WASHINGTON — Organized labor groups were among those criticizing a settlement between Wal-Mart and the U.S. Department of Labor involving child-labor violations at stores in Connecticut, New Hampshire and Arkansas.
The accord fined the retailer $135,540 and contained a provision giving Wal-Mart 15 days notice before the labor department investigates any accusation, including child labor, minimum wage and overtime violations.
“It’s terrible they got the 15-day warning,” said Bruce Raynor, president of the UNITE HERE union. “That means before they get investigated they will be allowed to clean it up.”
Wal-Mart, the world’s largest retailer, has been attacked by critics who, among other things, charge that the company depresses wages and provides inadequate employee benefits. It is also the target of a class-action gender discrimination case and a scandal involving a subcontractor accused of using illegal immigrants on cleaning crews. The retailer has embarked on a public relations campaign to refute the allegations.
“What we agreed to was to take a number of steps,” said a spokesman for Wal-Mart. “We didn’t admit any wrongdoing, but we did agree to strengthen our training and compliance programs to make sure we don’t have any violations that come up again.”
Robert Reich, who was secretary of labor under President Bill Clinton, said the penalty was small “given the extent of the violations” and characterized the 15-day notification provision as “odd.”
“Wal-Mart employs more people than the entire auto industry in the U.S.,” Reich said. “We’re not talking about the company down the street. Wal-Mart sets the standard and every other retailer in American competes directly or indirectly against Wal-Mart.’’
Rep. George Miller (D., Calif.), the senior Democrat on the House Education & Workforce Committee, called for the Labor Department’s Inspector General to investigate what he called a “sweetheart deal” between the Bush administration and “one of the nation’s most frequent violators of labor laws.”
Miller alleged that the agreement gives preferential treatment to a major Republican donor and said the 15-day warning could allow Wal-Mart to “cover up evidence of a violation.”
Wal-Mart contributed more than $2 million to Republicans and in excess of $500,000 to Democrats in 2004.
Assistant Labor Secretary Victoria Lipnic said the labor department did not “give any breaks” to Wal-Mart.
“The average child-labor violation [fine] in fiscal year 2004 was about $4,300 and the average violation [penalty] in the Wal-Mart case was $5,600,” Lipnic said Monday.
Lipnic said the 15-day warning was “fairly typical” in settlements. She cited an accord the labor department reached with Sears, Roebuck & Co. in 1999 over child-labor violations that gave the company a 10-day warning notice.
“Part of what everybody is missing here is this settlement agreement in no way waives the authority of [the wage and hour division] to issue penalties if we find violations,” Lipnic said.
As for allegations of favoritism, Lipnic said: “That is absolutely not true. This is an effort to make sure Wal-Mart is in compliance with the law in the same way we want to make sure every other company is in compliance.”
Wal-Mart was cited for violations over a period of three-and-a-half years, according to a copy of the settlement agreement. The majority of the child-labor violations involved minors under the age of 18 using paper balers that crush cardboard boxes. Wal-Mart was also cited in two cases for allowing underage employees to use forklifts and, in one case, a minor used a chain saw to cut Christmas trees.
The government signed the settlement agreement with Wal-Mart on Jan. 11, but did not make a public announcement about it until the pact was revealed Saturday by the New York Times.
Under the terms of the one-year agreement, Wal-Mart agreed to: not employ any worker under the age of 14; not require any worker under 18 to perform any job deemed “hazardous,” which includes operating forklifts and cardboard balers; designate a member of its corporate office to supervise compliance with the agreement; provide new store manager training on child-labor law compliance; continue to train current store managers on compliance, and monitor compliance with child-labor laws.