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Wal-Mart to Pay $11 Million

The federal investigation into Wal-Mart labor practices began with a hit-and-run car accident in Pennsylvania.

A license plate left at the scene of the crime was traced back to the owner of an apartment building where authorities found illegal immigrants who cleaned Wal-Mart stores, said Thomas Frisk, chief of police for Honesdale, a town in northeast Pennsylvania with a population of 5,000.


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

_____Background_____
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)
_____On the Web_____
Wal-Mart Press Release
Company Info/Stock Quote

Local police reported their findings to immigration officials, who in 2001 arrested 100 illegal immigrants who cleaned Wal-Mart stores in Pennsylvania, New York, Ohio and Missouri.

A second investigation culminated in a series of dramatic pre-dawn raids on Oct. 23, 2003, during which agents descended on 61 Wal-Mart store in 21 states. The raids included eight stores in Virginia -- in Sterling, Culpeper, Richmond, Winchester, Harrisonburg, Lynchburg, Lexington and Madison Heights -- and two in Maryland, in Catonsville and Mount Airy. Law enforcement officials called it Operation Rollback, a play on Wal-Mart's shorthand for lowering prices.

After the arrests, Wal-Mart approached the government and offered to cooperate with the investigation, federal officials said.

Williams, the Wal-Mart spokeswoman, said the $11 million payment "is a lot of money, but I think that's because it is designed to get attention -- and remind businesses everywhere that they have a duty to ensure their outside contractors are following federal immigration laws."

But several labor experts said the settlement appeared to be low. "For a company of this size, this is really no significant deterrent," said Robert Bruno, a professor of labor and industrial relations at the University of Illinois.

Beth Shulman, a former union leader and author of "The Betrayal of Work," called the dollar figure a "drop in the bucket," adding, "There needs to be a clear message that treating immigrants the way Wal-Mart did is unacceptable. I don't think this sent that message."

Government officials declined to say how they came up with the $11 million payment.

Federal authorities have so far deported 119 of the illegal immigrants rounded up in the 2003 raids, Garcia said.

Wal-Mart, which employs 1.3 million people in the United States, faces several lawsuits alleging sex discrimination and wage violations, and last month the company launched a wide-ranging campaign to repair its image.

Wal-Mart took out dozens of newspaper advertisement accusing "special-interest groups" of spreading "misinformation" and "half-truths" about the retailer. As part of its public relations offensive, Wal-Mart is emphasizing its contributions to the U.S. economy and its record of charitable giving.

But analysts said the settlement announced yesterday will bring more unwelcome attention.

"This gives a lot of ammunition to critics," said Adam Hanft, chief executive of Hanft Unlimited Inc., a consulting and branding company.

The chain's use of illegal immigrants "makes them seem like a financial company purely driven by numbers verses a neighborhood company that cares about the community."


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