Labor Deal With Wal-Mart Criticized

By Amy Joyce
Washington Post Staff Writer
Tuesday, November 1, 2005

Wal-Mart Stores Inc. received "significant concessions" from the U.S. Department of Labor's Wage and Hour Division when the department and Wal-Mart signed a settlement agreement last year after the company was cited for child labor violations, according to a Department of Labor inspector general report released yesterday.

While the agreement did not violate laws, the inspector general's office found "serious breakdowns" in the department's "negotiating, developing and approving" such agreements.

The agreement between Wal-Mart and the Wage and Hour Division "was significantly different from other agreements," the report concluded. "Specifically, the Wal-Mart agreement had the most far-reaching restrictions on [the division's] authority to conduct investigations and assess [civil money penalties]."

Wal-Mart agreed in January 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.

Some lawmakers and child advocate groups called the agreement a sweetheart deal, particularly because it stated the company will receive 15 days' notice "of any audit or investigation at the stores covered by this agreement."

The report released yesterday said that the 15-day advance notice is "inconsistent" with the department's guidelines and that Wal-Mart could avoid penalties or a formal citation if it brings a facility into compliance within 10 days of a notice of violation. Labor officials in February said that Wal-Mart's advance notice would involve only child labor investigations and that it is standard practice in such cases. But the inspector general's office said the 10-day provision "was designed to allow Wal-Mart to avoid penalties if compliance is achieved."

The report also raised specific concerns about the agreement because "it contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by" the Department of Labor.

"The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws," Rep. George Miller (D-Calif.), the lawmaker who requested an investigation, said in a statement. He also said such an arrangement could allow the nation's largest employer to cover up evidence of a violation and would discourage employees who might fear retribution from filing a complaint.

"The inspector general's office did find that the agreement is in compliance with federal law. We continue to believe that the agreement was the appropriate course of action," said a company spokesman, reading from a statement.

The Department of Labor said it stands by the agreement.

"It's a strong agreement that has significantly advanced compliance on a nationwide basis with the federal child labor laws," a department spokeswoman said yesterday. The agreement produced positive response, she said, with Wal-Mart conducting quarterly meetings to monitor the agreement's implementation. The company also did more than 9,000 facility audits and updated training for workers and managers.

The inspector general's office recommended that the Wage and Hour Division create written procedures for negotiating, developing and approving agreements with employers. It also recommended that future agreements be developed in coordination with the Labor Department's Office of the Solicitor. The Wage and Hour Division created a new policy in June that satisfied any recommendations from the inspector general's office, according to the report.

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