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Bush's Valentine to Wal-Mart: A Sweetheart Deal with its Department of Labor
Progressive Populist
by Nathan Newman
March 15, 2005

Just when you think the Bush administration's corrupt dealing with corporate America can't go any lower, they achieve the seemingly impossible and surprise you. Not content to just slap Wal-Mart on the wrist with a tiny $135,540 fine for violating child labor laws (a fine equivalent to about 15 seconds of sales for the company), the Bush Department of Labor (DOL) entered into an unprecedented sweetheart deal with the giant retailer to essentially exempt it from ever having to pay government fines for wage violations again.

The Sweetheart Deal: Here are the key provisions:

1) All local DOL investigations of Wal-Mart will be put on hold, and any wage complaints by workers will be sent to the Little Rock DOL office.

2) That Little Rock DOL office will then turn over the complaints to Wal-Mart corporate headquarters without further investigation.

3) Wal-Mart will then have fifteen days to "fix" the problem.

4) If DOL then goes in and still finds a labor violation, Wal-Mart will still have ten days to pay any wages owed and avoid any financial penalty.

5) Oh yeah, one last fun provision. The deal was initially kept secret and Wal-Mart retained the right to okay how the DOL talked about the agreement to the press. How Hollywood of Wal-Mart to retain creative control on Bush's press operations.

The bottom line is that no corporation has ever been given this kind of comprehensive "get out of jail free card" by the Department of Labor. Wal-Mart will have every incentive to violate the law recklessly. Even if they are caught underpaying a few employees, they can simply pay back the wages owed with no fine, while pocketing the profit from underpaying the many workers who will inevitably never challenge the employer's illegal activity. But then that's the point of this kind of "notice" provision; it guts wage laws and discourages enforcement.

A Recipe for Retaliation: And think about what it means for employees to know that complaints they make to the federal government are being handed over to their bosses. Giving Wal-Mart information on employee complaints is a recipe for those employees to face retaliation. Even if they do not immediately get fired, you know they will go on a corporate internal blacklist. There is no instruction anywhere in the agreement or in DOL communication with their staff even to try to insure the confidentiality of the employees who might make a complaint to the government.

And we know Wal-Mart believes in retaliation. In Canada, workers at a Wal-Mart store in Quebec decided to form a union. Rather than bargain with the workers, Wal-Mart announced in early February that they preferred to shut the store completely -- sending a chilling message to any other workers who might try to form a union.

The Quebec government is threatening to bring charges under Canadian labor law, which actually has some teeth. Unfortunately, American workers are dependent on a Bush Department of Labor that is working hand-in-glove with Wal-Mart, one of the administration's largest corporate donors in the last election cycle.

Luckily, some Democrats on Capitol Hill are demanding an investigation into how this kind of slimy deal got signed in the first place. Congressman George Miller, ranking Democrat on the House Committee on Education and the Workforce, had this to say about the Wal-Mart deal:

"This is a company that has been accused of a lengthy list of labor violations. Wal-Mart does not have the credibility to serve as an impartial investigator of accusations of labor violations against itself ... Once again, it looks like the Bush Administration is doing a favor for a powerful friend and contributor at the expense of workers who do their jobs and still cannot get fair treatment in the workplace."

Evil Minds Think Alike: Unfortunately, the Bush approach to gutting labor laws is spreading. Last fall, Florida voters overwhelmingly (72%) approved a constitutional amendment increasing the minimum wage by a buck and mandating that any employers breaking the law pay double damages plus legal fees when they violate the law. Now the Florida GOP state House leaders want to let violators of the law escape those double damages if they give the money back within 15 days of being notified by employees of the intent to sue.

It's a bit like a law on robbery that lets criminals off if they promise to give back the money if they ever get caught. We know that this would make a mockery of the law and theft would explode.

But discouraging enforcement of wage laws is the point of the Wal-Mart agreement and the law proposed by the Florida GOP. These rightwing politicians hate working class people and support corporate criminality. They are soft on crime when the criminals wear a nice three-piece suit.

Nathan Newman is a longtime union and community activist and author of Net Loss (Penn State Press) on inequality in the Internet economy. Email or see

Posted by Nathan at March 15, 2005 09:59 PM