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Wal-Mart Strikes Back
· Tuesday, July 20, 2010
It's quite a role reversal: The feds are complaining about getting dragged into court, having to file time-consuming paperwork, and generally being treated like any taxpayer who get crosswise with the IRS.
It seems Wal-Mart, the 800-pound gorilla of retailers, is challenging a fine in connection with the death of a clerk at one of its stores on Long Island, who was trampled to death the day after Thanksgiving of 2008. The poor guy was overrun by a crowd -- or rather mob -- rushing into the store for the biggest shopping day of the year.
As a result, Wal-Mart was fined $7,000 by OSHA, the federal job-safety agency. The company also settled a case with local prosecutors, and has taken all kinds of precautions on its own to assure that such a thing never happens again, adopting new crowd-control standards for all its outlets in this country. (Once again, hindsight has proven 20-20.)
Wal-Mart has also done something else, and that's what's got the feds riled. At last estimate, Wal-Mart had spent more than a million dollars fighting this relatively modest $7,000 fine, claiming no one could have foreseen the danger at the time, and that it's being punished for violating an arbitrary standard that didn't exist at the time. Ex Post Facto is the lawyerspeak for it.
What's more, according to Wal-Mart, the citation from OSHA "has far-reaching implications for the retail industry that could subject retailers to unfairly harsh penalties and restrictions...."
What's so new about a federal agency's imposing still more rules and regs on the supposedly private economy? This: Wal-Mart has the resources to fight back. It may be the only outfit in the country with more lawyers in its employ than this branch of the Labor Department. And they stay busy. For once the feds seem to have picked on an outfit their own size, if not bigger. And OSHA doesn't like it, not at all.
The federal agency claims its precious time is being eaten up by Wal-Mart's legal maneuvers. Officials at the Department of Labor say that, over the past five months, 17 percent of the available attorney hours in its New York office have been devoted to this one little case, or the equivalent of five full-time lawyers.
Tell us about it. This kind of draining distraction may be new for OSHA, but private employers have to live with the threat of lawsuits every day.
It's apparently a first for OSHA: No one there can remember such a thing happening before, at least in a case where the fine was less than $10,000. By now Wal-Mart has filed at least 20 motions in these protracted proceedings, and sources at OSHA say the retail giant has spent more than $2 million fighting this single citation. Much to OSHA's consternation. Its people have an agency to run, you know, and lots of other things to do besides reply to Wal-Mart's stream of court filings.
The feds' complaint isn't exactly novel. It's just the source that's new. The complaint itself will sound familiar to any business that has ever found itself in the toils of the federal bureaucracy, and lost in a fog of rules, regulations and administrative diktats. And obliged to hire lawyers by the gross.
But now the tables have been turned, and it's the feds who are frustrated and flustered. They sound fit to be tied. In red tape. Why is Wal-Mart picking on them? Why is it doing this? This is intolerable. Why, it's the reverse of the natural order of things!
You'd think OSHA would have its hands full just now investigating industrial accidents around the country instead of feuding with Wal-Mart over a freak accident, however horrifying. But now and then a private company will have the resources -- and will -- to stick up for itself.
Wal-Mart tends to go all-out in such instances, whether challenged by a frivolous lawsuit or some bureaucratic annoyance. Its stance in these matters is much the same as Winston Churchill's during the Blitz: Never give in. Never, never, never, never. Not on a matter of honor or principle.
Whatever one thinks of the legalities involved in this dispute, there's no denying the irony of it. Or the justice. The regulators suddenly find themselves regulated, or at least challenged. The mystification of the Labor Department -- why is this happening to us? -- would be familiar to any harried businessman, or just taxpayer, who's forced to hire a platoon of lawyers, with a squad of CPAs to back them up, to defend his rights.
A lone businessman would need all the help he could get to thread his way through this bureaucratic maze, at the end of which there might be only a federal Minotaur waiting to gobble him up. Assets and all. If there were any assets left after all the legal fees were paid.
Remember George McGovern? He was the Barack Obama of his day, only he wasn't elected president. By overwhelming popular demand. As the Democratic presidential nominee in 1972, he succeeded in coloring just about the whole electoral map Republican red. The lone exceptions were true-blue Massachusetts and the District of Columbia.
In his later years, Mr. McGovern would retire from politics and buy into a bed-and-breakfast up East, but it was no more successful than his presidential campaign. When it went bust in the early '90s, he blamed not just a recession but the trouble and expense of dealing with all those state, federal and local regulations -- not to mention having to fend off frivolous lawsuits. The grand old man of American liberalism would wind up singing the businessman's blues. Looking back on his mercifully brief time in the private sector, he would write:
"It's been 11 years since I left the U.S. Senate, after serving 24 years in high public office. After leaving a career in politics, I devoted much of my time to public lectures that took me into every state in the Union and much of Europe, Asia, the Middle East and Latin America. In 1988 I invested most of the earnings from this lecture circuit in acquiring the leasehold on Connecticut's Stratford Inn. Hotels, inns and restaurants have always held a special fascination for me. The Stratford Inn promised the realization of a longtime dream to own a combination hotel, restaurant and public conference facility -- complete with an experienced manager and staff.
"In retrospect, I wish I had known more about the hazards and difficulties of such a business, especially during a recession of the kind that hit New England just as I was acquiring the inn's 43-year leasehold. I also wish that during the years I was in public office I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender."
Once again, there are those in the forefront of public life who think that the magical solution to all the country's fiscal ills lies in just taxing business more, in having "the rich" pick up the tab for the rest of us, and slapping still more regulations on businesses as small as the family-owned company in a little town or as vast as worldwide Wal-Mart.
So long as somebody else is paying for it, spare no expense! Let no profitable enterprise alone, and keep issuing citations it would cost too much for the average business to challenge. But something strange is happening on the way to the usual You Can't Fight the Feds conclusion of this familiar story: Wal-Mart is fighting back.
Legal fees that eat up the budget? Never-ending litigation? That's for private enterprise to worry about, not government operations. But something tells me that at least some federal bureaucrats are beginning to know what it feels like.
(c) 2010 TRIBUNE MEDIA SERVICES, INC.
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JTG
As a small business owner, I'm glad to see that someone can take on the bureaucrats. This not only includes OSHA but all the way down to the city level. There are so many forms of taxes and so many regulations that I'm wondering why I ever opened up a business. Land of the free? Hardly.
Posted July 20, 2010 at 8:56:02 AM
kevin
I don't shop at Walmart for my own reasons, but in this instance I stand behind them - Go Walmart!
Posted July 20, 2010 at 10:54:42 AM
Carlos
And I DO shop at Walmart for my own reasons and I also stand behind it--Go Walmart!
Posted July 20, 2010 at 11:19:32 AM
Sandra
Wow! Walmart is regaining my respect! Let the government have a taste of their own medicine.... I feel like running down to the closest Walmart to buy something.
Posted July 20, 2010 at 11:21:03 AM
Joel
If people knew what Wal-Mart stands for, they would always go and buy there. Sam Walton started Wal-Mart so that the "little" guy could have the things that the rich have at a reasonable price. He wanted the everyday people to have the things of the wealthy at a price everyday people could afford.
Wal-Mart has always had my respect and now they have even more. Don't get me wrong, I hate shopping there, not because I hate Wal-Mart but because it is always so dang busy.
Posted July 20, 2010 at 12:22:10 PM
Paul Rodriguez
Kudos, kudos, kudos! Ordinarily I'm not a great fan of WallyWorld, but in this case I must cheer for them. Somewhere, Kafka is smiling.
Posted July 20, 2010 at 12:23:07 PM
Caleb
I don't shop at Wal-mart, for my own reasons, but this has them regaining some respect in my book. I hope that they stick this thru till the end, following Churchill's advice. Perhaps I will need to re-evaluate my opinion on Wal-mart.
Thank you Wal-mart.
Posted July 20, 2010 at 12:29:08 PM
Caseace
McGovern's comments lead me to the idea, while Obama and his ilk like the thought of having our youth dedicate a year or two of public service for the good of the country and also to offset gov't financed school debt, how about politicians dedicate the same time to working at a real job! This Obama administration has the abysmal record of less than 10% of its cabinet having ever participated with a job in the private sector! Is it any wonder that our economy is going down the toilet? Like McGovern they don't have a clue.
Posted July 20, 2010 at 12:33:31 PM
Gaudium
It is refreshing to see someone take on our government bureaucrats who sit and judge everyone else and think they are free to do as they wish. GO Wal-mart, I will shop at Wal-mart from now on.
Posted July 20, 2010 at 1:32:13 PM
Michael V
@Joel - Except Sam Waltom and his family no longer run Walmart, it i sjust another corporation concerned about only one thing maximizing profits. That is why 70% of what Walmart sells is manufactured in China now, instead of the USA when Sam Walton ran the company. You did not see Sam Walton exploit rules governing shipping either, where they state their their cargo was pirated at sea, get paid by the insurance company, yet the lost cargo happens to find its way to the shelfs. Sam Walton was honorable, the bums runnign Walmart today are not. That is why I do not shop there anymore, and will not until they start selling more made in America products and treating their employees better, and quit shutting stores down once the employees vote to unionize.
Posted July 20, 2010 at 1:43:51 PM
don B
I'm retired now but when I was in business was ANNOYED by OSHA when I had the mis-fortune of hanging a fire extinguisher too low for their liking. Just because it was at a convenient height for all there to grab it didn't fit their rules. To end a seeming endless contest of words we moved it. While I,m certainly not a big fan of Walmart I do shop there from time to time. I will reconsider my opinion of them and hope they continue the fight without one drop of remorse for the
Posted July 20, 2010 at 3:40:17 PM
Burl McCullough
While the corporate management of Wal-mart may have strayed from Sam Walton's policy of buying American products whenever possible and sometimes MAKING that possible, they undeniably remain the low price leader in every category they enter. Except for clothing, they have mostly the same products from the same companies as any other store and they sell it cheaper because of volume. Yes, much of their clothing is from China. If you don't like that, go to Macy's or some other store and buy clothing made in Viet Nam or Bangladesh. Get used to it, the American clothing industry was killed by unions and the government years ago.
I am happy that Wal-mart has the capital to fight the government on this issue. Maybe the precedent set by this case will protect some of those retailers who are not able to fight the government for themselves. It costs money to prove in court that, as it says in the Constitution (tenth amendment) that the federal government has only LIMITED powers as defined within the Constitution, not unlimited powers as decided by Congress or the bureaucracy.
As for shopping there... only whenever I need anything.
Posted July 20, 2010 at 3:54:26 PM
HawkWatcher
"I wish I had known more about the hazards and difficulties of such a business, especially during a recession..." The Washington elites of today need to learn this.
This is why conservatives are winning primaries over Republican-backed candidates, and why we must keep supporting them individually. They will fight for real job creation by working to remove federal red-tape barriers and senseless regulations that curtail entrepreneurs.
Posted July 20, 2010 at 4:50:30 PM
hulia
Go Walmart! Thanks for giving big government some back!
Posted July 20, 2010 at 5:58:20 PM
EggsAckley
@Michael V - I fully understand Wal-Mart's decision to close a store instead of allowing them to unionize. They're big enough to be able to do so, and obviously they have the will. The unions have completely destroyed America's ability to manufacture while competing in a global marketplace. Wal-Mart would be just another failing department store if it wasn't for imports. Unfortunately, a lot of what they import are from former U.S. based companies who decided long ago it was more profitable to leave and set up shop elsewhere rather than concede to union extortion. There was a time and place for unions, back in the 30's. They're completely irrelevant anymore, they're too concerned about protecting their dues-paying members and getting all the blood they can draw from the hand that feeds them. Might be good for the employee, but not so good for America. Hence, it costs an average of $72 an hour to build a GM vehicle, while a southern non-union foreign car plant can make a better product for around $47 an hour. That means that approximately the first $2000 you pay for a GM car goes to pay for union extorted demands.
Another union scenario as to how they completely rip-off the consumer is in my own family. I have a sister-in-law that has worked as a cashier for the Safeway grocery chain for about 30 years. She has no marketable job skills other than passing groceries over a scanner, something they could train a chimp to do. Because of the preposterous union seniority rules, she now makes $24.00 an hour. At best a high school kid should be making about $7.50 an hour doing the same job. From what I can tell, Safeway has done everything in their power to get rid of her or make her quit because of her demonstrated lack of social skills and general ineptitude, for at least 20 years now, but the union backs her up every time. I understand her fears, for if not for this job, she'd be living under a bridge overpass in a refrigerator box. Next time you bitch about that $5.00 box of cereal, you'll know why it's so expensive.
Posted July 20, 2010 at 6:34:33 PM
mike
@ michael v....you are wrong sir..Sam has died, that is true but it is run by the Walton family who own the majority of the stock. The company is publicly traded but it still run by the family.
True, most things sold by Walmart, Sear, Kmart, or any other large store (and most small ones) are made in other countries because they are no longer made here in the USA.. You can't blame the retailer because the manufacture went overseas and the product is no longer available from an American manufacture.
Back to the original thread..Go Walmart. Keep sticking your thumb in OSHA's eye. Next time stick it in the EPA's eye...
Posted July 20, 2010 at 6:40:05 PM
randyduton
I took on OSHA a few years ago because of policies they don't tell the public.
First, they claim in writing (I have the original letter) they don't have jurisdiction of Material Safety Data Sheets (MSDS) posted on corporate websites. For those in safety, the MSDS is the single most important document to protect a worker and the public using a chemical product. Failure of OSHA to have jurisdiction has allowed some companies to falsify their posted MSDSs to claim their products are safer than they are.
Second, OSHA did not take action against an Area Director who illegally provided complainant information to the chemical company, and claimed he hadn't when documents proved he had.
Third, based upon a single written whistleblower complaint of a trained QA official within the chemical company, OSHA refused to investigate toxic working conditions, and the deaths of two workers who had died of liver disease, while working in a chemical company until the whistleblower could get two other workers to file complaints.
Posted July 20, 2010 at 8:03:02 PM
Garth Penglase
Government is now playing God. However unlike God, they have no real concern for the people, but are there solely to propagate further government. Not in favour of multinationals, but in these days of massive bureaucracy we need them to remain free, otherwise we ould be at the mercy of tyrannical government. Go Wal-Mart!
Posted July 20, 2010 at 9:20:30 PM
Howard Reed
Now I know why Wally World is my favorite store. I am not a store person, but I have always liked looking around and purchasing at Wal-Mart.
Gumption is gumption and my homey Sam Walton, God rest his soul ingrained in his management team that fair is fair. Our government doesn't like people to fight back. You go Wally World.
You should be an example to the smallest among us, that David's still take on Goliath's and oft times defeat them. I would highly recomment the Tea Party movement start carrying the Wal-Mart banner.
The Turban Torpedo
Posted July 20, 2010 at 9:24:31 PM
Wally World
Now sing along with me .... da da da ta Wally World, all my money goes to Wally World!
Posted July 21, 2010 at 12:18:40 AM
Robert Davidson
I do not shop at Walmart. Never. Praise them all you want, never, never, never. Walmart lowballs their bids so much the manuf is forced to go elsewhere. I agree big gov and unions are partly to blame with onerous regs and unfair wgaes and bennies, but the fact remains that Walmart began yrs ago to force their vendors overseas with their business practices. There is an excellant PBS documentary about this. Focusing on Walmart lowballing Rubbermaid, their bankruptcy, and the subsequent purchase of Rubbermaid manuf equipment at auction by Chinese companies.
That is why the Rubbermaid products you but today are made in China.
Singer sewing machines bought at Walmart have no warranty. They are made with plastic gears instaed of steel, to meet Walmart purchase demands.
That new Walmart store you shop in? Very likely they denied payment to the small contractors at the end, for no good reason other than to keep the money. They know the small business cannot afford expensive litigation.
And don't forget the negative impact on local Mom and Pop stores and businesses. They cannot compete, their employees get laid off, and have nowhere to go but Walmart for work, as they now have a monopoly. There they work fewer hours, thus have no medical insurance, causing a drain on other citizens.
This example of them fighting OSHA is a perfect example of predatory business practices.
Try to focus on the fact that one of their employees is dead. They were found at fault and fined. Just because you have some heartburn with the Federal Government is no reason to cheer them on.
Posted July 21, 2010 at 6:32:11 AM
Michael V
@EggsAckley - It is obvious you know absolutely nothing about the American workplace and car manufacturers. Foreign manufacturers located in the US pay their workers a higher hourly wage than the Big 3 pay theirs, the difference being the benefit package the Big 3 workers receive versus the foreign companies offer (which is not much of one). Also, the foreign companies are given the land for free and are given huge tax breaks that the Big 3 do not get, which helps off set the cost of doing business. As for the quality of the products, hello McFly, where have you been lately, living in a cave? Have you not heard of the 10 million cars that Toyota has recalled so far, and that number seems to be growing. The American cars top the quality charts across the board in all categories. You are just one of the many who do not do you research and believe everything you hear. Also, Clinton created the environment that destroyed American manufacturing by signing NAFTA and other free trade agreements, when we are the only country that abides by free trade principles. This is why it is hard to find made in America products, but if you open your eyes, you can. Did you know that Visio is an American company, that Curtis Mathis is back making televisions in Texas, not China! Did you know one of the largest computer memory manufacturers in the world is an American company called Patriot, and they manufacture their memory here? You can find just about any product made here if you look for it, just not at Wal-Marts though.
Posted July 21, 2010 at 10:14:33 AM
TRACY
Go Michael V!!!
Posted July 21, 2010 at 12:14:07 PM
Rebecca( H Dickey)
way to go Wal-Mart forever! way to go Michael V; way to go PatriotPost.........
Posted July 21, 2010 at 1:12:37 PM
mike
Walmart can't be held responsible for the damage that unions have done to this country. Unions have outlived their usefulness years ago. Walmart is a perfect example of finding a need and filling it, and rather well I mght add. If Mom and Pop can't compete then they need to find another area of expertise. Walmart provides jobs to the economies they have entered, and I don't buy the story that they put everyone else out of business. I've looked and it just isn't so. What I have found, is that those who are yelling the loudest are the overpaid union members and those who weren't quite smart enough to make the required changes when Walmart arrived in their town. As for Walmart taking on the Feds, OOORAHHH Walmart.
Posted July 21, 2010 at 3:14:59 PM
TJS
We are now living in:
Government of the government, by the government, for the government.
Posted July 21, 2010 at 4:34:04 PM
Gloria
I find Walmart overcrowded and annoying but I continue to shop there because of the values the company is known for. Now I will shop there even more often. Money talks!
Posted July 21, 2010 at 8:47:38 PM
Francis Kohl
It seems someone at Walmart has read Heinlein's "The Man who Sold the Moon". In this novel, the main character, an entrepreneur, advises his company's board to settle a reasonable lawsuit while vigorously fighting a nuisance suit, "or else every double-yolked egg in the country will be blamed on us". Kudos to Walmart for fighting the Feds.
It's too bad that the Feds' predictable response will be to hire more lawyers and further vampirize the taxpayers and job creators. A pox on their house.
Posted July 21, 2010 at 11:14:57 PM
wntforit
Hat off and a bow to Michael V! Eggsactly! Once heard a (union) driver ramping the CB about buy American. Talkin on a Jap radio, driving a Canada made truck, reading time on his Jap watch, truck riding on French tires---but M V is correct. With a little effort you can buy American. Thought I did, RCA--nothing more American, hmmm? Putting the radio in the truck, read a label; manufactured in Belgium from parts made in Mexico. But, I tried. Peace.
Posted July 22, 2010 at 12:02:05 AM
Lem
Bravo!!!!
And this coming from a mega-store that is always busy w/ 20something cash registers but only has 2 or 3 open . GO WALMART !!!
Posted July 22, 2010 at 2:43:23 PM