On September 18, 2005, Sprawl-Busters reported that workers in six foreign countries had filed a class action lawsuit against Wal-Mart in the California court system, claiming that factory workers were paid below minimum wage, forced to work unpaid overtime, and beaten by supervisors. The workers are from Bangladesh, Swaziland, Indonesia, China and Nicaragua. The suit, which was filed by the International Labor Rights Fund, could cover as many has half a million foreign workers in sweatshops that do business with Wal-Mart. Fifteen months later, the Associated Press reported last night that a federal judge in Orange County, California is likely to throw out the class action lawsuit. Although U.S. District Judge Andrew J. Guilford, is expected to issue a decision later, he indicated that he planned to drop the case against Wal-Mart. The plaintiffs charged that Wal-Mart failed to enforce its “Standards for Suppliers,” which requires foreign companies to adhere to local labor laws and treat workers fairly. The litigation also complained that Wal-Mart used its Standards policy as reason to shop at its stores. The plaintiffs asked the court to require Wal-Mart to enforce its Standards. The lawsuit charged that Wal-Mart was violating a 217 year old federal statute that forbids suppliers from withholding pay from workers in foreign nations. The Judge said he was “sympathetic to the plight of the plaintiffs” but said the 1789 law must be viewed very narrowly. If the judge does throw out the case, it appears that the plaintiffs can rework it, and file it again in an amended form, the Associated Press said.
This case is clearly not over, but just beginning. Activists will continue to hammer Wal-Mart in the media for the conduct inside the thousands of sweatshop factories that supply its global network of stores. By not owning the factories directly, not publishing a list of such suppliers, and not allowing independent, unannounced monitoring of these factories, Wal-Mart can hide behind its Standards, without being able to verify through independent inspections that its vendors are really following the standards or not. Critics complain that when Wal-Mart does audit a vendor, it announces its visits in advance, so that factories can prepare for any site visit. Wal-Marts lack of aggressive anti-sweatshop policies is one of the reasons why several large pension funds have excluded Wal-Mart stock from their portfolio. For earlier stories, search Newsflash by “sweatshop.”