WASHINGTON (CNN) - Retail giant Wal-Mart will escape criminal sanctions but pay $11 million to settle claims stemming from a long-running federal investigation of illegal workers hired by the company's cleaning contractors, CNN has learned.Details would be nice...The settlement, scheduled to be announced Friday, also calls for $4 million in criminal forfeitures by 12 firms Wal-Mart (Research) hired to provide janitorial services, sources familiar with the agreement said.
The AP:
Many of the janitors from Mexico, Russia, Mongolia, Poland and a host of other nations worked seven days or nights a week without overtime pay or injury compensation, said attorney James L. Linsey. Those who worked nights were often locked in the store until the morning, Linsey... (who is representing the workers in a civil suit against the company that is still pending in New Jersey).Note that WM had not been accused of not paying FICA or medicare taxes on these employees.
According to Reuters , WM will hold a news conference later to tell us blah blah blah.
UPDATE: Only lower management knew:
"We reiterate, as we have from day one, that our senior management team knew nothing about the employment practices of the contractors until the government contacted us seeking out cooperation," said the spokesman, Gus Whitcomb.
UPDATE 2: Marketwatch says that we need to at least double the $11million figure:
Wal-Mart spokeswoman Mona Williams said the company considers the settlement "a lot of money" that will go "to help support enforcement of immigration laws." Wal-Mart also has put in place new initiatives aimed at preventing future problems.The company told reporters it had not yet calculated the cost of those programs. But it could be lot more than the settlement amount.
"It may be that the fine itself is only a small part of the cost. There is a pretty major oversight system the company is going to have to develop," said Greg Siskind, an attorney who specializes in immigration law at Siskind Susser in Memphis, Tenn. "For a company the size of Wal-Mart to put in the kind of system that is in this decree will cost well in excess of $11 million."
LAST UPDATE: Of course, Wal-Mart's press release reads like a wonderfully prepared news article (this is how things are "supposed to" be done):
WAL-MART, GOVERNMENT SETTLE IMMIGRATION INVESTIGATION
No Criminal Charges Filed Against Company or its Associates
BENTONVILLE, Ark., March 18, 2005 � Wal-Mart Stores has resolved on a civil basis the Department of Justice�s more than four-year-long investigation into the employment practices of its former floor-cleaning contractors. The agreement came after the government concluded its criminal investigation and announced it would not pursue charges against Wal-Mart or any Wal-Mart associates.
As part of this civil settlement, Wal-Mart has agreed to support the fair enforcement of immigration laws, including making a payment of $11 million to the government.
�The government can now use the funds for training and other initiatives that lead to better detection and prosecution of individuals and companies that prey on undocumented individuals,� said Tom Mars, Wal-Mart�s general counsel. He went on to emphasize that all businesses have a responsibility to remain vigilant.
�Today we are acknowledging that our compliance program did not include all the procedures necessary to identify independent floor cleaning contractors who did not comply with federal immigration laws,� Mars said. �We will use this as an opportunity to improve and be a better, more tightly run business as a result.�
Wal-Mart has already begun building stronger internal controls into its contractor review process. The company has also instituted a policy that requires floor cleaning at its domestic stores to be done by Wal-Mart associates.
The civil consent decree and settlement documents between Wal-Mart and the government read in part:
� �� enforcement actions undertaken by Special Agents of the Immigration and Naturalization Service, and its successor agency, Immigration and Customs Enforcement, against floor cleaning contractors performing cleaning services at various Wal-Mart stores in the Middle District of Pennsylvania and elsewhere documented that independent contractors used by Wal-Mart to provide floor cleaning services were knowingly hiring, recruiting and employing [undocumented workers] in violation of Title 8 ��
� �� Wal-Mart did not have knowledge, at the time the independent contractors initially were hired, that the independent contractors knowingly hired, recruited or employed [undocumented workers] in violation of Title 8 ��
� �� following a thorough investigation, the United States concluded that federal criminal proceedings involving Wal-Mart, its directors, officers or [associates] would not be appropriate ��
Posted by Kevin on March, 18 2005 at 11:25 AM
