Connecticut Attorney General Richard Blumenthal said yesterday he will ask other states to join him in investigating allegations that Wal-Mart Stores Inc. broke child labor laws, calling a recent related settlement between the company and the Labor Department "a sweetheart deal."
Wal-Mart agreed last month to pay a federal fine of $135,540 for child labor violations in which 85 minors operated hazardous equipment at stores in Connecticut, New Hampshire and Arkansas. The investigations into violations occurred from October 1998 through April 2002. The agreement was signed Jan. 11 and announced Monday.
It states that the company will receive 15 days' notice "of any audit or investigation at the stores covered by this agreement."
"We believe there clearly needs to be a state investigation in Connecticut. These violations of law also would clearly break our state child labor protections and could well involve separate penalties and administrative or court orders," said Blumenthal, who said he was surprised by the investigation's findings. "The federal deal seems very much like a sweetheart deal. It involves a pittance of a penalty. It involves a notice provision that gives Wal-Mart an easy opportunity to sweep under the rug any future violations."
Rep. George Miller (D-Calif.), ranking member on the Committee on Education and the Workforce, requested a probe by the department's inspector general this week, saying the agreement gives Wal-Mart preferential treatment.
Gus Whitcomb, a Wal-Mart spokesman, said the company believes the agreement "resolves this issue."
"However, if the Connecticut attorney general wishes to conduct his own investigation, we'll cooperate," Whitcomb said.
Karen Dulaney Smith, a Labor Department wage and hour investigator until 1999, now consulting for corporations, said companies rarely had advance notice when she was an investigator. "It seems to me unfair to employers that Wal-Mart would get this kind of treatment. I don't like the idea of just saying we're not going to show up on your doorstep unannounced because you learn a lot about an organization that way."
Labor officials said in an interview that Wal-Mart's advance notice would involve only child labor investigations, and that it is standard practice in such cases. "We believe it's a more stringent agreement" than previous agreements in child labor cases, said Howard M. Radzely, the department's solicitor.
Labor "often" sends out letters notifying employers of an upcoming child labor investigation, as the agency needs to collect payroll records and be sure the managers are available when an investigation occurs, he said. "The purpose is to ensure that children are out of harm's way. Then we worry about the investigation or monetary paperwork."
The department provided copies of agreements with Sears, Roebuck and Co. and Foot Locker Worldwide filed after they were accused of child labor violations in 1999 and 2000, to show the Wal-Mart agreement is similar to others. The agreements stated Foot Locker and Sears would be informed 10 days before a Labor investigation, but only at stores scheduled for self-audits, in which the companies would list employees under 18, describe their duties and hours worked.
Federal law limits the activities that can be assigned to minors.
That advance notice was to allow the companies time to complete audits and share the results with Labor before an investigation began, said John Fraser, a top department official during the first Bush and Clinton administrations.
There is no self-audit in the Wal-Mart agreement. Radzely said the Department of Labor will investigate.
Fraser said in the late 1990s the department began to try to forge partnerships with companies to encourage them to comply with labor laws. Now, Fraser said, "the effort to promote corporate activities to achieve and maintain compliance has gotten so diluted that the department giveth and the company doesn't. At least that's what this Wal-Mart agreement looks like."