A Handshake With Sam

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					          A Handshake With Sam
   “As our nation’s largest employer and most financially successful company, Wal-Mart is a
  singular American institution. It occupies a unique position in our world by virtue of its size,
 reach and responsibility for the livelihoods of millions of workers and the needs of billions of
consumers. And with such overwhelming influence comes certain moral responsibilities. It is the
          acceptance or rejection of those responsibilities that determines greatness.”

    Wal-Mart has more than 3,856 stores in the United States – more than one Wal-Mart for
     every single county in the country and one for every 78,000 Americans. [Securities and
       Exchange Commission, Wal-Mart form 10-K, filed 3/29/06, [Charles Fishman, The Wal-Mart Effect, 2006]

    Wal-Mart operates more than 6,000 stores worldwide. As of January 31, 2006,
     Wal-Mart operated 1,209 Discount Stores, 1,980 Supercenters, 567 SAM’S CLUBs and
     100 Neighborhood Markets in the United States. Internationally...the company operated
     units in Argentina (11), Brazil (295), Canada (278), Germany (88), Japan (398), Mexico
     (774), Puerto Rico (54), South Korea (16) and the United Kingdom (315). They also
     operated 56 stores through joint ventures in China. [Securities and Exchange Commission, Wal-
       Mart form 10-K, filed 3/29/06]

    In Fiscal Year 2006, Wal-Mart reported a total net sales of $312.4 billion
       [Securities and Exchange Commission, Wal-Mart form 10-K, filed 3/29/06]

    Wal-Mart is the largest retailer in the United States, Mexico and Canada. They
     sell more groceries than any company in the world. [Charles Fishman, The Wal-Mart Effect,
       2006]

    Fifty-three percent of all Americans live within five miles of a Wal-Mart store
     and 90% of all Americans live within 15 miles of a Wal-Mart. [Charles Fishman, The Wal-
       Mart Effect, 2006]

    Wal-Mart is as big as Home Depot, Kroger, Target, Costco, Sears and Kmart
     combined. [Charles Fishman, The Wal-Mart Effect, 2006]

    Wal-Mart is the largest corporate employer in the United States and employs 1.8
     million people around the world. [Charles Fishman, The Wal-Mart Effect, 2006;
       http://www.walmartfacts.com]

    More than 138 million customers visit Wal-Mart each week. [http://www.walmartfacts.com]

    If Wal-Mart were a country, it would rank 20th in gross domestic product, ahead of
     Austria, Poland and Turkey. Based on GDP, the retailer rakes in more annual revenue
     than South Africa and Finland combined. [Telegraph Herald, 3/6/05]

    If Wal-Mart were a country, it would rank as China's 8th largest trading partner,
     ahead of Russia, Australia, and Canada. [China Business Weekly, 12/2/04]
                                                    1
                             PLEDGE #1: RESPECT HUMAN DIGNITY

Sam Walton: “If you want people in the stores to take care of the customers, you have to make
                   sure you are taking care of the people in the stores.”

    “Wal-Mart will aggressively work to ensure that employees are never mistreated through
     practices such as illegal firings, “off-the-clock” wage violations, intimidation, sexual
           harassment, violations of child labor laws, or discrimination of any sort.”

Wal-Mart Repeatedly Fined for Violating Family Leave Laws. Wal-Mart has received
numerous fines for violating the Family and Medical Leave Act in locations all over the country
- firing workers while on federally protected medical leave. In addition, in 2005, Wal-Mart was
fined $188,000 by the California Fair Employment and Housing Commission for violating
California state law when it refused to reinstate a woman after she completed her maternity
leave. [U.S. Department of Labor, via Freedom of Information Act; California Department of Fair Employment
and Housing, case no. E 200203 M-0774-00-pe, C 03-04-026; Sacramento Bee, 6/14/05]

Wal-Mart Repeatedly Found Guilty for Forcing Its Employees to Work Off-the-Clock. In
2000, Wal-Mart paid $50 million to settle a lawsuit that involved 69,000 workers in Colorado
who had allegedly been forced to work off-the-clock. In 2002, a federal grand jury in Oregon
found Wal-Mart employees were forced to work off-the-clock and awarded back pay to 83
workers. In December 2005, Wal-Mart was ordered to pay $172 million to 116,000 current and
former California workers for violating a 2001 state law that requires employers to give 30-
minute, unpaid lunch breaks to employees who work at least six hours. Nationally, Wal-Mart has
53 class action lawsuits alleging wage and hour violations. [New York Times, 11/19/04; Associated
Press, 2/17/04; Associated Press, 9/19/05; Associated Press, 12/22/05]

Wal-Mart Hired Illegal Immigrants to Work Off-the Clock. Wal-Mart paid $11 million to
settle a federal investigation called “Operation Rollback,” which found hundreds of illegal
immigrants working off-the-clock cleaning stores. In 2003, federal agents raided 61 Wal-Mart
stores and arrested 250 illegal immigrants. [Washington Post, 3/19/05; Los Angeles Times, 10/24/03]

Wal-Mart’s Own Audit Found Work Breaks Not Provided. In 2000, an internal Wal-Mart
audit found that of 128 stores, 127 of them were “not in compliance” with company policies
providing for work breaks. [Indiana Lawyer, 5/7/03]

Wal-Mart Fined For Violating Child Labor Laws by Allowing Teens To Work In Unsafe
Conditions. In January 2005, Wal-Mart reached a settlement with the United States Department
of Labor for violations pertaining to the Fair Labor Standards Act, after being investigated in 27
stores in three states for violations of child labor regulations. Wal-Mart paid a $135,540 fine
after the investigation found that the company allowed 85 workers, aged 16 and 17, to participate
in activities “including loading and occasionally operating or unloading scrap paper balers, and
operating fork lifts.” Wal-Mart also signed an agreement with the Department’s Wage and Hours
Division regarding future child labor conditions. [U.S. Department of Labor Press Release, 2/14/05]


                                                         2
Inspector General Found Child Labor Deal Included Significant Concessions to Wal-Mart.
An audit by the Office of Inspector General (OIG) of the child labor agreement between Wal-
Mart and the Department of Labor found “serious breakdowns in the WHD [Department of
Labor’s Wage and Hour Division] process for negotiating, developing, and approving such
agreements. These breakdowns resulted in the WHD entering into an agreement that gave
significant concessions to Wal-Mart. Specifically, the agreement provided for advance
notification by WHD of Wal-Mart investigations, and gave Wal-Mart the ability to avoid civil
money penalties (CMP) under certain conditions. In exchange, the agreement primarily
committed Wal-Mart to continue measures that were already in place or required by law. Also,
WHD did not consult with the Office of the Solicitor (SOL) in developing and approving the
agreement.” Connecticut Attorney General Blumenthal said, “This report constitutes an
unexpected and virtually unprecedented indictment of the U.S. Department of Labor's sweetheart
deal with Wal-Mart. [It] should lead us to be more vigilant and vigorous in enforcing our state
child protection laws.” [U.S. Department of Labor, Office of the Inspector General, Office of Audit, 10/05;
Hartford Courant, 11/1/05]

Wal-Mart Subject of Largest Workplace-Bias Lawsuit in U.S. History. In June 2004, U.S.
District Court Judge Martin Jenkins granted class action status to 1.6 million current and former
female Wal-Mart employees who allege that Wal-Mart systematically paid women less and
offered women fewer opportunities for promotion. [Dukes v. Wal-Mart Stores, Inc., No. C01-02252 MJJ
(U.S. District Court for the Northern District of California)]

Study Shows Women Earn Less and Hold Fewer Senior Positions at Wal-Mart. In 2003, Dr.
Richard Drogin, Professor Emeritus from California State University, conducted a study on the
wages of female employees at Wal-Mart. Among his key findings were that: women hourly
workers earn up to 37 cents less per hour than their male counterparts; female managers earn
nearly $5,000 less than male managers in yearly salary; women comprise 72 percent of Wal-
Mart’s total workforce, but only 33 percent of its managers; and women comprise 92 percent of
Wal-Mart’s cashiers, but only 14 percent of Wal-Mart store managers. [Wal-Mart Class, Plaintiff’s
Expert Dr. Richard Drogin’s Statistical Report, http://www.walmartclass.com/staticdata/reports/r2.pdf; New York
Times, 12/30/04]

Wal-Mart Failed to Follow Recommendations to Improve Status of Women Employees.
According to a report by Bloomberg, “Wal-Mart Stores Inc. took no action on internal warnings
seven years ago that it was falling short in promoting women, documents in a federal sex-
discrimination lawsuit show. The world’s largest retailer didn’t carry out the 1998
recommendations of a diversity task force and disbanded the panel, according to company
memos, reports and depositions filed in the case. Two years later, Wal-Mart had a reduced
percentage of female managers.” [Bloomberg News, 7/15/05]




                                                           3
Wal-Mart Received a C- From NAACP on Business Practices. Wal-Mart received a C- grade
on the NAACP’s 2005 Economic Reciprocity Initiative (ERI) industry report cards which grade
major corporations on their business practices with respect to the African-American community.
NAACP Interim President & CEO Dennis Courtland Hayes said: “The report cards are a good
indicator for the NAACP to measure efforts or the lack thereof of major corporations in the areas
of hiring, promotion, procurement, philanthropy and marketing.”
[http://www.naacp.org/news/2005/2005-07-12.html]

Wal-Mart Has Paid Millions To Settle Numerous Americans with Disabilities Act
Violations. In 2001, Wal-Mart paid $6 million dollars to settle 13 lawsuits, which alleged
widespread discrimination and violations of the Americans with Disabilities Act. Even after
settling these lawsuits, Wal-Mart continued to discriminate against Americans with disabilities.
For example, in 2004, the Equal Employment Opportunity Commission filed another lawsuit on
behalf of a Kansas City man confined to a wheelchair. [29 U.S.C. § 706 et seq;
http://edworkforce.house.gov/democrats/WALMARTREPORT.pdf; Business Journal, 1/20/04]

Jury Found Wal-Mart Employee with Cerebral Palsy was Discriminated Against. In 2002,
21-year old Patrick Brady, who suffers from cerebral palsy, was hired by Wal-Mart as a sales
associate in the pharmacy department. After one day in the pharmacy, he was reassigned to other
responsibilities, including collecting garbage and shopping carts from the parking lot. A Long
Island jury found that Wal-Mart discriminated against Brady when he was transferred and asked
impermissible pre-employment questions about his disability. The jury awarded Brady $7.5
million in damages and a judge ultimately awarded $2.8 million to Patrick Brady. [Associated Press,
2/24/05; Newsday, 3/24/05; New York Law Journal, 6/23/05]




                                                     4
                                 PLEDGE #1: RESPECT HUMAN DIGNITY

Sam Walton: “If you want people in the stores to take care of the customers, you have to make
                   sure you are taking care of the people in the stores.”

“Wal-Mart will justly compensate each associate with a family-sustaining wage that will enable
        the associate to raise a family without having to rely on public assistance.”

The Average Wal-Mart Worker’s Salary Leaves a Family of Four Below the Poverty Line.
A “full-time” employee at 34 hours per week, making the Wal-Mart average wage of $10.11 per
hour, will earn $17,874.48 per year. The federal government’s definition of poverty for a family
of four in the contiguous United States is $20,000. [http://www.walmartfacts.com; 2006 HHS Poverty
Guidelines, http://aspe.hhs.gov/poverty/06poverty.shtml]

Expansion of Wal-Mart Stores Has Led to 20,000 Families Falling Below the Poverty Level.
After carefully and comprehensively accounting for other local determinants of changes in
poverty, a recent study shows, “[T]he presence of Wal-Mart was unequivocally associated with
smaller reductions in family-poverty rates in U.S. counties during the 1990s relative to places
that had no stores…our results provide clear evidence that the spread of Wal-Mart stores during
the 1990s was associated with higher usage of food stamps per capita.” The study found that
nationwide an estimated 20,000 families have fallen below the official poverty line as a result of
Wal-Mart’s expansion. During the last decade, dependence on the food stamp program
nationwide increased by 8 percent while in counties with Wal-Mart stores, the increase was
almost twice as large at 15.3 percent. [Stephan J. Goetz & Hema Swaminathan, “Wal-Mart and County-Wide
Poverty,” Social Science Quarterly, June 2006]

Wal-Mart Employees Qualify for Numerous Public Programs at High Cost to Taxpayers.
According to a study conducted by the House Education and Workforce Committee’s
Democratic staff, a typical Wal-Mart store employing 200 people costs the American taxpayer
$420,750 a year – about $2,103 per employee. Specifically, the low wages result in the following
additional public costs being passed along to taxpayers: $36,000 a year for free and reduced
lunches for just 50 qualifying Wal-Mart families; $42,000 a year for Section 8 housing
assistance, assuming 3 percent of the store employees qualify for such assistance, at $6,700 per
family; $125,000 a year for federal tax credits and deductions for low-income families, assuming
50 employees are heads of household with a child and 50 are married with two children;
$100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify with
an average of 2 children; $108,000 a year for the additional federal health care costs of moving
into state children’s health insurance programs, assuming 30 employees with an average of two
children qualify; and $9,750 a year for the additional costs for low income energy assistance.
[http://edworkforce.house.gov/democrats/WALMARTREPORT.pdf]




                                                           5
Wal-Mart Admitted Many of Their Workers Rely on Public Assistance. A memo written by
Susan Chambers, Wal-Mart Executive Vice President for Benefits, for the Wal-Mart Board of
Directors, said: “We also have a significant number of Associates and their children who receive
health insurance through public-assistance programs. Five percent of our Associates are on
Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of
Associates’ children are on such programs, compared to a national average of 22 percent.” [Susan
Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New York Times, 10/26/05]




                                                    6
PLEDGE #2: PROVIDE QUALITY AND AFFORDABLE HEALTH CARE COVERAGE

     Sam Walton: “You can’t create a team spirit when the situation is so one-sided, when
              management gets so much and workers get so little of the pie.”

  “Wal-Mart will set a national example by ensuring that all employees – salaried, hourly, full-
 time and part-time - has quality affordable health insurance that fully covers the employee and
   their children…Wal-Mart will actively promote full-time employment for its employees and
                                  discourage part-time hiring.”

Wal-Mart’s Health Insurance Covers Fewer than Half of its Employees. According to Wal-
Mart’s own website, “In January 2006, the number of associates covered by Wal-Mart health
care insurance increased to 46%.” [http://www.walmartfacts.com]

Wal-Mart Health Insurance Coverage Lags Far Behind National Average. Nationally, 67
percent of workers in large firms (200 employees or more) receive their health benefits from
their employer. More than 80 percent of Costco workers are covered by their company plan.
[Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and
Educational Trust; New York Times, 10/24/05]

Wal-Mart Coverage is Neither Affordable Nor Accessible. Wal-Mart provides health care
options to their employees and families that have a deductible of $1,000 for individuals and
$3,000 for families. Wal-Mart employees must endure long waits to qualify for benefits: six
months for full-time employees and one year for part-time employees. [Wal-Mart 2006 Associate
Benefits Book; Wal-Mart Press Release, 4/17/06]

Wal-Mart Employees Still Wait Twice as Long for Health Care Coverage Than Workers at
Other Retailers. The Wal-Mart average for full-time workers to qualify for benefits is six
months, compared to the retail average of three months and the average waiting period for large
firms (200 or more workers) of 1.5 months. [Wal-Mart 2006 Associate Benefits Book; The (Montreal)
Gazette, 4/18/06; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health
Research and Educational Trust]

Wal-Mart’s Health Plan is Filled with Hidden Charges. The Wal-Mart 2006 Associate
Benefits Book details the specific policies of the Associate Medical Plan (AMP) and reveals that
the plan is filled with additional charges. Standard services – including office visit co-pays,
emergency room visits and ambulance services, per-event deductibles, and pharmacy co-pays –
are not applied toward the standard deductible. For example, in addition to the standard
deductible, a $300 pharmacy deductible must be reached, a $1,000 in-patient facility deductible
per visit must be paid, and a $500 out-patient surgical facility deductible per visit must be paid.
[Wal-Mart 2006 Associate Benefits Book, pp. 32 and 38]




                                                         7
Wal-Mart Workers Have Significantly Higher than Average Out-of-Pocket Premium
Costs. According to the Center for a Changing Workforce, in 2003, Wal-Mart employees paid
41% of insurance premium costs. At the time of the report, Costco employees paid about 10% of
premium costs. Nationally, workers today pay an average of 16% of premiums for single
coverage and 26% of premiums for family coverage. [Employer Health Benefits 2005 Annual Survey, The
Kaiser Family Foundation and Health Research and Educational Trust; Wal-Mart and Healthcare: Condition
Critical, Center for a Changing Workforce, 10/26/05]

Wal-Mart Spends Less on Benefits Than Other Corporations and Retailers. In September
2003, Wall Street Journal reported, “Last year, average spending on health benefits for each of
the company's roughly 500,000 covered employees was $3,500, almost 40% less than the
average for all U.S. corporations and 30% less than the rest of the wholesale/retail industry,
according to estimates by Mercer Human Resource Consulting, a unit of Marsh & McLennan
Cos.” [Wall Street Journal, 9/30/03]

Even Wal-Mart CEO Finds Wal-Mart’s Health Plan Complicated and Confusing. In a
speech before the National Governors Association, Wal-Mart CEO Lee Scott “conceded that one
of Wal-Mart's new efforts, the introduction of health savings accounts, had gotten off to a slow
start because setting up the accounts was ‘too complicated.’ He said he found the process
confusing and had not yet set up his own account.” [New York Times, 2/27/06]

Wal-Mart CEO Told Manager Who Questioned Health Benefits to Consider Quitting. “In a
confidential, internal Web site for Wal-Mart's managers, the company's chief executive, H. Lee
Scott Jr., seemed to have a rare, unscripted moment when one manager asked him why ‘the
largest company on the planet cannot offer some type of medical retirement benefits?’ Mr. Scott
first argues that the cost of such benefits would leave Wal-Mart at a competitive disadvantage
but then, clearly annoyed, he suggests that the store manager is disloyal and should consider
quitting.” [New York Times, 2/17/06]

Wal-Mart Has Admitted Many of Their Workers and Their Families Rely on Public
Programs. A memo written by Susan Chambers, Wal-Mart Executive Vice President for
Benefits, for the Wal-Mart Board of Directors, said: “We also have a significant number of
Associates and their children who receive health insurance through public-assistance programs.
Five percent of our Associates are on Medicaid compared to an average for national employers
of 4 percent. Twenty-seven percent of Associates’ children are on such programs, compared to a
national average of 22 percent (Exhibit 5). In total, 46 percent of Associates’ children are either
on Medicaid or are uninsured.” Chambers wrote, “Wal-Mart’s critics an easily exploit some
aspects of our benefits offering to make their case; in other words, our critics are correct in some
of their observations. Specifically, our coverage is expensive for low-income families, and Wal-
Mart has a significant percentage of associates and their children on public assistance.’’ [Susan
Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New York Times, 10/26/05]




                                                     8
In All States That Release Data on Companies Whose Employees Receive State-Funded
Health Care, Wal-Mart Tops the List. In 21 states, Wal-Mart leads the list of companies with
the most employees and dependents enrolled in state-funded health care programs. In all states
that have released such data - Alabama, Arizona, Arkansas, Connecticut, Florida, Georgia, Iowa,
Massachusetts, Montana, Nebraska, New Hampshire, New Jersey, Ohio, Pennsylvania,
Tennessee, Texas, Utah, Vermont, Washington, West Virginia and Wisconsin - Wal-Mart tops
the list. In Arkansas, where Wal-Mart’s own headquarters is located, 3,971 of Wal-Mart’s 45,106
employees are on public assistance.
[http://www.decaturdaily.com/decaturdaily/news/050223/medicaid.shtml;
http://www.azcentral.com/arizonarepublic/news/articles/0730ahcccs30.html; Arkansas Democrat-Gazette, 3/17/05;
http://aspe.hhs.gov/health/fmap04.htm; Associated Press, 3/3/05; http://www.huskyhealth.com/about.htm; St.
Petersburg Times, 3/25/05; http://aspe.hhs.gov/health/fmap04.htm; Atlanta Journal-Constitution, 2/27/04;
Associated Press, 3/4/05;
http://www.boston.com/news/local/massachusetts/articles/2006/02/01/thousands_of_workers_in_top_companies_rel
ying_on_taxpayer_funded_health_care/; Great Falls Tribune, 6/26/05; Omaha World-Herald, 10/19/05; Associated
Press, 5/12/05; http://www.njpp.org/rpt_familycare.html; http://jfs.ohio.gov/releases/EmployerReport.pdf;
Philadelphia Inquirer, 3/2/06; Chattanooga Times Free Press, 1/20/05;
http://www.goodjobsfirst.org/pdf/texaschip.pdf; Salt Lake Tribune, 2/5/06;
Vermont Guardian, 4/18/05; Seattle Times, 1/24/06; Charleston Gazette, 12/26/04; The Capital Times, 11/4/04;
Milwaukee Journal-Sentinel, 5/24/05; Arkansas Democrat-Gazette, 3/17/05]

Study Found that Wal-Mart is Causing an Increase in State Spending on Medicaid.
Michael Hicks, an economist at the Air Force Institute of Technology at the Wright-Patterson
Air Force Base in Ohio, conducted a study analyzing state Medicaid data from 1978 to 2003 and
found that Wal-Mart causes an increase in state Medicaid spending by as much as $898 per
person. [Business Week , 10/26/05]

Memo Recommended Shifting Employees to Part-Time Status. A memo written by Susan
Chambers, Wal-Mart Executive Vice President for Benefits, for the Wal-Mart Board of
Directors, recommended: “Capture savings from current initiatives to improve labor
productivity. These initiatives include reducing the number of labor hours per store, increasing
the percentage of part-time Associates in stores, and increasing the number of hours per
Associate.” [Susan Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New
York Times, 10/26/05]

Wal-Mart Executives Admit They Are Shifting to More Part-Time Workers. “Wal-Mart
executives have acknowledged that the retailer will also shift to a heavier reliance on part-time
workers, who now account for roughly 20% of the work force, higher than the national average
for retailers. A recent JP Morgan report said Wal-Mart plans to increase the ratio of its 1.2
million-member U.S. hourly work force on part-time schedules to 40% from 20%, meaning the
hours of as many as 240,000 workers could be cut below 34 a week, the threshold to be
considered full-time.” [Wall Street Journal, 4/11/06]




                                                     9
Analyst Predicts Wal-Mart’s Use of Part-Time Workers is on the Rise. Citigroup analyst
Deborah Weinswig predicted that Wal-Mart’s proportion of full-time workers is declining. In a
60-page research report, she predicted that “Wal-Mart will reduce its ratio of full-time workers to
60 percent over the next year or two, with the remaining 40 percent slated for part-time status.
Wal-Mart's proportion of full-time U.S. workers - which currently stands at about 75 percent -
could further fall to 50 percent in the future.” [Associated Press, 5/3/06]




                                                10
     PLEDGE #3: USE MARKET POWER TO IMPROVE SUPPLIER CONDITIONS
                             AND WAGES

    Sam Walton: “We still want to drive a hard bargain, but now we need to guard against
                                    abusing our power.”

           “Wal-Mart will require and ensure that that foreign and domestic suppliers adhere to all
            internationally recognized labor standards and national laws…Wal-Mart will require
            that suppliers justly compensate their own employees to the same standard set forth in
                                    this agreement for Wal-Mart employees.”

Wal-Mart Removed From Top Socially Responsible Investing Index. In 2001, Wal-Mart was
removed from the nation’s largest “socially responsible” mutual fund, the Domini 400 Social
Index, because of its human rights standards. The Domini Index is described as the “the first
benchmark for stock funds to screen for social responsibility.” Kyle Johnson, the project
manager for the index, stated “Wal-Mart is a market leader in retail, yet has not taken a
leadership position on labor issues and has been unresponsive to calls for change from
shareholders.” [Palm Beach Daily News, 6/12/05; International Shareholder, 4/17/01; The Los Angeles Times,
5/18/01]

Frequent Wage Violations Have Been Found at Wal-Mart’s Suppliers’ Factories.
According to Wal-Mart’s own audit, “several serious violations are still found consistently at the
factory level, including problems with payment of overtime compensation, coaching of workers
for worker interviews, and the use of `double-books’ to hide true numbers of hours worked or
wages/benefits paid.” [Wal-Mart Stores Inc. 2005 Ethical Sourcing Report]

Wal-Mart Toys Produced In South China Sweatshop. A China Labor Watch report detailed
the mistreatment of workers in a factory making small toys for Wal-Mart. As of early December
2005, violations against workers at the Lungcheong factory were as follows: the systematic
denial of maternity leave, work-related injuries leading to termination, illegally denying health
insurance, mandatory overtime work, insane quotas and employing underage workers. [China
Labor Watch, December 2005, http://www.chinalaborwatch.org/upload/Wal-MartLungcheongReport.pdf]

Kathie Lee Gifford’s Wal-Mart Line Involved In Human Rights Abuses. Charles
Kernaghan, director of the New York-based National Labor Committee, testified before
Congress in 1996 that Kathie Lee Gifford’s clothing line was being produced in sweatshops
around the globe. He reported that Global Fashion Plant in Choloma, Honduras - a Wal-Mart
vendor that produces clothing for the Kathie Lee apparel line - employed pregnant women and
children under harsh conditions and paid only 31 cents an hour. In 2000, The National Labor
Committee reported that workers at Qin Shi Handbag factory in Zhongshan, China - which made
handbags for Kathie Lee Gifford’s Wal-Mart line - were forced to work 14-hour shifts, seven
days a week for little or no money. [Arkansas-Democrat Gazette, 5/24/96; National Labor Committee, “Made
in China: The Role of U.S. Companies in Denying Human and Worker Rights,” 5/25/00]




                                                    11
NBC’s Dateline Exposed Wal-Mart’s Sweatshop Abuses. In 1992, NBC’s Dateline reported
that 11-year old workers from Bangladesh were making t-shirts for Wal-Mart. [New York Times,
12/24/92]

Workers at Wal-Mart’s Overseas Suppliers Paid Minimal Wages. The average full-time
United States Wal-Mart employee earns $10.11 per hour. In Swaziland, a worker at a Wal-Mart
subcontractor earns 53 cents per hour; in Indonesia, a worker at a Wal-Mart subcontractor earns
46 cents per hour; in Nicaragua, a worker at a Wal-Mart subcontractor earns 23 cents per hour;
and in Bangladesh and China, workers at Wal-Mart subcontractors earn 17 cents per hour.
[Institute for Policy Studies, “Wal-Mart’s Pay Gap,” 4/15/05]

Overseas Workers Not Paid Overtime Pay. In 2004, the International Labor Rights Fund
(ILRF) documented violations of overtime pay rules at Wal-Mart garment supply factories in
Nicaragua, Indonesia, Bangladesh and Swaziland. In September 2005, ILRF filed a class-action
lawsuit on behalf of workers in China, Bangladesh, Nicaragua, Swaziland, and Indonesia.
Workers in these countries complained of being “kicked and beaten, locked in factories, fired for
supporting a union and not paid the minimum wage or overtime.” [Institute for Policy Studies; New
York Times, 9/16/05; Corporate Legal Times, 11/05]

Underpaid Chinese Workers Cannot Afford Wal-Mart. The influx of cheap labor from the
Chinese countryside allows Wal-Mart to produce its goods at extremely low prices. The Pearl
River Delta, home to some of China’s newest and largest factories, is a breeding ground for poor
working conditions, environmental destruction, and inadequate urban planning. With the help of
the Chinese government, infrastructure improvements mean more and more workers will
descend upon this area to toil away in horrible conditions. With wages around $100 dollars a
month, most workers cannot even afford the products they produce. [BusinessWeek, 7/26/05; China
Daily, 11/29/04; San Francisco Chronicle, 12/29/04]




                                                        12
                  PLEDGE #4: ENABLE & EMBRACE SELF SUFFICIENCY

  Sam Walton: “Maybe the most important way in which we at Wal-Mart believe in giving
something back is through our commitment to using the power of this enormous enterprise as
                                  a force for change.”

 “Wal-Mart itself will not seek taxpayer-funded subsidies that locally-owned businesses do not
                                           receive.”

More Than $1 Billion In Public Subsidies Given To Company With Annual Profits of More
Than $11 Billion. A May 2004 report by Good Jobs First documented that Wal-Mart has
received more than $1 billion from at least 244 taxpayer-funded subsidies, including free or
reduced price land, Tax Increment Finance (TIF) districts, infrastructure assistance, property tax
breaks, state corporate income tax credits, sales tax rebates, tax-exempt bond financing,
enterprise zone status, job training/recruiting funds and general grants. [Mattera and Purinton, Good
Jobs First, “Shopping for Subsidies,” May 2004]

Wal-Mart Received $35 Million in the Federal Highway Bill To Widen Street to its
Headquarters. The federal highway bill President Bush signed last year included a $35 million
appropriations earmark to widen Eighth Street in Bentonville - the road to Wal-Mart's corporate
headquarters. The company says it asked U.S. Rep. John Boozman (R-AR) to secure funding for
the proposed project. However, Wal-Mart lobbyists did not consult local highway officials,
who were unaware of the request and said the driveway was not a high priority for the city of
Bentonville. [Associated Press, 3/25/05; Arkansas Democrat-Gazette, 8/11/05; Benton Daily Record, 8/21/05]

Received $9.5 Million for 1998 San Diego Development Project. In a study of a San Diego
development project that was anchored by a regular Wal-Mart and a Sam’s Club, researchers
found that Wal-Mart received about $9.5 million in public subsidies for the 1998 development.
The study estimated that the Wal-Mart and Sam’s Club stores contributed approximately
$800,000 in annual sales tax to the city. [Brennan Center for Justice]

Report Found that Public Costs Outweigh Subsidies. A Penn State report examined the
economic impact of local subsidies and found that “The public costs that [Wal-Mart] imposes by
raising the poverty rate suggest that public infrastructure subsidies may not be warranted...”
[Stephan J. Goetz, Hema Swaminathan, “Wal-Mart and County-Wide Poverty,” Social Science Quarterly, 6/06]

Wal-Mart Asked Chicago For $18 Million in Subsidies. In 2002, Wal-Mart began talking to
Chicago officials about building a supercenter within the city limits; however, the retail giant
asked for too much in return. When Wal-Mart asked for $18 million in subsidies, Mayor Daley
rejected them and quipped, “Am I buying the company?” [Chicago Sun-Times, 7/29/03]




                                                     13
                  PLEDGE #4: ENABLE & EMBRACE SELF SUFFICIENCY

  Sam Walton: “Maybe the most important way in which we at Wal-Mart believe in giving
something back is through our commitment to using the power of this enormous enterprise as
                                  a force for change.”

 “Wal-Mart will not pit local communities against each other when selecting sites for Wal-Mart
                                  stores or other facilities.”

Threatened to Move to Neighboring County in Georgia if Land Not Rezoned. Wal-Mart’s
Real Estate Manager for Georgia and South Carolina sent a letter to Clarke County
Commissioners saying that if they did not rezone land for a superstore in Athens, Georgia, then
Wal-Mart had “identified several sites in Oconee County that meet Wal-Mart’s site selection
requirements.” The letter warned that “unfortunately, our only option if the rezoning is denied is
to begin the approval process for one of the sites in the Oconee County store during the first half
of 2001.” In an Online Athens editorial, Wal-Mart lawyer Mike Morris wrote, “The relocation of
Wal-Mart to an adjoining county would be the worst of all worlds for our county. Customers
would still use our roads to get to and from the store, but all tax generated would go to the
county where it is located.” [Athens Banner-Herald, 3/26/00; Athens Banner-Herald, 12/22/99; Athens Banner-
Herald, 1/2/00]

Threatened to Move Out of Maine Community if Denied a Superstore. In 1992, Wal-Mart
opened a 100,000 square foot store in Rockland, Maine and, seven years later, decided they
wanted to close it and move across the street to open a Supercenter on 21.5 acres of land. In
order to get local citizens to agree with the plan, Wal-Mart’s real estate agent said that although
Wal-Mart would like to stay in Rockland, they had a “Plan B” if the Rockland Plan does not
come to fruition. [Bangor Daily News, 12/4/99]

After a South Side Chicago Rejection, Wal-Mart Built Store Just Outside City Limits. After
the Chicago City Council rejected Wal-Mart’s attempt to open a store on the South Side, Wal-
Mart opened a new store in Evergreen Park, which is just one block outside city limits.
Responding to the Evergreen Park store opening, Alderman Brookins, Jr. said, “The same things
they talk about Wal-Mart doing to Small Town U.S.A when they build on the outskirts of town is
the same thing they have done to the City of Chicago without fanfare. Nobody distinguishes that
if I cross Western Avenue at 95th Street, I am no longer in Chicago. For all practical purposes,
Wal-Mart is in the city of Chicago without us receiving any benefit. You're going to see the
parking lot filled with cars with Chicago city stickers.” [Chicago Sun-Times, 1/26/06; Chicago Sun-
Times, 2/3/06]




                                                    14
Threatened to Leave For Neighboring Town After City Took Efforts to Stop Another
Store. Stoughton, a suburb of Madison, Wisconsin, decided to resist Wal-Mart’s attempt to build
another store on the edge of its city limits. The new store, which would be over 180,000-square-
feet, did not appeal to residents. In early 2004, the Stoughton city council approved an ordinance
that would cap the size of any potential big-box stores. As a result of this measure, Wal-Mart’s
corporate response was to immediately suggest that they would instead build a store in the
nearby town of Oregon, Wisconsin. [Wisconsin State Journal, 1/28/04; Capital Times, 1/28/04]




                                               15
                                  PLEDGE #5: BUY LOCAL FIRST

 Sam Walton: “For Wal-Mart to maintain its position in the hearts of our customers, we have
          to study more ways we can give something back to our communities.”

  “Wal-Mart will always “Buy Local First.” Purchasing local agriculture and manufactured
 goods strengthens local economies and ensures the long-term survival of small family-owned
farms and other enterprises. And by expanding the focus of “Buy Local First” to a country as a
whole, Wal-Mart will show a firm commitment to supporting the suppliers in those countries that
                                       host its stores.”

Wal-Mart Abandoned Buy American Program It Implemented in 1985. In February 1985,
Walton wrote to 3,000 American manufacturers and wholesalers telling them that the chain
wanted to buy more American goods. Walton said, “We cannot continue to be a solvent nation as
long as we pursue this current accelerating direction. Our company is firmly committed to the
philosophy by buying everything possible from suppliers who manufacture their products in the
United States.” In 1994, promotional literature from Wal-Mart, titled “Bring It Home To The
USA,” continued to tout the company’s commitment to American manufacturers. However,
today, over 80% of Wal-Mart’s 6,000 global suppliers are based in China. [Wal-Mart Press Release,
3/13/85; Wal-Mart Literature, 1994; PBS Frontline, 11/16/04]

Wal-Mart is China’s Eighth Largest Trading Partner. Wal-Mart is China’s eighth largest
trading partner. In 2004, almost 10 percent of everything imported to the United States from
China was imported by Wal-Mart. [Business Week Online, 10/7/05; Charles Fishman, The Wal-Mart Effect,
2006]

Wal-Mart Plans To Increase Outsourcing to India. In March 2004, Business Line reported
that Wal-Mart intends to outsource $11 billion in textile merchandise over the next few years.
Wal-Mart is looking to buy $1.5 billion dollars worth of goods from India this year and increase
operations out of its Bangalore office. “The Bentonville, Ark., retailer already operates an 80-
plus-person sourcing office in Bangalore, one of India's largest cities. The company will import
more than $600 million worth of goods directly from Indian factories this year, up from $400
million in 2005, said Wal-Mart International spokeswoman Beth Keck. That number does not
include goods produced in India by Wal-Mart's domestic suppliers, which pushed the amount of
goods sourced from the country to over $1 billion last year, according to several published
reports.” [Business Line, 3/26/05; Bloomberg News, 7/11/05; Women’s Wear Daily, 3/13/06]

Purchases Products from More than 60,000 Suppliers in 70 Countries. According to Wal-
Mart’s own website, “As the world’s largest retailer, we’re in thousands of communities around
the USA and 15 other countries. We buy products from more than 60,000 suppliers in 70
countries.” [http://walmartfacts.com/newsdesk/statement-speeches.aspx?CategoryID=290#a1822]




                                                       16
Wal-Mart Buys Local Outside of America But Not in the United States. Amy Wyatt, of Wal-
Mart's International Corporate Affairs division, discussed local sourcing efforts as compared to
operations in the United States. “Wyatt confirmed this, saying 90-95% of products in Wal-Mart's
stores outside the United States – besides Central America, the company now operates stores in
Argentina, Brazil, Canada, China, Germany, Japan, South Korea, Mexico, Puerto Rico and the
United Kingdom – are generally produced in the region. ‘In the United States , our local sourcing
is not as high as 90%,’ she explained. ‘The manufacturing just doesn't exist (there).’ For
example, apparel sold in U.S. Wal-Mart stores is often manufactured in Central America , she
said.” [Tico (Costa Rica) Times, 3/17/06]

Wal-Mart Ran Rubbermaid Into the Ground. In 1994, Rubbermaid was on top of the world.
Voted as the most admired company in the United States, Rubbermaid’s rapid growth was fueled
by their relationship with Wal-Mart. When the price of resin, a main component of making
plastic products, increased, Rubbermaid asked Wal-Mart for a modest price increase to offset
rising supply costs. Wal-Mart promptly refused. After this fallout, Wal-Mart dropped some of
Rubbermaid’s products and, by 1999, the company was taken over by a competitor. A
Rubbermaid factory in Wooster, OH cut 1,000 jobs. Carol Troyer, a former Rubbermaid
executive, described Wal-Mart’s feeling about Rubbermaid at a supplier meeting in Bentonville:
“Yes, you may be Rubbermaid and you're big Rubbermaid and you got the great name and all
that, but you're not going to tell us what to do. We're not going to take your price increase, and
we really don't care what it does to you.” [PBS Frontline, 11/23/04]

Chicago Fan Company Forced to Open a Factory in China. In order to supply Wal-Mart, the
Lakewood Engineering and Manufacturing Company – a Chicago fan manufacturer - had to
open a factory in Shenzhen, China where workers make $.25 an hour, instead of the $13 an hour
in Chicago. [Los Angeles Times, 11/23/03]

Wal-Mart Advised Mr. Coffee to Move Overseas, While Promoting Buy American
Program. Mr. Coffee, which once received an award for moving its manufacturing operations
back to the United States, has mixed feelings on Wal-Mart’s Buy American program. “Mr.
Coffee began exploring production in China in 1985, after Wal-Mart demanded a $1 reduction in
the wholesale price of a brisk-selling four-cup coffeemaker, says Jeff Blackwell, former senior
vice president. Blackwell, who scouted Chinese factories and arranged the deals, says Wal-Mart
encouraged offshore production even as it promoted a ‘Made in the USA’ campaign as
energetically as DiMaggio touted Mr. Coffee machines.” [The Commercial Appeal, 6/8/01; Cleveland
Plain Dealer, 11/14/04]

Huffy Could Not Meet Wal-Mart’s Demand for Cheaper Bikes. Despite making bicycles in
the United States for many years, Huffy was forced to close three factories and layoff thousands
of workers. Celina, OH, where a large Huffy factory was closed, was hit particularly hard by the
demand for low-cost bicycles. Celina Mayor Paul Arnold said “… [Wal-Mart’s] demand for
cheaper bicycles drove Huffy out of Celina.” [Mansfield News Journal, 12/8/03]




                                               17
                                 PLEDGE #6: KEEP IT CLEAN

Sam Walton: “I’d like to believe that as Wal-Mart continues to thrive and grow, it can come to
         live up to what someone once called us: the Lighthouse of the Ozarks.”

  “Every step in Wal-Mart’s supply chain will demonstrate sound environmental stewardship.
Wal-Mart will partner with local community and environmental leaders to avoid environmental
 damage and other disruptions caused by the site selection, construction, and operation of any
Wal-Mart store or facility. This includes conserving wetlands, animal habitats, and green space,
 as well as minimizing traffic delays and air pollution. Wal-Mart will also strictly enforce this
          “Keep it Clean” policy with all of its suppliers, both foreign and domestic.”

Wal-Mart Fined Millions of Dollars for Environmental Violations Across the Country. In
2004, Wal-Mart was fined by the Environmental Protection Agency for environmental violations
in nine states - California, Colorado, Delaware, Michigan, New Jersey, South Dakota,
Tennessee, Texas and Utah. [Associated Press, 5/12/04; New York Times, 4/13/05]

Wal-Mart Paid Hundreds of Thousands of Dollars to Settle Air Pollution Claims. In 2004,
Wal-Mart Stores Inc. agreed to pay $400,000 to settle claims that its Sam's Club stores violated
federal air pollution regulations in eleven states. [The Business Journal, 1/30/04]

Wal-Mart Paid Millions of Dollars in State and Federal Penalties for Storm Water
Violations. In 2001, Wal-Mart was fined $5.5 million by the Environmental Protection Agency
and the Justice Department for the first-ever violations of rules governing storm water under the
Clean Water Act. The violations were found at construction sites in four states - Massachusetts,
New Mexico, Oklahoma and Texas. In August 2005, Wal-Mart signed an agreement with the
Connecticut Department of Environmental Protection over storm water violations occurring over
seven years at 20 stores and agreed to pay $1,550,000 in penalties, including funds for
environmental projects. [Underground Construction, 8/1/01; Forbes, 8/15/05]

Wal-Mart Received Large Fines For Water Contamination in Georgia. Georgia’s
Environmental Protection Division (EPD) fined Wal-Mart for construction site runoff - $95,000
for a Monroe site and $65,000 for a Loganville site. Wal-Mart’s violations included failure to
maintain silt fencing around the construction sites, failure to install detention ponds to prevent
runoff and failure to keep records. Mud from the sites ran into creeks in the Alcovy River basin.
EPD Assistant Director David Word said the severity of the violations warranted the fines, which
are some of the highest levied by EPD for violations of the federal Clean Water Act. [Atlanta
Journal-Constitution, 2/10/05]




                                               18
Wal-Mart Fined $765,000 for Petroleum Storage Violations in Florida. Wal-Mart was levied
$765,000 in fines for violating Florida’s petroleum storage tank laws at its automobile service
centers. The Florida Department of Environmental Protection said that Wal-Mart failed to
register its fuel tanks with the state and failed to install devices that prevent overflows, among
other problems. In addition, Wal-Mart failed to perform monthly monitoring, lacked current
technologies to prevent overflows, blocked state inspectors from reviewing maintenance records
and failed to submit proper insurance documentation. [Associated Press, 11/18/04]

Record of Building Near Sensitive Wetlands. Wal-Mart has a poor record of locating stores on
environmentally sensitive sites, especially wetlands. For example, in Illinois, Wal-Mart was
ordered to pay $80,000 in fines to the state and Lake County after a lake and nearby wetland
were damaged in the community of Antioch. The state and county officials sued Wal-Mart in
2004 after storm water runoff from construction of a Supercenter polluted the area. [Institute for
Local Self-Reliance, 7/21/05; Chicago Tribune, 2/25/06]

Wal-Mart Built Store On Traditional Mayan Grounds. “A Wal-Mart store rising near the
2,000-year-old pyramids of the Teotihuacan Empire has ignited the wrath of Mexican
conservationists and nationalists, who say the U.S. retailer is destroying their culture at the foot
of one of Mexico's greatest treasures… Last week, 63 prestigious artists and intellectuals, in a
letter published in Mexican newspapers, asked President Vicente Fox to stop the structure. They
see it as a battle pitting Mexico's heritage against encroaching U.S. influence.” [Knight Ridder,
10/25/04]

Wal-Mart Contributes Blight in the United States. Wal-Mart’s constant expansion and
conversion of Discount Stores to SuperCenters is leaving vacant buildings all over the country.
According to Wal-Mart Realty’s website, there are 309 listed buildings for lease, and an
additional 68 buildings currently up for sale. [http://www.walmartrealty.com]

Wal-Mart Contributes to Sprawl By Gobbling Up More and More Land. In the United
States, Wal-Mart has 529,835,000 square feet (or approximately 12,163 acres) of retail space, not
including the parking lots. [SEC form 10-K, filed March 31, 2005]




                                                          19
Wal-Mart has Repeatedly Undermined Community Efforts to Ease Traffic Delays. In many
municipalities, approval for new construction is dependent on results from environmental and
economic impact reports and traffic studies are often one component of such reports. In several
California communities, Wal-Mart attempted to skirt the permitting and public planning
processes. In Inglewood, Wal-Mart sponsored a referendum that would have forced the
Inglewood city council to approve a Supercenter without the usual Environmental Impact
Review and public hearing. The voting public was instead asked to approve, with a yes or no
vote, sixty pages worth of urban planning. In Turlock, Wal-Mart filed two lawsuits to overturn a
city ordinance that banned stores larger than 100,000 square feet that devoted more than 5% of
floor area to non-taxable retail sales as part of an overhaul of its municipal code. In Rosemead, a
community group filed suit in 2004, alleging that environmental impact documents were biased
in favor of Wal-Mart and a California judge ruled that the studies had not adequately addressed
the retailer’s 24-hour operations. [Initiative Measure to be Submitted to the Voters, 04-A, City of Inglewood;
City of Turlock, Agenda Report to City Council from Michael Cook, AICP, Planning Manager, p.2, December 9,
2003; San Gabriel Valley Tribune, 7/1/05; Save Our Community v. City of Rosemead, et al, Superior Court of
California, County of Los Angeles, minutes entered 4/6/05]

Wal-Mart Supplier Cuts Down Old-Growth Forests To Make Tissue Products. As a large
supplier to Wal-Mart and holding a 55% retail share in the facial tissue market in 2004, the
Kimberly-Clark Corporation sells an enormous amount of goods in Wal-Mart Supercenters
around the country. Company executives admit using pulp from old-growth forests in their
products. Kimberly-Clark spokesman Dave Dickson said, “Yes, we use virgin pulp from the
boreal forest in Canada. We do from some areas, yes, but not from ecologically significant old-
growth areas.” [Washington Post, 12/12/04]

Wal-Mart Has Cozy Relationship With Polluting Supplier. With its gas stations primarily
located in the parking lots of Wal-Mart stores, Murphy Oil USA has formed a symbiotic
relationship with the retail giant. However, this relationship does not always benefit the
environment. According to the Capital Times, “Murphy Oil USA Corp. violated Federal
Environmental Laws and withheld information from the government on changes to its Superior
refinery, a federal judge ruled Wednesday...The federal government filed the lawsuit last year
accusing the company of emitting more than 20 times the allowable level of sulfur dioxide for
the last decade than what would have been allowed had the required pollution control equipment
been installed.” [Capital Times, 8/2/01]




                                                     20
                  PLEDGE #7: PROVE WORTHY OF THE WORLD TRUST

 Sam Walton: “As long as we’re managing our company well, as long as we take care of our
     people and our customers, keep our eyes on those fundamentals, we are going to be
successful. Of course, it takes an observing, discerning person to judge those fundamentals for
                                            himself.”

 “Wal-Mart will be open and transparent in its dealings with the public, the news media, and its
    own employees. Wal-Mart will actively work to demonstrate its dedication to the moral
   obligations described herein, and is committed to documenting and publicizing consistent
        progress and follow through on all of its public proclamations and initiatives.”

Wal-Mart Provided Inaccurate Testimony to FDIC. In an attempt to convince the FDIC they
are worthy of opening industrial banks, Wal-Mart provided inaccurate statements in its testimony
to agency officials about its plans to “replace community banks now in its stores with bank
branches of its own.” Wal-Mart told the FDIC that it couldn’t realistically expand into
commercial banking because it already has long-term leases with banks that operate branches in
its stores and that “leases signed by banks were renewed at the discretion of the banks alone.”
However, after a report by Reuters, Wal-Mart later acknowledged that leases with at least some
banks could be renewed only if both the banks and Wal-Mart approve. Wal-Mart blamed an
oversight for the inaccurate statements. Ohio Republican Congressman Paul Gillmor, a member
of the House Financial Services Committee, said, “We are beginning to see a pattern of
misleading or false statements from Wal-Mart with regard to their interests in branch banking.”
[Reuters, 5/9/06; Cox News Service, 5/11/06]

Wal-Mart has Repeatedly Been Sanctioned for Discovery Abuses. An October 1999 article in
Corporate Counsel magazine cited “two dozen cases during the past 18 months” in which Wal-
Mart had been sanctioned for discovery abuse, including one $18 million fine. judge in a judge in
a Texas case who imposed sanctions for discovery abuse said, “Unfortunately, nefarious conduct
is all too common in lawsuits in which Wal-Mart is a party.” [Wilson v. Wal-Mart Stores Inc., 199
F.R.D. 207, 208 (S.D. Tex. 2001); ABA Journal, March 2002]

Refuses to Release Median Wage. To defend their treatment of their workers, Wal-Mart
releases the average hourly wage for full-time employees. However, they will not release their
median wage which would provide a clearer sense of what its workers earn; they use misleading
language to mask the fact that wages for management are significant higher, and therefore skew
the “average” wage of “store associates; and they refuse to release wage levels for specific job
functions.

Opposed Law Requiring Disclosure of Employee Health Insurance Data. In 2005,
Minnesota legislators introduced a bill that would require Minnesota state agencies to gather and
make public data about whether the employees and family members of Wal-Mart and other large
employers use the state’s public assistance programs. Wal-Mart sent two officials to St. Paul to
lobby against the bill and sent each legislator a two-page letter outlining its opposition to the law.
[Minneapolis Star Tribune, 6/2/05]



                                                    21
Misled Legislators About Their Role in The High Number of Wal-Mart Employees
Receiving Public Assistance. In a letter to state legislators, Wal-Mart wrote that they “provide
the mechanism for associates to remove themselves from public assistance” and that they
“certainly don’t encourage our associates to apply for public health benefits.” However,
documents bearing the Wal-Mart logo revealed that Wal-Mart issues paper “Instructions for
Associates” which provides their employees instructions to apply for public assistance programs.
And, Wal-Mart CEO Lee Scott said, “There are government assistance programs out there that
are so lucrative it’s hard to be competitive, and it’s expensive to be competitive.” [Wal-Mart Letter
to State Legislators, 6/20/05; Wal-Mart Social Services Documents; St. Louis Post Dispatch, 4/6/05]

Misled Customers About Where Products Were Made. “NBC…took a hidden camera
into a Wal-Mart store, where winter jackets for children made in Bangladesh were
displayed under ‘Made in the USA’ signs. NBC said it found the same practice in 11
other Wal-Mart stores in Florida and Georgia.” [UPI, 12/22/92]

Lobbied Against Port Security Measures Through Trade Group. Through a lobbying
group, the Retail Industry Leaders Association (RILA), Wal-Mart opposed several port
security measures, including proposals to make shipping containers more secure, beef up
inspections and provide more prompt cargo information. According to Congressional
Quarterly, “Why would Wal-Mart, the world’s largest retailer, with its recently
expanded in-house lobbying team, need to join a trade association? As it turns out, for
largely the opposite reasons that other companies cite. The retail giant doesn’t want to
draw attention to its legislative agenda; it wants to use its membership in the Retail
Industry Leaders Association (RILA) as a buffer.” [Reuters, 4/6/06; Los Angeles Times, 4/6/06,
CQ Weekly, 5/1/06]

Despite Privacy Pledge, Wal-Mart Collects Enormous Amounts of Data About
Customers. On its Web site, Wal-Mart posts a privacy policy that states: “We take
reasonable steps to protect your personal information. We maintain reasonable physical,
technical and procedural measures to limit access to personal information to authorized
individuals with appropriate purposes.” However, Wal-Mart amasses more data about the
products it sells and its shoppers' buying habits than anyone else, so much so that some
privacy advocates worry about potential for abuse. The data are gathered item by item at
the checkout aisle, then recorded, mapped and updated by store, by state, by region. By
its own count, Wal-Mart has 460 terabytes of data stored on Teradata mainframes, made
by NCR, at its Bentonville headquarters. To put that in perspective, the Internet has less
than half as much data, according to experts. Katherine Albright, the founder and director
of Caspian, a consumer advocacy group concerned with privacy issues, said, “People
don't know that Wal-Mart is capturing information about who they are and what they
bought, but they are also capable of capturing a huge amount of outside information
about them that has nothing to do with their grocery purchases. They can find out your
mortgage amounts, your court dates, your driving record, your creditworthiness.” [New
York Times News Service, 11/14/04]




                                                        22
Wal-Mart Secretly Watched Consumers’ Shopping Activities. “Shoppers in a suburban
Tulsa, Okla., Wal-Mart were unwitting guinea pigs earlier this year in a secret study that two of
America's largest corporations never expected you'd know about. In the study, uncovered by the
Chicago Sun-Times, shelves in a Wal-Mart in Broken Arrow, Okla., were equipped with hidden
electronics to track the Max Factor Lipfinity lipstick containers stacked on them. The shelves
and Webcam images were viewed 750 miles away by Procter & Gamble researchers in
Cincinnati who could tell when lipsticks were removed from the shelves and could even watch
consumers in action.” [Chicago Sun-Times, 11/9/03]

Tells Suppliers Not to Talk About Wal-Mart Relationship. “Wal-Mart has imposed a wall of
silence around its operations, its relationship with its suppliers, even around the operations of its
suppliers…The silence is backed by muscle, the threat of losing business with Wal-Mart.”
[Charles Fishman, The Wal-Mart Effect, 2006]




                                                 23