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US Labor Department and Wal-Mart’s secret agreement on child labor
Sometimes the intimate collaboration between government and business in the United States is surprising even for those well schooled in the corruption of American capitalism. Such is the case with the recent agreement between retail giant Wal-Mart and the Labor Department, an agreement that came to light following an audit by the Labor Department’s inspector general.
The two parties reached the secret agreement in January 2005, and followed in the wake of investigations into Wal-Mart’s suspected violation of child labor laws. The company agreed to pay $135,000 in fines to settle charges that it used young workers, between 16 and 17 years old, to work with hazardous equipment in three states. The fine amounted to something less than small change for a company pulling in nearly $300 billion in annual sales.
The agreement with the Labor Department was supposed to ensure that the company did not violate labor laws again. It was in fact geared to ensuring that Wal-Mart would not get caught violating the law again, and if it did happen to get caught, to guarantee that there would be no adverse consequences.
Most importantly the agreement included a provision that the government would give the company a 15-day notice “of any audit or investigation at the stores covered” by the agreement. In case this did not give the company adequate time to put on hold any illegal activities, the agreement also gave Wal-Mart a 10-day grace period to address any violations and avoid monetary penalties.
If one had any doubt that this was an agreement tailored to serve the interests of Wal-Mart, the report also noted that it “contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by” the Labor Department’s Wage and Hour Division.
The report noted with a considerable degree of understatement, “The Wal-Mart agreement may adversely impact wage and hour division’s authority to conduct future investigations and issue citations or penalty assessments.” The inspector general did not state that the agreement violated the law; however, it said that several of the provisions violated Labor Department policy.
In defending the agreement, the Labor Department issued a statement claiming that it “only” covered violations of child labor laws. In fact, the agreement was much broader, with the inspector general report noting that “the plain language of the advance notification clause applies to any potential violations, not just child labor violations.”
Read More
http://www.wsws.org/articles/2005/nov2005/walm-n05.shtml
The agreement with the Labor Department was supposed to ensure that the company did not violate labor laws again. It was in fact geared to ensuring that Wal-Mart would not get caught violating the law again, and if it did happen to get caught, to guarantee that there would be no adverse consequences.
Most importantly the agreement included a provision that the government would give the company a 15-day notice “of any audit or investigation at the stores covered” by the agreement. In case this did not give the company adequate time to put on hold any illegal activities, the agreement also gave Wal-Mart a 10-day grace period to address any violations and avoid monetary penalties.
If one had any doubt that this was an agreement tailored to serve the interests of Wal-Mart, the report also noted that it “contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by” the Labor Department’s Wage and Hour Division.
The report noted with a considerable degree of understatement, “The Wal-Mart agreement may adversely impact wage and hour division’s authority to conduct future investigations and issue citations or penalty assessments.” The inspector general did not state that the agreement violated the law; however, it said that several of the provisions violated Labor Department policy.
In defending the agreement, the Labor Department issued a statement claiming that it “only” covered violations of child labor laws. In fact, the agreement was much broader, with the inspector general report noting that “the plain language of the advance notification clause applies to any potential violations, not just child labor violations.”
Read More
http://www.wsws.org/articles/2005/nov2005/walm-n05.shtml
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