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November 01, 2005

Labor Dept Rebuked Over Wal-Mart Deal

By Jordan Barab, Reprinted from Confined Space

The Bush administration's very bad weeks continue.

While this won't make the same headlines as the Miers withdrawal or Scooter's journey to the dark side, the underbelly of the Bush administration's coziness with its special corporate friends was revealed for all to see as the Bush Labor Department was taken to the woodshed yesterday by its inspector general who criticized the Department for an agreement promising the stores 15 day notice before labor invstigators woud inspect its stores for child labor violations.

The Labor Department's inspector general strongly criticized department officials yesterday for "serious breakdowns" in procedures involving an 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 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 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.

The inspector general, Gordon S. Heddell, said the agreement did not violate federal laws or regulations.

The Labor Department had reached the special deal with Wal-Mart last February when Wal-Mart, the world's largest retailer agreed to pay $135,540 to settle federal charges that it violated child labor laws in Connecticut, Arkansas and New Hampshire. As part of the agreement, revealed yesterday after it was secretly signed in January, the Labor Department agreed "to give Wal-Mart 15 days' notice before the Labor Department investigates any other 'wage and hour' accusations, like failure to pay minimum wage or overtime."

The inspector general wrote that all Wal-Mart promised to do if caught violating the law again was to bring a store into compliance within 10 days of when the department notifies it of a violation, but that there was

"little commitment from the employer beyond what it was already doing or required to do by law."

"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."

The violations involved workers under age 18 operating dangerous machinery, including cardboard balers and chain saws. In the agreement, Wal-Mart denied any wrongdoing, although the company agreed to pay the fine.

The inspector general's report was conducted at the request of California Congressman George Miller who has had a pretty good month, after succeeding in pressuring the administration into backing off of its Davis Bacon wage support suspension last week.

The inspector general also contradicted the Labor Department's claim that there was nothing about this agreement that the Clinton administration hadn't done, finding that

the agreement between Wal-Mart and the Labor Department's Wage and Hour Division (W.H.D) "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..
The full inspector general report can be found here.

Posted by Jordan Barab at November 1, 2005 08:11 AM