Tuesday, February 15, 2005

Miller Calls For Investigation of Wal-Mart Deal

Congressman George Miller (D-CA) has called for an investigation by the Department of Labor's Inspector General into a deal struck between Wal-Mart and DOL, looking into why the settlement was kept secret for five weeks and why the department agreed to give Wal-Mart 15 days' notice before conducting wage-and-hour investigations in many cases.

Miller said he feared

that such an arrangement could allow the giant employer to cover up evidence of a violation and would discourage aggrieved employees who might fear retribution from the company. Miller also sent a letter to Labor Secretary Elaine Chao today asking for more information about the arrangement.

“I am very concerned about this secret arrangement between Wal-Mart and the Bush Administration,” said Miller, the senior Democrat on the House Education and the Workforce Committee. “This is a company that has been accused of a lengthy list of labor violations. Wal-Mart does not have the credibility to serve as an impartial investigator of accusations of labor violations against itself. I intend to find out how this arrangement was reached and, if appropriate, I will consider asking Congress to rescind the agreement if it cannot be justified.

“Once again, it looks like the Bush Administration is doing a favor for a powerful friend and contributor at the expense of workers who do their jobs and still cannot get fair treatment in the workplace.”
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. Wal-Mart donated $2.1 million to candidates and campaigns in last year's election, 80% of which went to Republicans.

In a letter to DOL Secretary Elaine Chao, Miller wrote:

It is astonishing that the Department of Labor, on the heals of finding that Wal-Mart was engaged in serious violations of child labor laws -- even as Wal-Mart refused to publicly admit -- should reward the company with a sweetheart regulatory deal that allows Wal-Mart's top officials a preview of complaints before they are investigated. Keeping the "compliance agreement" a secret until a newspaper broke the story, long after the agreement had been implemented is a breach of trust with Wal-Mart employees and the nation's workers -- the very people your department is charged with protecting.
Meanwhile, the Wall St. Journal (subscription required) provides more background about the difference between the way this administration treats labor code violators, and the way past administrations have operated:

In the recent case of alleged child labor violations, the Labor Department says that giving an employer prior notice of an investigation isn't unusual. "Generally, if we get a complaint, we contact an employer and tell them we are coming to do an investigation," said Victoria Lipnic, assistant secretary of labor for employment standards. "This expedites the process. Instead of contacting them, scheduling an appointment to see if there is a problem, we're saying 'there's a problem, fix it.' "

Ms. Lipnic said the Labor Department signed a similar agreement in 1999 with Sears, Roebuck Inc., now a unit of Kmart Corp., related to child labor violations that gave the retailer 10 days prior notice.

John Frasier, [who retired in 2001 as deputy administrator of the department's wage-and-hour division], however, says his department, as a matter of convenience, might notify an employer that an investigation was going to be conducted. "But this settlement says the department has an obligation to do so," he says. "We wouldn't tell a company that there has been an allegation of a violation, because once you've done that you've compromised the privacy of the complainant."

As we enter the second Bush term, we're likely to see more and more of these sweetheart deals to reward the big backers of the Republican party. Democrats like Miller, who are willing to go after this type of behaviour need your support. Call your Congressional representatives and ask them to support Miller's investigation.

A PDF copy of Miller’s request for an Inspector General investigation can be found here.

A PDF copy of Miller’s report on Wal-Mart’s labor practices can be found here.

Related Stories:

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

Wal-Mart: Following In The Proud Footsteps of the Tobacco, Beer and Petroleum Industries

Wal-Mart Enters 19th Century: Locks Workers In Overnight

More at LaborBlog here and here.