.

The agreement left Congressman George Miller (D-CA) rather angry:
"I don't know if the Department of Labor threw in the towel or whether Wal-Mart put enough political pressure on them that they ended up with a sweetheart deal," Miller said, adding that he will ask the department's inspector general this week to review the agreement.

"I don't know if there's anything in Wal-Mart's background with regards to allegations of violations of labor laws that would make any suggestion Wal-Mart has earned the right for this kind of treatment," Miller said.
A veteran DOL inspector was also rather perplexed.

"With child labor cases involving the use of hazardous machinery, why give 15 days' notice before we can do an investigation?" asked a district office supervisor who has worked in the wage and hour division for nearly 20 years.

"What's the rationale?"

Good question. Something to do with loyalty, perhaps.

Labor Department officials claim there's nothing unusal about this arrangement, but officials from previous administrations think it stinks.

Victoria Lipnic, assistant labor secretary for employment standards, called the settlement typical, saying that giving Wal-Mart notice before conducting investigations would encourage the company to correct the problems sooner.

***

Several department officials suggested that the provision for 15 days' notice might give Wal-Mart an opportunity to hide violations.

John R. Fraser, the government's top wage official under the first President Bush and President Bill Clinton, said the advance-notice provision was unusually expansive.

"Giving the company 15 days' notice of any investigation is very unusual," Mr. Fraser said. "The language appears to go beyond child labor allegations and cover all wage and hour allegations. It appears to put Wal-Mart in a privileged position that to my knowledge no other employer has."

Ms. Lipnic countered,"We usually call employers before we go to investigate," and said there was "nothing uncommon or unprecedented about that."

No, well, maybe not in this administration.
Several federal employees voiced concern about a Jan. 10 e-mail message sent by the director of the Little Rock, Ark., office for the Labor Department's wage and hour division after the settlement was reached, that said, "Wage & Hour will not open an investigation of Wal-Mart without first notifying Wal-Mart's main office and allowing them an opportunity to look at the alleged violations and, if valid, correct the problem."

The Occupational Safety and Health Act prohibits inspectors from warning employers about planned inspections, but no such provisions exist in many other labor laws.

A Wal-Mart spokesman claimed that "our focus is to be 100 percent compliant with all applicable laws."

Yeah, right:

Wal-Mart has faced previous child labor charges. In March 2000, Maine fined the company $205,650 for violations of child labor laws in every one of the 20 stores in the state. In January 2004, a weeklong internal audit of 128 stores found 1,371 instances in which minors apparently worked too late at night, worked during school hours or worked too many hours in a day. Company officials said the audit was faulty and had incorrectly found that some youths had worked on school days when, in fact, those days were holidays.
Oh, and then there's the little matter of locking their workers in the stores all night and not paying them for the time they were imprisoned.

Is this an example of those Republican values we hear so much about?

UPDATE: Nathan Newman has a copy of the copy of the sweetheart deal negotiated by Wal-Mart with the DOL as sent out in email to district DOL offices, as well as some further insights into this deal.




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