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February 16, 2005

Yes, Wal-Mart's Deal was Unique

Some folks have wondered whether Wal-Mart's deal was par for the course with the Bush administration's pro-corporate policies, or a really special treat for one of its top corporate donors.

According to Hill Democrats who have now analyzed other corporate compliance deals, the answer is that Wal-Mart was given a real sweetheart deal. The DOL tried to argue the Wal-Mart deal was just like compliance agreements signed with Sears and Foot Locker, but that's not what close analysis of the Wal-Mart deal shows:

  • Wal-Mart is given 15 days advance notice for ANY wage and hour investigation (not just child labor violations). Sears and Foot Locker were given 10 days notice for child labor investigations only.
  • the advance notice to Wal-Mart applies to ANY store. The advance notice to Sears and Foot Locker was limited to a small number of stores that fit into a particular set of circumstances.
  • The Sears and Foot Locker agreements required the companies to implement a comprehensive self-auditing system, the results of which must be provided to the DOL upon request. The Wal-Mart agreement does not require such comprehensive self-auditing.
  • the Wal-Mart agreement gives the company a 10-day abatement period to bring the store into compliance following a DOL finding of a violation. There is no abatement period in the Sears and Foot Locker agreements. Those companies were expected to fix the problem immediately or face penalties.
  • the Wal-Mart agreement contains a provision restricting how the DOL may communicate with the public or media about the agreement. There is no such provision in the Sears or Foot Locker agreements.
  • Read the whole analysis at the link. The bottom line is that no corporation has ever been given this kind of "get out of jail free card" by the Department of Labor. Essentially, Wal-Mart was free to violate the law at will and, if it got caught at any time, all it had to do was give the money stolen from its employees back within fifteen days. And anywhere the company wasn't caught, it could just pocket the money. And in no case would the company ever have to pay another fine.

    Posted by Nathan at February 16, 2005 06:11 PM