In January the Department of Labor found 85 child labor violations at Wal-Mart stores in Connecticut, New Hampshire, and Arkansas alone, involving workers under 18 who operated dangerous machinery, including cardboard balers and chain saws. Wal-Mart stopped the investigation by agreeing to pay a $135,540 fine. Then, without its own lawyers, the Bush-staffed Labor Department worked with Walmart Lawyers to find a way to prevent future regulation of the top American profit-maker and Republican Party contributor.
Yesterday, the Labor Department’s Inspector General strongly criticized department officials for “serious breakdowns” in procedures involving this agreement promising Wal-Mart Stores 15 days’ notice before labor investigators would inspect its stores for child labor violations.
The report by the inspector general faulted department officials for making “significant concessions” to Wal-Mart, the nation’s largest retailer, without obtaining anything to protect workers in return. The report also criticized department officials for letting Wal-Mart lawyers write substantial parts of the settlement and for leaving the department’s own legal division out of the settlement process. The pact between WalMart and the Labor Department was intended to be kept secret from the public. The Labor Department took the unusual action of announcing the agreement a month after it was signed, doing so only after some details were leaked to a newspaper.
The Inspector General’s report said that in granting Wal-Mart the 15-day notice, the Wage and Hour Division violated its own handbook. It added that agreeing to let Wal-Mart jointly develop news releases about the settlement with the department violated Labor Department policies.
In addition to allowing the 15-day notice, the agreement lets Wal-Mart avoid civil citations and fines if it brings a store into compliance within 10 days of when the department notifies it of a violation.
In exchange for these favors, the inspector general wrote, there was “little commitment from the employer beyond what it was already doing.”
“In our view,” the inspector general’s office wrote about the Wage and Hour Division, “the Wal-Mart agreement may adversely impact W.H.D.’s authority to conduct future investigations and issue citations or penalty assessments, and potentially restrict information to the public.”
Responding to its inspector general, the Labor Department said it “strongly disagrees with the report’s overall characterization of the effectiveness of the Wal-Mart child labor settlement agreement.” Even though department officials tried to claim that the agreement was much like the pacts other companies’ lawyers have drafted for the Labor Department to sign, Inspector General Heddell found that the agreement between Wal-Mart and the Wage and Hour Division “was significantly different from other agreements entered into by W.H.D.” and “had the most far-reaching restriction on W.H.D.’s authority to conduct investigations and assess” fines.
Representative George Miller, the California Democrat who asked the inspector general to investigate the settlement, said the report showed that the Bush administration was seeking to do favors for a powerful friend and a major Republican contributor in Wal-Mart. “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,” Mr. Miller said. “The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf.”
Even though the sweetheart deal further decimates the Labor Department’s official function of protecting the public interest, Martin Heires, a Wal-Mart spokesman, said, “We think it’s important to note that the inspector general’s office found that the agreement is in compliance with federal law.”
The inspector general recommended that the Wage and Hour Division develop procedures for developing and approving agreements and require that all future settlements be developed in coordination with the Labor Department’s legal division.
The Labor Department said that the advance notification provisions applied only to child labor matters. But the inspector general voiced concern that “the plain language of the advance notification clause applies to any potential violations, not just child labor violations.”
The Inspector General’s report said: “The inspector general has specific concerns with the Wal-Mart agreement because it contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by W.H.D., and because it did not receive adequate W.H.D. review and approval.”