March 18, 2005

Wal*Mart's 15 minutes of pain

LITTLE ROCK, Ark. – Wal-Mart Stores Inc. escaped criminal charges but agreed Friday to pay $11 million, a record fine in a civil immigration case, to end a federal probe into its use of illegal immigrants to clean floors at stores in 21 states.
A dozen contractors who actually hired the laborers for work inside stores for the world's largest retailer agreed to plead guilty to criminal immigration charges and together pay an additional $4 million in fines.

"This case breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself," said Michael J. Garcia, assistant secretary for U.S. Immigration and Customs Enforcement...

The subcontractors involved will pay $4 million, most likely a very large amount for them.

However, to Wal*Mart $10 million is about equivalent to their revenue in a 15-minute period. Whether the compliance program has loopholes is unknown.

Note also that Wal*Mart is facing a class action suit by former janitors. Backstory in The price of "cheap" labor is about to go up.

Forbes covers the current events here:

But the class-action lawsuit brought in November 2003 in U.S. District Court for the District of New Jersey in Newark seeks restitution for the workers. Though Wal-Mart filed a motion to dismiss the case in March 2004, the judge has already certified that the claimants can sue under the Fair Labor Standards Act. The judge is currently deciding whether to uphold the workers' racketeering claim against the company. Labor attorney James Linsey is confident that the racketeering claims will also stand.
"That leaves Wal-Mart in a bit of dilemma," Linsey says. "They'll be under some amount of pressure to do the right thing and settle with the people, because they don't like being called racketeers."

Linsey has also found help from foreign governments. The governments of Mexico and the Czech Republic have already filed briefs on the workers' behalf, and Linsey says that other government officials, angry that their citizens were mistreated at Wal-Mart locations, could be joining in...

Posted to Immigration2005a at March 18, 2005 04:10 PM

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