Inspector General to Investigate Labor Department's Handling of Wal-Mart

Less than a week after the U.S. Department of Labor announced it had fined Wal-Mart $135,540 for child labor law violations and agreed to provide the retailer 15 days' written notice before further inspections, the inspector general of the Labor Department said it would look into the agreement that critics are calling a "sweetheart deal."

The settlement requires the Department of Labor's Wage and Hour Division to provide 15 days' notice, via certified mail, to Wal-Mart's headquarters in Bentonville, Ark., prior to inspecting any Wal-Mart stores. It also requires the agency to provide, via certified mail, written notice of violations and then allow the retailer a 10-day abatement period.

While Department of Labor officials reportedly have said the agreement is similar to other deals with major corporations, Rep. George Miller of California, the senior Democrat on the House Education and the Workforce Committee, believes the advance notice would give Wal-Mart stores ample time to hide any evidence of child labor violations and would discourage whistleblowers from filing complaints against Wal-Mart for fear of retribution from the retailer.

"This looks like a sweetheart deal that would help Wal-Mart's executives and hurt its workers," Miller said in a statement.

Wal-Mart spokesperson Gus Whitcomb, in a statement, praised the "collaborative working environment with the Department of Labor" and added that the relationship with the agency "should strengthen compliance because we are working together to enhance our training and policies."

Labor Department failed to mention 15-day provision

Wal-Mart, which is the world's largest retailer, violated the Fair Labor Standards Act by allowing 16- and 17-year-old employees in Connecticut, Arkansas and New Hampshire stores to operate heavy machinery such as scrap paper balers and fork lifts, according to the Department of Labor. Under the terms of the compliance agreement, however, Wal-Mart is not required to admit any wrongdoing, and Wal-Mart has denied the Labor Department's allegations.

The compliance agreement also stipulated the Department of Labor and Wal-Mart "will develop the terms of any joint or separate statement(s) issued by either party announcing this agreement to the media and/or the public." "This would essentially give Wal-Mart veto power over the nature of and timing of the public announcement," Miller asserts on his Web site.

Miller accuses the retailer and the Department of Labor of brokering a "secret arrangement" and then waiting a month before making it public. "The agreement, reached on Jan. 6, only became public because of a reporter's query to the department," Miller contends.

The Department of Labor issued a news release announcing the settlement on Feb. 14. In the release, the department notes Wal-Mart, as part of the compliance agreement, must provide training on child labor laws to store managers and post warning signs indicating age restrictions on all company-owned hazardous equipment, but the release fails to mention the 15-day advance notice provision.

Miller: Wal-Mart getting special treatment

Miller, who called for the inspector general's investigation on Feb. 14, has blasted the compliance agreement as a "favor for a powerful friend and contributor" of the Bush administration "at the expense of workers who do their jobs and still cannot get fair treatment in the workplace."

"It is unacceptable that the Department of Labor would choose to bestow special privileges on Wal-Mart, one of the nation's most notorious violators of labor laws and minimum labor standards," Miller said, applauding the inspector general's "prompt response" to his request for a review of the agreement.

Miller, on his Web site, says the $135,540 fine equals 15 seconds' worth of Wal-Mart retail sales in 2004. The company boasts of $256.3 billion in retail sales in the fiscal year ending Jan. 31, 2004.

Likewise, Jonathan Tasini, president of Economic Future Group, a strategy and consulting firm for union and political campaigns, said the fine is a "pittance" and hardly enough to deter the retail giant from violating labor laws in the future. For large companies such as Wal-Mart, Tasini advocates larger fines and jail time for top executives.

"If the CEO of Wal-Mart had to sit in jail for these violations, I guarantee tomorrow those violations would end," Tasini said.

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