Bush Admin's Sweetheart Deal with Wal-Mart

Calif. Congressman Calls for Investigation into Bush Administration's Sweetheart Deal with Wal-Mart on Labor Violations

So-called ‘compliance agreement’ gives preferential treatment to major Republican donor

February 14, 2005
Office of Congressman George Miller
7th District, California

WASHINGTON, D.C. – After disclosure of a secret agreement between the U.S. Department of Labor and Wal-Mart giving the giant retailer the authority to conduct its own investigations of employee wage and hour complaints, Rep. George Miller (D-Calif.) today requested an investigation by the DOL’s Inspector General to determine whether the arrangement represents a sweetheart deal between the Bush Administration and one of the nation’s most frequent violators of labor laws.

Under the arrangement, disclosed by The New York Times on Saturday, Wal-Mart will be allowed 15 days to investigate and rectify employee complaints before DOL conducts any investigation. Upon receiving a complaint about a potential violation of wage and hour laws, DOL’s field offices around the country are now instructed to notify the DOL office in Little Rock, Arkansas, which will then notify Wal-Mart’s headquarters in Bentonville, Arkansas of the complaint. The Department will not launch its own investigation during that time and it remains unclear under what circumstance it would launch an investigation after the 15 day period ends.

Miller said that such an arrangement could allow the giant employer to cover up evidence of a violation and would discourage aggrieved employees who might fear retribution from the company. Miller also sent a letter to Labor Secretary Elaine Chao today asking for more information about the arrangement.

“I am very concerned about this secret arrangement between Wal-Mart and the Bush Administration,” said Miller, the senior Democrat on the House Education and the Workforce Committee. “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. I intend to find out how this arrangement was reached and, if appropriate, I will consider asking Congress to rescind the agreement if it cannot be justified.

“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.”

According to the Times report, DOL entered into the “compliance agreement” with Wal-Mart after settling a case with the retailer for $135,000 over violations of child labor law in three states involving the use of dangerous heavy machinery by minors. Compliance agreements are meant to prevent similar violations by the employer from recurring, not to give employers advance notification of future violations.

Miller said it was also unusual for the Department to keep secret the fact that a compliance agreement that had been signed. This agreement, reached on January 6, 2005, only became public because of a reporter’s query to the Department. Miller said it was unclear whether Wal-Mart was required to notify its employees of the new arrangement. He said it was possible that employees had continued to file complaints with DOL without knowing that those complaints would be forwarded to Wal-Mart headquarters without an investigation.

Wal-Mart is a major contributor to the Republican Party. In the 2004 election cycle, Wal-Mart donated $2.1 million to candidates and campaigns – more than any other retailer. Eighty percent of those donations went to Republicans, according to OpenSecrets.org. Wal-Mart’s closeness to Republicans was further demonstrated in May 2004, when Vice President Dick Cheney said, “The story of Wal-Mart exemplifies some of the very best qualities in our country – hard work, the spirit of enterprise, fair dealing, and integrity.”

In fact, Wal-Mart has a long history of labor violations, from failing to pay workers for overtime hours, discriminating against women employees, violating child labor laws, and locking workers into stores at night. Last year, Miller’s staff prepared a report that detailed Wal-Mart’s egregious labor practices, and the costs to taxpayers who pick up medical, educational and other costs associated with the company’s well-known low wage policy.

One week after the child labor settlement with the Department, Wal-Mart launched what it called an “unprecedented communications initiative” to improve its image, with a full-page ad in 100 newspapers across the country.

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