|
Comment on this article |
View comments |
Email this Article
|
|
News :: Children : Civil & Human Rights : Crime & Police : Government Secrecy : Labor : Political-Economy : Regime |
|
Labor Dept. Is Rebuked Over Pact With Wal-Mart |
Current rating: 0 |
by Steven Greenhouse
(No verified email address) |
01 Nov 2005
|
|
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 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 reached the settlement in January after finding 85 child labor violations at Wal-Mart stores in Connecticut, New Hampshire and Arkansas, involving workers under 18 who operated dangerous machinery, including cardboard balers and chain saws.
Wal-Mart settled the investigation by agreeing to pay $135,540, but it continued to deny any wrongdoing.
In addition to allowing the 15-day notice, the agreement lets Wal-Mart avoid civil citations and fines if it brings a store into compliance within 10 days of when the department notifies it of a violation.
In exchange for these concessions, the inspector general wrote, 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."
Responding to its inspector general, the Labor Department said it "strongly disagrees with the report's overall characterization of the effectiveness of the Wal-Mart child labor settlement agreement."
The department said the inspector general had wrongly given the impression that Wal-Mart had been permitted to avoid all penalties for violations of wage and hour laws by bringing its stores into compliance.
Even though department officials asserted that the agreement was much like that with other companies, Mr. Heddell found that the agreement between Wal-Mart and the Wage and Hour Division "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.
Representative George Miller, the California Democrat who asked the inspector general to investigate the settlement, said the report showed that the Bush administration was seeking to do favors for a powerful friend and a major Republican contributor in Wal-Mart.
"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," Mr. Miller said. "The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf."
Mr. Heddell said he did not find that the agreement resulted from improper pressures. "Nothing came to our attention indicating evidence of influence or pressure from internal or external sources," he wrote.
Martin Heires, a Wal-Mart spokesman, said, "We think it's important to note that the inspector general's office found that the agreement is in compliance with federal law."
"We continue to believe the agreement was the appropriate course of action," he added. "Our goal remains to make sure that our stores are in full compliance in 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."
The inspector general recommended that the Wage and Hour Division develop procedures for developing and approving agreements and require that all future settlements be developed in coordination with the department's legal division.
The department said that it had developed a new policy on reaching settlements that, it was confident, would carry out the inspector general's recommendations.
The Labor Department said that the advance notification provisions applied only to child labor matters. But the inspector general voiced concern that "the plain language of the advance notification clause applies to any potential violations, not just child labor violations." Department officials say that giving 15 days' notice helps to ensure that Wal-Mart will come into compliance.
The department denied the inspector general's suggestion that it had consulted with Wal-Mart before issuing a news release on the settlement. The department took the unusual action of announcing the agreement a month after it was signed, doing so only after some details were leaked to a newspaper.
The report said: "The inspector general has specific concerns with the Wal-Mart agreement because it contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by W.H.D., and because it did not receive adequate W.H.D. review and approval."
Copyright 2005 The New York Times Company
http://www.nytimes.com |
Related stories on this site:
Wal - Mart Strikes at Critical Movie
| 
Copyright by the author. All rights reserved. |
Comments
|
A New Weapon for Wal-Mart: A War Room |
by Michael Barbaro
(No verified email address) |
Current rating: 0
01 Nov 2005
|
BENTONVILLE, Ark., Oct. 26 - Inside a stuffy, windowless room here, veterans of the 2004 Bush and Kerry presidential campaigns sit, stand and pace around six plastic folding tables. Open containers of pistachio nuts and tropical trail mix compete for space with laptops and BlackBerries. CNN flickers on a television in the corner.
The phone rings, and a 20-something woman answers. "Turn on Fox," she yells, running up to the TV with a notepad. "This could be important."
A scene from a campaign war room? Well, sort of. It is a war room inside the headquarters of Wal-Mart, the giant discount retailer that hopes to sell a new, improved image to reluctant consumers.
Wal-Mart is taking a page from the modern political playbook. Under fire from well-organized opponents who have hammered the retailer with criticisms of its wages, health insurance and treatment of workers, Wal-Mart has quietly recruited former presidential advisers, including Michael K. Deaver, who was Ronald Reagan's image-meister, and Leslie Dach, one of Bill Clinton's media consultants, to set up a rapid-response public relations team in Arkansas.
When small-business owners or union officials - also employing political operatives from past campaigns - criticize the company, the war room swings into action with press releases, phone calls to reporters and instant Web postings.
One target of the effort are "swing voters," or consumers who have not soured on Wal-Mart. The new approach appears to reflect a fear that Wal-Mart's critics are alienating the very consumers it needs to keep growing, especially middle-income Americans motivated not just by price, but by image.
The first big challenge of the strategy will come Nov. 1 with the premiere of an unflattering documentary. "Wal-Mart: The High Cost of Low Price" was made on a shoestring budget of $1.8 million and will be released in about two dozen theaters. But its director, Robert Greenwald, hopes to show the movie in thousands of homes and churches in the next month. The possibility that it might become a cult hit like Michael Moore's 1989 unsympathetic portrait of General Motors, "Roger & Me," has Wal-Mart worried.
So, Wal-Mart has embarked on a counteroffensive that would have been unthinkable even a year ago. Relying on a preview posted online, Wal-Mart investigated the events described in the film and produced a short video contending the film has factual errors. (Mr. Greenwald denies there are errors and says that Wal-Mart has not seen the final cut.)
Wal-Mart has also begun to promote a second film, "Why Wal-Mart Works & Why That Makes Some People Crazy," which casts the company in a rosier light. Wal-Mart declined to make its executives available for the Greenwald film, but it participated with the second film's director, Ron Galloway. The war room team helped distribute a letter, written by Mr. Galloway, that challenges Mr. Greenwald to show the two movies side-by-side.
To keep up with its critics, Wal-Mart "has to run a campaign," said Robert McAdam, a former political strategist at the Tobacco Institute who now oversees Wal-Mart's corporate communications. "It's simply nonsense for us to let some of these attacks go without a response."
Wal-Mart's aggressive new posture is a departure from its tradition of relying on an internal staff to manage the company's image. The war room, which is part of a larger Wal-Mart effort to portray itself as more worker-friendly and environmentally conscious, runs counter to the philosophy of the chain's founder, Sam Walton. Believing that public relations was a waste of time and money, the penny-pinching Mr. Walton would not likely have hired a public relations firm like Edelman, Wal-Mart's choice to operate its war room.
So what has changed? For one thing, Wal-Mart's critics have become more sophisticated.
For years, unions hurled little more than insults at the chain. But over the last year, two small groups - Wal-Mart Watch and Wake Up Wal-Mart - set up shop in Washington with the goal of waging the public relations equivalent of guerilla warfare against the company. Wal-Mart Watch received start-up cash from the Service Employees International Union; Wake Up Wal-Mart is a project of the United Food and Commercial Workers International Union. Unions have tried, unsuccessfully, to organize Wal-Mart's employees.
At the suggestion of Wake Up Wal-Mart, members of the nation's largest teachers' unions staged a boycott of Wal-Mart for back-to-school supplies this fall. Wal-Mart Watch, meanwhile, set up an automated phone system that called 10,000 people in Arkansas in June seeking potential whistle-blowers willing to share secrets about the retailer.
Wal-Mart did not rebut such attacks, even when Wal-Mart Watch released a 24-page report blasting the company's wages and benefits. Wal-Mart Watch said the report had been downloaded from its Web site 55,000 times.
Once a darling of Wall Street, Wal-Mart's stock price has fallen 27 percent since 2000, when H. Lee Scott Jr. became chief executive, a drop that executives have said reflects, in part, investors' anxieties about the company's image. Sales growth at stores open for more than a year has slowed to an average of 3.5 percent a month this year, compared with 6.3 percent at Target. And Wal-Mart is facing growing resistance to new urban stores, with high- profile defeats in Los Angeles, Chicago and New York.
There is some evidence that criticism is influencing consumers. A confidential 2004 report prepared by McKinsey & Company for Wal-Mart, and made public by Wal-Mart Watch, found that 2 percent to 8 percent of Wal-Mart consumers surveyed have ceased shopping at the chain because of "negative press they have heard."
The Greenwald movie threatens to make matters worse. It features whistle-blowers who describe Wal-Mart managers cheating workers out of overtime pay and encouraging them to seek state-sponsored health care when they cannot afford the company's insurance. And it travels across small-town America to assess the effects on independent businesses and downtowns after a Wal-Mart opens.
The film is a particular concern now that Wal-Mart is trying to move upscale, a strategy it hopes will appeal to higher-income consumers. In the last year, Wal-Mart has introduced a line of urban fashions called Metro 7, hired hundreds of fashion specialists to monitor how clothing is displayed in stores, and produced more polished advertising.
But for the fashion strategy to pay off, Wal-Mart must win over a group of shoppers who are sensitive to criticism of the chain's record - consumers, in the words of Wal-Mart's chief executive, "who are not worried about their next paycheck."
Hence the war room in Bentonville. Wal-Mart executives realized they were unprepared to react to what Mr. Scott began to call the most expensive campaign ever waged against a corporation. So the company quietly mailed a letter to the country's biggest public relations firms several months ago seeking their help in developing a response.
The contract went to Edelman, which assigned its top two Washington operatives to the account. Wal-Mart would not say what it is paying Edelman, nor would it allow interviews with the war room staff. Mr. Dach, who is active in environmental and Democratic causes, was an outside adviser to President Clinton during the impeachment battle. Mr. Deaver was President Reagan's communications director and the creative force behind Mr. Reagan's so-called Teflon image.
Edelman also dispatched at least six former political operatives to Bentonville, including Jonathan Adashek, director of national delegate strategy for John Kerry, and David White, who helped manage the 1998 re-election of Representative Nancy Johnson, a Connecticut Republican. Terry Nelson, who was the national political director of the 2004 Bush campaign, advises the group.
In turn, Wakeup Wal-Mart is led by, among others, Paul Blank, former political director for the Howard Dean presidential campaign, and Chris Kofinis, who helped create the DraftWesleyClark.com campaign.
Wal-Mart Watch's media team includes Jim Jordan, former director of the Kerry campaign, and Tracy Sefl, a former Democratic National Committee aide responsible for distributing negative press reports about President Bush during the 2004 campaign.
The war room staff arrives at Wal-Mart's headquarters, a short drive from a nearby corporate apartment where they live, by 7 every morning. The group works out of an old conference room on the second floor, christened Action Alley, the same name Wal-Mart gives to the wide, circular aisle that runs around its stores.
Three display boards are covered with to-do lists. One says: "Promote Week of 10/24/05: MLK Memorial Donation. Urban/blighted community plan." Two large maps show the location of Wal-Mart and Sam's Club stores across the United States.
The team starts the day by scanning newspaper articles and television transcripts that mention Wal-Mart. Next come conference calls with Wal-Mart employees around the country to plan for events. Whenever possible, Mr. McAdam said, the war room will try to neutralize criticism before it is leveled.
That was the strategy behind what Action Alley considers its first coup. In late September, after several unions broke off from the A.F.L.-C.I.O., the splinter groups announced they would hold a convention in St. Louis on a Tuesday.
Action Alley members, assuming Wal-Mart would be a target of criticism during the union gathering, arranged for Wal-Mart to hold its own news conference the day before. It invited three local suppliers, a sympathetic local official and a cashier to say that Wal-Mart had a positive effect on the community.
"If you look at many of the stories that were written about that overall convention, they've got our messages in them," Mr. McAdam said. "In the past, when we've just responded to something somebody else is doing, it's sort of 'you know, by the way, Wal-Mart says ...' We got ahead of this one."
A campaign atmosphere pervades Action Alley. A small bus with the words "Clinton-Gore" on the side sits on the table. When discussing Wakeup Wal-Mart, Wal-Mart Watch and the Greenwald movie, Mr. McAdam slips into political-speak.
"The people who show up at Mr. Greenwald's film are probably not swing voters," he said. "They are probably the true believers of their point of view and I doubt there is a heck of a lot we can do to change their minds."
Mr. McAdam continued: "They've got their base. We've got ours. But there is a group in the middle that really we all need to be talking to."
Copyright 2005 The New York Times Company
http://www.nytimes.com |
|
