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Department of Labor Reverses Wal-Mart Sweetheart Deal

From TPMCafe.com:

As you may know, last year the Department of Labor struck an agreement with Wal-Mart Stores, Inc., whereby the Department would give the retailer 15 days advance notice before starting an investigation of alleged wage-and-hour law violations (for example, forcing employees to work overtime without pay). The agreement also gave Wal-Mart a 10-day grace period to fix any violations that Department investigators might find without incurring any penalty for the violations. I am happy to report that, after much public scrutiny and controversy, DOL notified me today that it has allowed the agreement to expire. Hopefully this shameful episode will stop the Department from making other sweetheart deals in the future.
Here's the background. Details of the arrangement were made public last February, and prompted justified outrage. Why should Wal-Mart, a notorious violator of labor laws and basic labor standards, get 15 days to clean up evidence of a violation?

Wal-Mart and DOL made the deal after DOL investigators found that Wal-Mart had violated child labor laws in dozens of cases across three states. The violations were the worst type imaginable: Wal-Mart had allowed children to operate dangerous machinery, leading to at least one injury. The settlement agreement ostensibly was meant to lay out the steps that Wal-Mart would take to prevent these violations from happening again, but instead it became what I've called a 'sweetheart deal' between the government and the nation's largest private sector employer.

I asked the Inspector General at the Department of Labor to investigate the sweetheart deal, and in October of 2005 the IG concluded that it was the product of "serious breakdowns" in the normal process for making an agreement; these breakdowns led the Department of Labor to give significant concessions to Wal-Mart. The IG noted that Wal-Mart lawyers actually wrote key portions of the agreement, while DOL lawyers never reviewed it.

All Wal-Mart had to do was pay a $135,000 fine, an amount that Wal-Mart rings up in mere seconds worth of sales.

The settlement agreement was set to expire on January 11, though it could have been extended. I urged the Department of Labor not to extend it, and I learned today that - thankfully -the agreement had been allowed to die.

The Bush Administration has done a lot of favors for powerful corporations, special interests, and campaign contributors at the expense of workers. The Republican Congress is in the same racket, so it will never hold the Administration accountable. But we can hold it accountable, and when we do, we can get results. For Wal-Mart workers, it could mean getting justice when their employer breaks the law.

Posted by Matthew - January 18, 2006 02:12 PM - In The News