Wal-Mart’s complicity in violations of
Alleged violations of standards at
Extent of the alleged
Wal-Mart has for some time been,
and remains, the target of numerous campaigns directed at
unacceptable working conditions at the company’s suppliers. This
involves both conditions falling far short of the standards
Wal-Mart itself requires of its suppliers and complicity in
violations of ILO labour standards and human rights standards.
12Wal-Mart Stores Inc. – Standards for Suppliers. Internal Code of Conduct. www.walmartstores.com/Files/SupplierStandards-Revisions12.2.04.pdf .
Violations of human rights
standards among Wal-Mart’s suppliers are alleged to take place in a
large number of countries. The violations include employment of
minors, working hour violations, wages below the legal minimum,
health-hazardous working conditions, unreasonable punishment of
employees, prohibition of unionisation and extended use of a
production system that fosters working conditions bordering on
Wal-Mart’s supplier network
The company probably has the
largest supplier network in the world. It has not been possible to
determine the exact number of suppliers, but it clearly runs to
tens of thousands worldwide.
In 2003, Wal-Mart imported goods
valuing more than USD 15 billion from China, and is the world’s
largest individual importer from that country.
13Anderson Sarah, and Williams, Spain, MarketWatch.com, 13 January 2005 and Goodman, Peter S. & Pan, Phillip P, “Chinese Workers Pay for Wal-Mart’s low prices,” Washington Post, 8 February 2004, page A01.
Wal-Mart’s annual turnover is equivalent to about 2 % of the Gross
Domestic Product of the USA, making it larger than the GDP of 161
of the world’s states.
14According to the World Bank, see http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf .
In Wal-Mart’s own report, “Factory
Certification Report” for 2003-2004, the company states that it
imports products from factories and suppliers in 70 countries.
15Wal-Mart Stores Inc., “Factory Certification Report: March – February 2004,” page 23. The entire report at: www.walmartfacts.com/docs/131_NewsDeskFactShtSourcingarticle_1161280340.pdf .
The origin of the company’s products is described as
“tens of thousands of factories”.
16Wal-Mart Stores Inc., “Factory Certification Report: March 2003 – February 2004,” page 8.
In 2004, the company claimed it had 5,300 suppliers with which it
dealt directly. According to the company’s annual report for 2004,
“We depend on over 68,000 suppliers”.
17Wal-Mart annual report, page 8 http://library.corporate-ir.net/library/WAL-MART_final.pdf
This is assumed to include both domestic and international
suppliers. Moreover, a single supplier can be assumed to have
several factories, implying that the number of production sites is
substantially higher than the number of suppliers.
Wal-Mart distinguishes between
“direct” and “indirect” suppliers. A “direct” supplier is one that
Wal-Mart deals with directly. The substance of the term “indirect”
supplier is less clear. Wal-Mart states that the company also deals
with indirect suppliers, and all manufacturers within the so-called
“high-risk” merchandise segments (footwear, garments, toys
and sports equipment) are regarded as indirect suppliers.
18Wal-Mart Stores, Inc., “2004 Report on Standards for Suppliers,” page 2 and 6. See footnote 11.“High-risk” signifies that the risk of unacceptable
working conditions is regarded by Wal-Mart itself as greatest in
Wal-Mart’s monitoring regime
Wal-Mart operates a monitoring
regime designed to ensure acceptable working conditions at 5,300
direct suppliers. The monitoring is said to encompass a further
2,300 indirect suppliers within the above-mentioned risk sectors.
19See footnote 14.
In 2004, Wal-Mart published a
report giving the following information on conditions which the
company itself describes as unacceptable.
20Wal-Mart Stores, Inc., “2004 Report on Standards for Suppliers,” page 15-19. See footnote 11.
Figures are stated as percentages of the 5,300 investigated
Minimum wages and benefits not
Wage payments unverifiable
Violations of working hour
provisions / working hours not registered
Seven-day working week
No documentation of employees’
Unlawful employment contracts
No fire protection
Is not clear how inclusive this
monitoring regime really is, given the fact that Wal-Mart itself
reports that a
“(…) vast assortment of merchandise found in our stores is
sourced from tens of thousands of factories in some 70 countries
around the world.”21Wal-Mart Stores Inc., “Factory Certification Report: March 2003 – February 2004,” page 8.
Nevertheless, it is safe to assume that the number of suppliers
that are monitored is far lower than the total number of suppliers
used by Wal-Mart.
A further question concerns the
effectiveness of the monitoring regime in bringing to light
unacceptable working conditions in the supply chain. A pertinent
case in this connection concerns the dismissal of a Wal-Mart
James W. Lynn, who was responsible for auditing the
company’s suppliers in Latin America. Mr. Lynn claims he was
dismissed because he truthfully reported on the working conditions
at these suppliers. Wal-Mart denies that he was dismissed on this
basis. Mr. Lynn has brought an action against Wal-Mart for wrongful
22James W. Lynn vs. Wal-Mart Stores Inc. page 3. www.nlcnet.org/faxes/lawsuit/index.html . See also Greenhouse, Stephen, “Fired officer is suing Wal-Mart,” New York Times, 1 July 2005.
Mr. Lynn explains in an interview how Wal-Mart planned its
inspections with a view to revealing as few norm violations as
23National Labor Committee: “Wal-Mart whistleblower speaks out: Working for Wal-Mart as a monitor” http://www.nlcnet.org/news/james_lynn.shtml
In the lawsuit
James W. Lynn vs. Wal-Mart stores Inc., it is stated that
the company’s inspection system, previously called the
“Factory Certification Program”24Wal-Mart now calls the system “Ethical Standards Program (ES).” Prior to January 2005 it was called “Factory Certification Program” Wal-Mart Stores Inc., “2004 Report on Standards for Suppliers,” page 5., was designed only to create the impression that working
conditions at the suppliers are acceptable.
25In the lawsuit it is contended that the monitoring regime is “… designed only to create the impression that Wal-Mart was producing its goods under human working conditions when, in fact, working conditions at the factories were terrible,” see www.nlcnet.org/faxes/lawsuit/index.html page2.
These claims accord with an earlier, extensive article in the
Business Week about working conditions at Wal-Mart’s
26Business Week, 2 October 2000., “A Life of Fines and Beatings”: Indications that products for Wal-Mart, and other firms, continue to be produced in China under sweatshop conditions”.
A key objection to the company’s
monitoring regime is that inspections are generally announced well
in advance, enabling the suppliers to temporarily improve
orderliness and cleaning, construct false lists of hours worked,
remove minors and coach employees in replying to questions if
27Goodman, Peter S and Pan, Phillip P., “Chinese Workers Pay for Wal-Mart’s Low Wages,” Washington Post, 8 February 2004, page A01.
In 2003, Wal-Mart reported that 1% of the inspections were carried
out without prior notice. In 2004, this figure rose to 8%, with the
aim of raising it to 20%.
28Wal-Mart Stores Inc., “2004 Report on Standards for Suppliers,” page 21. See footnote 11.
Another objection to Wal-Mart’s
monitoring regime is the absence of third-party verification. A
majority of the inspections, 85 %, are conducted by Wal-Mart’s own
employees, the remainder by third-party inspectors approved by
29Wal-Mart Stores Inc., “2004 Report on Standards for Suppliers,” page 26. Wal-Mart uses two external companies to audit suppliers: Global Social Compliance, and Intertek Testing Service. Wal-Mart states that it will use a further four audit companies in 2005.
James W. Lynn vs. Wal-Mart Stores Inc., the plaintiff
contends that Wal-Mart’s management exerts pressure on company
employees who conduct inspections at suppliers to get them to
modify the results. The plaintiff also claims that someone in
Wal-Mart’s local management in Honduras received bribes from
factory owners in that country in order to have the factories
approved as suppliers.
30See www.nlcnet.org/faxes/lawsuit/index.html, page 7.
A class action lawsuit has been
brought against Wal-Mart,
Does vs. Wal-Mart Stores Inc., in which employees of
Wal-Mart’s suppliers in several countries hold the company
responsible for unacceptable working conditions.
Wal-Mart is among other things alleged to have specific knowledge
that a large number of its suppliers are acting in violation of the
law and in violation of Wal-Mart’s own Guidelines.
32See footnote 30, page 19.
Wal-Mart’s influence on working
conditions within the supplier network
Wal-Mart’s size gives it
substantial market influence in the supplier industry. In fact, the
company makes no secret of the fact that it imposes very stringent
requirements on its suppliers to get them to cut their prices,
enabling Wal-Mart to resell at low prices to the consumer.
33See for example Hansen, Chris and Greenberg, Richard, NBC Dateline – Primetime Report, “Human Cost behind Bargain Shopping: Dateline hidden camera investigation in Bangladesh – Human Cost Behind Bargain Shopping: Part 3,” 17 June 2005. www.msnbc.msn.com/id/8243331/
Wal-Mart generally employs a tender arrangement involving a reverse
auction whereby a number of suppliers are invited to deliver a
particular item, and, after several rounds of competitive bidding,
the supplier who bids the lowest price wins the contract.
34Oxfam International, “Trading Away Our Rights: Women working in global supply chains,” Oxfam International, 2004, page 55. www.maketradefair.com
Wal-Mart is also inclined to renegotiate agreements with its
existing suppliers; earlier this year the company reportedly asked
suppliers to cut their prices by 12 % to ensure contract renewal.
35Fortune (Asian Edition), 16 May 2005, Quoted by The National Labor Committee (NLC) “How Can Wal-Mart Sell a Denim Shirt for $ 11.67?”, 20 June 2005. www.nlcnet.org/news/denim_shirt.pdf
Suppliers who are unable or
unwilling to cut prices may find that Wal-Mart cancels the
contract, preferring to find alternative suppliers elsewhere. In
the case of suppliers who cut their prices, the result will in many
cases be longer working days and pay reductions for employees, and
a general worsening of working conditions. In connection with the
investigation conducted for the Council, the manager of a supplier
factory stated “
Wal-Mart is dominating buying and selling, therefore you have
to match their demands … Big size and cheap price”.36This reference is in the Council’s archives. To the
Washington Post, a representative of the Chinese labour
authorities stated: “
Wal-Mart pressures the factory to cut its prices, and the
factory responds with longer hours or lower pay… And the workers
have no option.”37See footnote 26.
Wal-Mart has introduced a system of
production quotas which must be filled by suppliers. This system,
along with the company’s constant insistence on lower prices, forms
the background for several of the violations of standards taking
place in the supplier chain. A number of cases of working
conditions bordering on forced labour have been documented, where
employees are required to work very long days, seven days a week,
without overtime compensation and without being allowed to leave
the production site.
Examples of alleged norm violations
by Wal-Mart’s suppliers
Nicaragua38The Council has obtained information on working conditions in Latin America from the National Labor Committee. For more information on the National Labor Committee (NLC), see http://www.nlcnet.org . The enquiries made are documented by film, interviews and reports and form part of the Council’s archives. Uberculture, an NGO in Montréal, Canada, has, on commission for the secretariat, independently scrutinised and updated the NLC material and supplemented it with its own film and interview material.
King Young S.A. factory, having Taiwanese owners, 80 % of
the output is for Wal-Mart, above all Wal-Mart’s apparel brand “
39The NLC’s report “King Yong, Nicaragua: A major test case for the Central American Free-Trade Agreement, July 2004” page 3. See http://www.nlcnet.org/campaigns/kingyong/
As is the case at a number of other
production sites, there are reports of a system involving
production quota requirements that are so stringent that employees
invariably have to work overtime in order to fill the quotas.
Moreover, employees are reported to be locked inside the factory
premises and subjected to various forms of abuse.
40See footnote 38. Also confirmed by the work of Uberculture, ref. footnote 37. In the Council’s archives.
Nicaraguan labour authorities have
identified violations of working hour provisions, non-payment for
overtime and a number of violations of work environment and safety
regulations. When the management learned that employees were in the
process of unionising, the employees concerned were dismissed. More
than 400 employees have been dismissed for this reason, in
violation of national laws. Nicaraguan authorities have ordered the
factory to reinstate the dismissed employees, to no avail.
41See footnote 38.
As regards Wal-Mart’s inspections,
Wal-Mart representatives are stated to have inspected the factory
on several occasions, but there is no evidence that Wal-Mart has
taken any action vis-à-vis the factory’s management to address the
poor working conditions.
42See footnote 38.
Working conditions at the
King Young S.A. and
Presitex S.A. factories are included in the grounds for
the class action
Does vs. Wal-Mart Stores Inc. These factories manufacture
textiles for sale in Wal-Mart stores in the USA. It is alleged that
employees at the factories are required to work overtime without
adequate compensation and that wages are below the legal minimum.
One of the plaintiffs also claims to have been dismissed because
she tried to form a trade union.
43See footnote 30, section II E, page 9-10.
Hanchang Corporation of Korea has factories in El
Salvador, Sri Lanka, the Dominican Republic and in China. In El
Salvador, the production for Wal-Mart takes place at the
Oriental Tex factory which manufactures textiles under the
Bobbie Brooks and
44NLC’s report: “Hanchang Textiles/Oriental Tex: El Salvador,” 17 December 2003, see http://://www.nlcnet.org/campaigns/ca03/hanchang/report.body.pdf .
According to the information at hand, the most common type of norm
violation at this factory is that employees are required to work
14-27 hours overtime per week without compensation.
45According to the National Labor Committee’s representative for Latin America, Serigo Chavez. In the Council’s archives.
The employees tell of threats, abuse and physical punishment and of
a highly stressful physical work environment.
46See footnote 39.
When visiting Wal-Mart’s suppliers in the Honduras,
persons previously responsible for Wal-Mart’s own inspections found
a series of violations of wage and working hour provisions,
padlocked fire escapes, poor physical work environment and various
other conditions that were contrary to Wal-Mart’s own Guidelines
47James W. Lynn versus Wal-Mart Stores Inc., page 7, and Greenhouse, Steven, “Fired officer is suing Wal-Mart,” New York Times, 1 July 2005.
The National Labor Committee has subsequently confirmed (by
inspections conducted in April 2005) that these conditions have not
48New York Times, 1 July 2005.
There is information at hand regarding unacceptable
working conditions at 21 of Wal-Mart’s suppliers in Lesotho. They
involve extensive use of unpaid overtime, low wages, various forms
of physical maltreatment and harassment, a poor work environment
and a ban on unionisation. There are also reports of a widespread
practice of ordering employees to work on Sundays without this
being registered or paid for, thereby ensuring that Wal-Mart’s
standard of one rest day per week is ostensibly observed.
49The source of this information is in the Council’s archives. The allegations are wide-ranging and refer to all 21 suppliers. The allegations are confirmed by the Lesotho Clothing and Allied Workers Union (LECAWA) and by the African Office of the International Textile, Garment and Leather Workers Federation.
Oxfam International has reported similar conditions
at suppliers in Kenya.
50See footnote 33. There are
reports of very long working days with unpaid overtime, various
forms of abuse and employees afraid to complain for fear of losing
their jobs. The Council has also received information that
employees at three factories in 2003 complained to the authorities
over poor working conditions, long working days etc., and then went
on strike. As a result, the factories were closed, only to reopen
with a new workforce.
51The source of this information is in the Council’s archives.
Unacceptable working conditions have been brought to
light at the
Tri-Star factory in Uganda, in this case prompting a
complaint to the ILO that the authorities are not enforcing work
environment legislation or employees’ right to strike.
52See http://www.itglwf.org/displaydocument.asp?DocType=Press&Index=821&Language=EN .
Namibia, Malawi, Madagascar
The main suppliers to Wal-Mart in these countries
are Asian-owned textile factories. The Council is aware of a report
dealing with working conditions at such factories in these
countries. Here too there are consistent accounts of long working
days, low wages, injuries due to lack of protective equipment and
various forms of abuse and discrimination.
53As yet this report is unpublished. A copy exists in the Council’s archives.
Information from several sources recounts
unacceptable working conditions at Wal-Mart’s suppliers in
54As yet this report is unpublished. A copy exists in the Council’s archives.
In the class action
Does vs. Wal-Mart Stores Inc., working conditions at the
Leo Garments and
Hong Yein are included in the grounds for the lawsuit.
Both factories manufacture textiles for sale in Wal-Mart stores in
the USA. It is alleged that the employees are required to work
unpaid overtime and that wages are below the legal minimum.
56See footnote 54, section II D, page 8.
A report made for
NBC Dateline using a hidden camera deals with working
conditions at some of Wal-Mart’s suppliers in Bangladesh.
57Hansen, Chris and Greenberg, Richard, NBC Dateline – Investigatory Report, “Human Cost behind Bargain Shopping: Dateline hidden camera investigation in Bangladesh,” 17 June 2005. www.msnbc.msn.com/id/8243331/
The report, broadcasted on 17 June 2005, showed working conditions
at a number of textile factories in Bangladesh. Consistently poor
working conditions with very long working days are shown, along
with various forms of abuse and practices falling short of
Wal-Mart’s own requirements on its suppliers. The documentary also
shows a production quota system requiring the employees to produce
a specific number of garments per day, and that the employees
cannot leave work until the quota is filled. There is no payment
for overtime, and the report shows employees compelled to work from
0800hrs to 0300hrs the next morning, only to start work again at
0800hrs. Wal-Mart’s comment on the report is said to be that the
norm violations shown are commonplace: “…
the labor violations depicted on ‘Dateline NBC’ are
58Ellis, Kristi, “Wal-Mart Rebuts ‘Dateline’ Flap,” Women’s Wear Daily, 21 June 2005, www.wwd.com .
A report is also available from the
National Labor Committee containing further documentation of
working conditions at Wal-Mart’s suppliers in Bangladesh. This
alleges use of child labour (a 13 year-old girl) and the death of a
young woman after working non-stop for 38 hours despite being ill.
59The National Labor Committee (NLC), “Testimony of Masuma: Factory Working from Bangladesh,” www.nlcnet.org/campaigns/bangtour/maksuda.shtml .
A further report describes how 6-7
employees at a textile factory outside Dhakar lost their lives and
many were injured when the management called in the police after
the employees had gone on strike. They went on strike because they
were ordered to work five hours unpaid overtime per day, seven days
a week. The police beat the employees with batons and opened fire
with handguns. One of the injured in the shooting was a 13 year-old
60The National Labor Committee (NLC), “Testimony of Sk Nazma: President of the Bangladesh Centre for Worker Solidarity (BCWS), www.nlcnet.org/campaigns/bangtour/maksuda.shtml .
Working conditions at Wal-Mart’s
suppliers in Bangladesh are described in the class action lawsuit
Does vs. Wal-Mart Stores Inc.,61See http://www.laborrights.org/projects/corporate/walmart/WalMartComplaint091305.pdf
in which attention is drawn to conditions at the
Western Dresses and
Lucid Garments factories in Dhaka. Both these factories
manufacture textiles for Wal-Mart’s outlets in the USA. It is
described how the factory management routinely engages private
security forces, called “
Mastans”, to terrorise employees who complain about
working conditions or attempt to unionise: “
Mastans routinely assault, rape and in some cases kill workers
who complain even about the most minute labor rights or who attempt
to form trade unions.”
62See footnote 60, section II B, page 5-6.
Wal-Mart is regarded as the largest individual
importer of goods from China,
63See footnote 12. and 80% of
the production sites for so-called direct suppliers are Chinese.
64See footnote 26. There is,
in addition, an unknown number of production sites for the indirect
suppliers, possibly amounting to several thousand factories.
The Council bases itself on
documentation in the form of a report
65The Council takes its basis in a report from the organisations SwedWatch, Fair Trade Centre and Hong Kong Christian Industrial Committee, see www.swedwatch.org , www.fairtradecenter.se and www.cic.org.hk/. The report is entitled “Easy to Manage: A report on Chinese toy workers and the responsibility of the companies,” English version from May 2005, www.fairtradecenter.se/index.php/ftc/content/view/full/436 .
and film footage
66The findings are also documented by film footage. The factory managements have consented to filming, provided the names of the factories were not stated. Some of the footage is included in SwedWatch’s film “Santa’s Workshop” from 2004. Some additional material from SwedWatch is also used.
on working conditions at a small number of Chinese factories.
67The factories’ names are not stated.
Supplier “X” supplies Wal-Mart from two factories in
Guangdong. There are reports of very long working days, a seven-day
working week, no guaranteed minimum wage, unpaid overtime and a
system for providing false information at inspections. The latter
includes manipulation of lists of hours worked, coaching and
bribery of employees to give favourable answers to inspectors’
questions, temporary change of accommodation to give the impression
of less cramped conditions, and temporary removal of minors or
illegal employees from the factory site.
68See footnote 64 and 65.
Supplier “Y” is a Korean company with factories in
Guangdong that produce toys for Wal-Mart. Unlawfully long working
days, no guaranteed minimum wage and production plans imposing
unreasonable workloads on the employees are also reported at this
supplier. However, inspections have brought to light some
improvements evidenced by less manipulation of lists of hours
worked and the like, and the employees are now paid somewhat higher
69See footnote 64 and 65.
He Yi Electronics and Plastics Productions Factory (also
operating under the name
Foreway Industrial China Ltd.) manufactures toys for
Wal-Mart and other companies. The factory has between 600 and 2,100
employees, depending on the season. There are reports of employees
having to work 18-20 hour shifts, seven days a week, of wages below
the legal minimum, of the absence of written contracts, and of a
system for manipulating inspections. The Council’s secretariat has
received copies of checklists containing answers on working
conditions that the employees are required to give at inspections,
along with lists of hours worked showing 20 hour working days. The
share of the factory’s output going to Wal-Mart is said to be up to
70Documentation is available in the Council’s archives. See also the report Toys of Misery 2004.
In the class action
Does vs. Wal-Mart Stores Inc.,71See http://www.laborrights.org/projects/corporate/walmart/WalMartComplaint091305.pdf
it is alleged that employees at two of Wal-Mart’s suppliers in
Shenzhen have been compelled to work without taking days off,
holidays or rest breaks. The employer has withheld three months’
wages to stop employees quitting. Moreover, mandatory overtime work
has routinely been introduced without adequate compensation as well
as health-hazardous working conditions.
72See footnote 70, part II A, page 3-4.
Working conditions at some of Wal-Mart’s suppliers
in Indonesia are also described in
Does vs. Wal-Mart Stores Inc. This involves the factories
PT Citra Bumilang Admitra and
PT Busunaremaja Agracipta, both of which manufacture
textiles of the “
George” brand for sale in Wal-Mart stores in the USA. It
is alleged that employees are compelled to work unpaid overtime,
that wages are below the legal minimum and, in general, that
employees who seek to join a trade union are subject to violence,
threats and harassment.
73See footnote 70, part II C, page 6-7.
Alleged violations in connection with
the company’s own operations
Allegations have been brought
against the company for violation of labour law provisions at its
operations in the USA and Canada. This refers,
inter alia, to extensive use of unpaid overtime, breach of
rules governing the employment of minors, employment of illegal
labour, extensive discrimination of female employees and measures
to actively obstruct unionisation.
Discrimination of female
A number of civil lawsuits are
pending against the company on a variety of grounds, among them
Dukes vs. Wal-Mart Stores Inc., in which 1.6 million
current and former female employees are bringing a class action
lawsuit to seek compensation for discrimination.
74The Economist, “Trial by Checkout: Facing a giant sex-discrimination suit,” Economist, Vol. 371, Issue 8381, 26 June 2004, page 64, and Serwer, Andy, “Bruised in Bentonville,” Fortune Magazine, 18 April 2005, page 45.
A number of allegations are put forward against Wal-Mart, among
them that the company discriminates against female employees in
pay, training and promotion.
75Dukes versus Wal-Mart, see http://news.findlaw.com/wp/docs/walmart/dukeswalmart61901.pdf
It is also reported that female employees who attempt to complain
about such discrimination have lost their jobs.
76Of the National Organization for Women (NOW), “Wal-Mart Designated “Merchant of Shame,” www.wal-martlitigation.com/current.htm
Dukes vs. Wal-Mart Stores Inc., the plaintiffs base their
case on alleged consistent discrimination of female employees in
the company. This is supported by statistical analyses showing a
pattern of discrimination in promotion and wages at Wal-Mart’s
operation in the USA.
77Analyses conducted by Dr Richard Drogin, Professor Emeritus of Statistics, California State University, see also footnote 74.
According to the analyses, females have earned less than males in
the same position, for virtually all positions, each year since
1996. The findings are confirmed in another analysis which
similarly concludes that females are subject to a significant
margin of wage discrimination, and that this cannot be put down to
78Analysis conducted by Dr Marc Benedic Jr, see also footnote 74.
A court ruling has been delivered
Dukes vs. Wal-Mart Stores Inc., to be conducted as a class
action. The federal judge
79Judge Martin Jenkins, 22 June 2004. found that it is
possible for a corporate culture that pervades an organisation to
result in discrimination, although the company claims to counteract
discrimination of its employees.
80The Economist, “Trial by Checkout: Facing a giant sex-discrimination suit,” Economist, Vol.371, Issue 8381, 26 June 2004, page 64.
Active obstruction of the
employees’ right to unionise
A spokesperson for Wal-Mart is
quoted with the following statement about employees who wish to
join a union: “
Our philosophy is that only an unhappy associate81Wal-Mart consistently applies the term “associate” to all their employees.would be interested in joining a union … so that’s why Wal-Mart
does everything it can to make sure that we’re providing our
associates what they want and need”.
82Goldman, Abigail and Cleveland, Nancy, “An Empire Built on Bargains Remakes the Working World: Wal-Mart is so powerful that it moves economies of entire countries, bringing profit and pain. The prices can’t be beat, but the wages can,” Los Angeles Times, 23 November 2003. Pulitzer Prize Winner: www.pulitzer.org/year/national-reporting/works/walmart1.html
Officially, Wal-Mart has an “open-door policy” towards its
, i.e. employees are free to raise questions and problems
with the management. The company cites this as a reason why
unionisation is not necessary.
83Jo Lynn Sheane, “Documentary on the move to unionize Wal-Mart,” CBC News: Dateline, August 2003, http://winnipeg.cbc.ca/regional/servlet/View?filename=mb_walmartdecision20030819
There is no employee unionisation
at any of Wal-Mart’s approximately 3,600 stores in the USA, and the
same applies to Canada.
84Weinberg, Paul, “Labour: Closure of First Unionized Wal-Mart Sends Signal,” Inter Press Service News Agency (IPS), 15 April 2005, also at CorpWatch, 1 May 2005, www.corpwatch.org/article.php?id=12194
A complaint is reported to have been filed with the US
National Labor Relations Board85“The National Labor Relations Board is an independent federal agency created by Congress in 1935 to administer the National Labour Relations Act, the primary law governing relations between unions and employers in the private sector. The statute guarantees the right of employees to organize and to bargain collectively with their employers or to refrain from all such activity.” See http://www.nlrb.gov/nlrb/home/default.asp
86Barbaro, Michael and Joyce, Amy, ““Union Files Wal-Mart Complaint,” Washington Post 13 April 2005.
for breaking federal law by encouraging employees to inform against
colleagues who wish to join a union. Another source (
Bloomberg) has reported similar instances of the company
actively seeking to identify and obstruct employees who wish to
87Woolner, Ann, “Let me Count the Ways People Don’t Love Wal-Mart,” Bloomberg, 13 February 2004.ch
A number of news media, including the
Wall Street Journal, have also reported Wal-Mart’s former
vice-president Thomas M. Coughlin’s so-called “
union project” in which company funds were used to
obstruct the formation of trade unions and to pay employees to pass
on information about fellow employees who attempt to form such
88Bandler, James and Zimmerman, Ann, “A Wal-Mart Legend’s Trail of Deceit,” Wall Street Journal, 8 April 2005.
Several of Wal-Mart’s internal
company documents, including a book entitled “
Wal-Mart: A Manager’s Tool Box to Remaining Union Free,”89A copy of the book is posted at http://reclaimdemocracy.org/walmart/antiunionman.pdf .
are the object of a ruling by Canada’s Supreme Court, in which the
court ordered the company to surrender the book to the Labour
authorities in Saskatchewan province.
90Brieger, Peter, “Wal-Mart loses fight over ‘union prevention’ book – Supreme Court Ruling: Tried to shield documents from Sask. labor probe,” Financial Post, 8 April 2005.
The book refers to the company’s managers as “
the first line of defence against unionization”. The book
also describes how managers should contact the company’s “
union hotline” if they suspect that employees wish to
91Described inter alia by Jo Lynne Sheane, “Documentary on the move to unionize Wal-Mart,” CBC News: Dateline, 15 August 2003 http://winnipeg.cbc.ca/regional/servlet/View?filename=mb_walmartdecision20030819
Wal-Mart has refused to turn over the book to the Canadian
authorities referring to it as an internal document intended for
use in the USA which has never been used in Canada.
92Weinberg, Paul, “Labour: Closure of First Unionized Wal-Mart sends Chilling Signal,” Inter Press Service News Agency (IPS), 15 April 2005, www.ipsnews.net/africa/print/asp?idnews=28317
Violation of provisions concerning
the employment of minors in the USA
Although it is not the worst forms
of child labour that have been reported with respect to the
company’s operations in North America, there is information at hand
on a number of violations of provisions governing the employment of
In 2000, the company was fined
93The fine was USD 205,000.
for violations of child employment provisions at all 20 Wal-Mart
stores in the state of Maine.
94Greenhouse, Stephen, “Wal-Mart agrees to pay fine in child labor cases,” New York Times, 12 February 2005.
In 2004, it was reported that Wal-Mart’s own audit showed, after
scrutiny of 128 stores, 1,371 instances of minors working too late
in the evening, working in school hours or working too many hours
per day. Earlier this year 2005, Wal-Mart decided to conclude a
settlement in the lawsuit to avoid prosecution for violations of
federal laws governing child employment in the states of
Connecticut, New Hampshire and Arkansas.
95See footnote 94. The
settlement encompassed 24 different instances in which employees
under the age of 18 had operated dangerous implements and machines.
As part of the settlement, Wal-Mart has undertaken not to employ
persons under the age of 14 and not to allow employees under the
age of 18 to operate cutting machines.
96See footnote 94.
Mandatory overtime without
Wal-Mart is involved in a number of
civil lawsuits in the USA. According to the
Wal-Mart Litigation Project, the company currently faces
38 different lawsuits in 30 states.
97The purpose of Wal-Mart Litigation Project is to assist lawyers who institute proceedings against Wal-Mart on behalf of clients. This is done by gathering and exchanging information on the legal aspects and the outcome of actions brought against the company. See www.wal-martlitigation.com .
A recurrent theme of the lawsuits is that the company
systematically compels employees to work unpaid overtime. Wal-Mart
is alleged to have withheld overtime payments to increase the
98The Council has gained access from a US law firm to case documents of a forthcoming lawsuit against Wal-Mart. In the Council’s archives.
Moreover, a lawsuit against Wal-Mart in the state of Oregon is
reported to have established that the company had coerced hundreds
of local employees into working unpaid overtime, and that it did so
after pressure by the company’s central management.
99Goldman, Abigail and Cleeland, Nacy, “An Empire Built on Bargains Remakes the Working World: Wal-Mart is so powerful that it moves economies of entire countries, bringing profit and pain. Prices can’t be beat, but the wages can,” Los Angeles Times, 23 November 2003. Pulitzer Prize Winner: www.pulitzer.org/year/national-reporting/works/walmart1.html
Use of illegal labour in the
It is reported that in 2003, the US
authorities arrested 250 immigrants without valid residence permits
who were working illegally in 60 Wal-Mart stores in 21 states in
100Greenhouse, Stephen, “Illegally in U.S., and never a day off at Wal-Mart, New York Times, 5 November 2003.
These illegal immigrants, all of whom were engaged in cleaning,
were chiefly employed by suppliers who apparently have also
violated other laws and regulations governing work conditions.
101See footnote 97. In
Zavala, et al. vs. Wal-Mart Stores Inc., some of these
immigrants brought action against Wal-Mart alleging that the
company, together with its contractors, was “
engaged in and profited from a nationwide fraudulent
102The Council has gained access from a US law firm to case documents of a forthcoming lawsuit against Wal-Mart.
and that “
Wal-Mart is and was fully aware of and acted to aid and abet
the rampant violations of federal and state law by the Contractor
103See footnote 97. The case
ended in a settlement in March 2005 in which Wal-Mart agreed to pay
USD 11 million.
104“Wal-Mart Agrees to $ 11 Million Settlement in the Illegal Foreign Janitors’ Glass Action Lawsuit Holding Wal-Mart Liable for its Contract Janitorial Firms’ Violations of Federal Immigration and Labor Laws” (Zavala et al. v. Wal-Mart Stores Inc., U.S. D.Ct. N.J.), settlement reached on 18 March 2005. The illegal immigrants were employed by Wal-Mart’s supplier of janitor services. Wal-Mart was co-responsible for their illegal employment relationships. The company which had hired the personnel was prosecuted for criminal activity and fined USD 4 million. See also http://www.contingentlaw.com/ .