Report Sees Faults in Wal-Mart Settlement

There were serious breakdowns in a government settlement with Wal-Mart Stores Inc. over child labor law violations -- including allowing attorneys for the world’s largest retailer to write key parts of the deal, according to a Labor Department inspector general report Monday.

The inspector general attributed the problems to inadequate management controls.

As a result, Wal-Mart received “significant concessions” in the $135,540 settlement made public in February, the report said. Among them: The Labor Department was required to notify the retailer 15 days before opening an audit or investigation, something inconsistent with guidelines for the department’s wage and hour division.

Wal-Mart also could avoid formal citations or penalties if it brought facilities into compliance within 10 days of being told about violations, the report said.

“These breakdowns resulted in [the wage and hour division] entering into an agreement that gave significant concessions to Wal-Mart ... in exchange for little commitment from the employer beyond what it was already doing or required to do by law,” the report said.

The report said it found no evidence of violations of federal laws or regulations.

“The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws,” said Rep. George Miller of Martinez, Calif., ranking Democrat on the House Education and Workforce Committee, who sought the probe.

Miller plans to cosponsor legislation to be introduced this week that would bar the Labor Department from giving advance notice of such inspections, a spokesman for Miller said.

Wal-Mart spokesman Marty Heiers said the company believed that the agreement was appropriate.

“Our goal is to make sure our stores are in full compliance and that our associates are fully informed of all policies, regulations and laws that apply to the employment of workers who are 16 and 17 years of age,” Heiers said. “We don’t employ anyone under the age of 16.”

The settlement involved alleged violations at 25 stores in Arkansas, Connecticut and New Hampshire from 1998 to 2002 that concerned teenage workers who used chain saws, forklifts and other hazardous equipment.

Child labor laws prohibit anyone younger than 18 from operating such equipment. Wal-Mart, based in Bentonville, Ark., denied the allegations but agreed to pay the penalty.

Advocacy group Wal-Mart Watch called on state and municipal officials to follow up with their own investigations.