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Wal-Mart to Pay $11 Million

Chain Settles Illegal-Worker Investigation

By Michael Barbaro
Washington Post Staff Writer
Saturday, March 19, 2005; Page E01

Wal-Mart Stores Inc., the nation's largest retailer, agreed to pay $11 million to settle a federal investigation that found hundreds of illegal immigrants were hired to clean its stores, government and company officials said yesterday.

U.S. officials described the settlement's dollar figure as the largest of its kind. But Wal-Mart admitted no wrongdoing in the case, saying it was unaware contractors were employing illegal immigrants.

Michael J. Garcia, assistant homeland security secretary, called the settlement with Wal-Mart a "milestone for corporate responsibility." (Haraz Ghanbari -- Assocaited Press)

Wal-Mart Discussing Settlement (The Washington Post, Sep 4, 2004)
Wal-Mart's Damage Control (The Washington Post, Jan 24, 2004)
Wal-Mart Confirms Probe of Hiring (The Washington Post, Nov 5, 2003)
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Wal-Mart Press Release
Company Info/Stock Quote

The settlement prompted an outcry from some labor experts, who said $11 million is insignificant to a company with $285 billion in sales, and is unlikely to deter other corporations from employing illegal workers.

The case, which grew out of a hit-and-run accident in small-town Pennsylvania, has thrown a spotlight on the role of subcontracted janitors, who are used by many of the nation's largest corporations. The government made every effort to dramatize the situation yesterday, bringing the police chief who stumbled upon the illegal immigrants and an array of state and federal law enforcement officials who worked on the case to a press conference at the US. Immigration and Customs Enforcement office.

Authorities said that between 1998 and 2003, an estimated 345 illegal immigrants worked as contract janitors in Wal-Mart stores but that the chain's management was unaware of the problem. The Bentonville, Ark.-based discounter has ended the practice of hiring outside cleaning crews.

"We acknowledge that we should have had better safeguards in place to ensure our contractors were hiring only legal workers," said Mona Williams, a Wal-Mart spokeswoman. "That's why we are agreeing to pay the $11 million."

As part of the federal investigation, 12 businesses that provided contract janitor services to Wal-Mart will pay an additional $4 million in fines and plead guilty to criminal immigration charges, officials said. Wal-Mart's $11 million payment will be spent on federal programs to enforce immigration law.

"This is a milestone for corporate responsibility," said Michael J. Garcia, assistant secretary for immigration and customs enforcement at the U.S. Department of Homeland Security."

Wal-Mart yesterday said it has adopted wide-ranging changes to prevent the future use of illegal workers. It requires executives to approve all store-level labor contracts over $10,000 and train managers to comply with labor law.

Even with the federal probe behind it, the chain still faces a class-action lawsuit filed on behalf of undocumented contract workers who say they were underpaid while working for the chain. The case was filed in November 2003 in a U.S. District Court in New Jersey.

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