Reports

June, 05 2005 |  Share

Wal-Mart Whistleblower Speaks out: Working for Wal-Mart as a Monitor

 

Jim Bill worked for Wal-Mart for 8 ½ years before he was fired in May 2002.

In 1993, Jim Bill was actually recruited by Wal-Mart while he was working for a supermarket chain in Memphis.  On November 6, 1993, Jim Bill went to work for Wal-Mart as an area manager in a large distribution center in Arkansas. 

While working full time and raising a family of three children, Jim Bill went back to school and completed his college degree.  (Jim Bill's wife is from Costa Rica and he met her at college—where she was studying on a Walton Scholarship.  Jim Bill was a leader of the Young Republicans on his campus and campaigned for Dan Quail, George Bush, Reagan, etc.)

The distribution center in Arkansas was one of Wal-Mart's most productive in the entire country, and Jim Bill's area was always top ranked.

In 1999, Jim Bill's boss, the general manager, recommended him for an advancement and a job at Wal-Mart's Bentonville headquarters as a regional operations trainer.  He quickly advanced from a regional to a divisional warehouse trainer.  His job was really that of trouble shooter.  For example, a regional vice-president would call saying they needed him to go to South Carolina.  The distribution center was not getting its productivity in line, was taking too many hours, missing shipment deadlines and labels going out late.  If a new distribution center was built, Jim Bill would go to help get it organized.  He also did seminars and three-day trainings.  If he went to a distribution center in Texas, 11 other distribution centers would send their representatives for his three day training.

During his career at Wal-Mart, Jim Bill led hundreds of Wal-Mart cheers.  When he went to the distribution centers, they always asked the visitor to lead the cheers.  Sometimes, he says, he could really get people fired up.

When I asked him if Wal-Mart required long hours, Jim Bill said, "Not really.  But then he explained he would generally arrive at work at 6:30 or 7:00 a.m. and leave at 7:00 p.m. Monday through Friday.  On Saturdays, it was expected you come into the office for a half day a couple of times a month.  There were weeks when he was on the road and worked on Sunday as well.

In 2001, there was a meeting in Bentonville with Wal-Mart managers from China.  Evidently the issue of distribution centers came up and Jim Bill was asked to stop by to be introduced to his Chinese colleagues.  He offered his help should they ever need it.

Not long after that, Jim Bill was called in for an interview with a Mr. Dennis Anderson, who was Vice-President for Global Procurement for People.  Wal-Mart had just taken over PREL—Pacific Rim Export Limited—which had acted as Wal-Mart's supplier.  To cut costs, Wal-Mart was doing away with the "middleman" and would now do its own direct contracting.  Jim Bill was informed that Wal-Mart was opening a new office in Costa Rica and that there was a job opening.  He was encouraged to apply.

His new job description would make him responsible for all of Wal-Mart's factory certifications, as well as for Quality Control and the export of all goods from Wal-Mart supplier factories in Mexico, Central and South America.  (At the time there were over 100 factories in the region which operated under direct contract with Wal-Mart.  The majority of these factories were in Honduras and Guatemala, which had around twenty factories each directly supplying Wal-Mart.)

Jim Bill accepted the job in November 21, 2001.  He quickly went down to Costa Rica to familiarize himself with the operations and moved there in January 2002.

Jim Bill was working hard, and felt he was moving up.  He saw his new assignment as another step on his career track.  After a stint in Costa Rica, he would probably be made an assistant general manager at a distribution center at $65,000 a year and then quickly move up to a general manager's position at $100,000 a year, where he could actually receive twice as much in bonus and stock options.

Jim Bill bought into the Wal-Mart culture.  When the Kathie Lee Gifford story broke—and everyone at Wal-Mart was discussing it—he believed that Wal-Mart was committed to seeing this sort of thing would never happen again.  Jim Bill believed that was part of Wal-Mart's culture.  He believed that the company would never accept abuse.  Lowering prices is one thing, tolerating abuse is another.  Yes, Wal-Mart was tight and had high expectations and demands, but Jim Bill believed Wal-Mart was fair, consistent and supported an open-door policy:  If there is a problem, let's get it out in the open;  let's talk it through;  let's document the allegations and investigate what really happened.  This was the Wal-Mart culture Jim Bill carried with him to Cost Rica. 

Almost immediately he found out how wrong he was.

There were 22 people in the Costa Rica office, and he was the only American.  The general manager was a guy called Odair Violim, and Moon Chung reported directly to him.  In turn, Jim Bill reported to Moon Chung.  Prior to working on compliance and other issues for Wal-Mart, Moon Chung was a manager of a South Korean-owned maquila garment factory in Honduras.

Jim Bill quickly went into 15 to 17 factories, participating in seven certifications.

He was shocked to document the same violations repeated in factory after factory:

  • Mandatory pregnancy tests:  Management said these were blood tests to check for diseases.  But the tests were never given to men.  Everyone knew what this was really about.  Women were tested within the first 90 days of employment, and if they tested positive, they were fired.
  • Fire exits were padlocked:  Management said they were afraid of theft.  Jim Bill explained it was illegal and suggested they use plastic trailer seals, which could be broken open in times of emergency.
  • Extreme heat:  Many of the factories were old warehouses which lacked proper ventilation.  Accounts of workers passing out from the extreme heat were very credible.
  • Workers had to get permission to use the toilets, which were filthy and often lacked even toilet paper.  Supervisors monitored and timed bathroom visits.
  • Drinking water was not potable, and was unsafe to drink.
  • Pat-downs were common, when workers were entering and leaving the plants, and even before bathroom visits.
  • Overtime was mandatory and excessive—even including all-night, 24-hour shifts.
  • Docking of wages:  It was routine that workers taking a sick day would have their wages docked two days.  Coming to work one hour late would result in two hours wages being docked as punishment.
  • Locked in factory compound:  Many times workers were locked into the factory compound and not permitted to leave, even during the lunch break.  In such cases the workers had no access to the local food stands and often had to buy their lunch at the company cafeteria, where the food was frequently not only unsafe but also very expensive.
  • Where local laws called for factory clinics staffed with a doctor and daycare facilities, the factories rarely complied.

All Wal-Mart factory certification visits had to be announced at least three days in advance, and often the factories were alerted weeks in advance as travel plans had to be made and confirmed.  This did not make sense to Jim Bill.  With such advance notice, it was clear that the monitors would never find child labor or other extreme violations.

So Wal-Mart supplier factories were monitored for one day, once a year and the visits were known in advance. 

This was very different from how things were done with regard to Quality Control.  Quality Control monitors could go in and out of a factory without a minute's notice to carry out spot checks, and do it almost on a daily basis.  Further, it was common knowledge that Quality Control staff were not to discuss, review or document anything that had to do with compliance certification issues.

Certification monitors had to follow a series of scripted questions, from which they were not permitted to deviate.  Union rights issues never came up, as they were not in the script, and if it wasn't in the script, you could not ask or pursue it.  (However, Jim Bill believes that Wal-Mart's position is to pull its work from any factory subject to a union strike, and not to return.)

The certification script called for a minimum of 10 workers and never more than 30 workers to be interviewed.  The interviews were done inside the factory, though the monitors could randomly select which workers they wanted to speak with.  The interviews were done in a conference room, and not in the presence of management.

The interviews took about 15 minutes each.  Jim Bill realized that the workers were often afraid, and many explained that they had been warned beforehand not to say anything negative about the factory or they would be fired.

Jim Bill also reviewed time cards and pay stubs, but admits there was no way to tell if the company was keeping two sets of books.  All he could look for were the most obvious things—such as hours whited out and redone.

I asked Jim Bill if he ever returned at night to see if the factories were still open and running, and he replied:  "No.  It wasn't part of the deal or expected."

Wal-Mart auditors never visited workers in their homes, and there was never any discussion regarding whether or not factory wages came close to providing even the most minimal basket of necessities.  However, it was clear to Jim Bill as they drove past workers neighborhoods to get to the factories that the workers were living in hovels, and that they were living well below poverty level.

Jim Bill alerted Wal-Mart headquarters to the problems he was finding.  For example, one monitor working out of Honduras, Robert Jones, was being pressured by Moon Chung to alter his monitoring reports.  He explained this in an email to Jim Bill, which Jim Bill forwarded to Denise Fenton, who was head of factory certification for Wal-Mart in Bentonville.  Jim Bill also informed Denise that he was sure that Moon Chung was involved in corruption. Surprisingly, Denise Fenton responded that she was aware of these same rumors.

In April 2002, Mike Duke-—now President of Wal-Mart Stores U.S.A. and 2nd in command after CEO Lee Scott-—visited Costa Rica to plan for the coming year.  Two executive vice presidents joined him.   (At that time, Mike Duke was Vice President for Legal, Real Estate and Global Procurement.)  Toward the end of a day-long meeting, Jim Bill was called upon to discuss the factory certification program.  Duke asked Jim Bill: "What grade would you give us" on these certifications?, and Jim Bill replied, "A 'C-' or a 'D+'" At which point everyone started looking at him with expressions of, as Jim Bill describes, "what are you doing.  You are making us look bad."

At that point, Peter Allison, a former GAP manger, who was now head of Wal-Mart's Global Procurement for America and Europe said to Jim Bill, "Are you sure about that?"  Jim Bill responded that, yes, he saw the same violations in factory after factory, but that these violations could be quickly corrected if there was proper support.  The meeting ended.  That night, Duke and his entourage left for Honduras, while Jim Bill went to Guatemala.  The following day, Duke and company hooked up with Jim Bill in Guatemala to do a round of factory visits.

Again, Jim Bill was shocked.  These were dog-and-pony shows.  Duke would walk into a factory and say to the local manager, "How can we help you be better?"  Duke never raised a single human rights issue.  It was a scripted stroll around the factory with Duke asking such questions as "How much of your production is for us?" (This struck Jim Bill as odd, since if this were a U.S. store, Duke would have all the specs and would know more than the store manager.  He would have studied all the specs ahead of time.  This factory visit was quite the opposite.  It lacked any seriousness.)

Contrary to the myth, Duke and the others stayed in the most expensive hotels in Costa Rica (Marriott) and in the other places they visited, and they didn't share rooms.  Only when Jim Bill traveled alone did they encourage him to stay in cheaper hotels.

On May 7, 2002, shortly after Duke's visit, Jim Bill was fired, supposedly for fraternizing with another Wal-Mart employee—i.e. having an affair with a woman employee.  Jim Bill denies this and so does the woman, despite the fact that she was taken to an undisclosed location and grilled by Wal-Mart staff, sometimes banging their fists on the table, with security guards posted outside the door.  The gist was:  she wouldn't be allowed to leave until she said what they wanted to hear.  Still, both Jim Bill and the woman denied the allegations as untrue.

For months Jim Bill tried to reverse his unjust firing and explain what he thought really happened and why he was fired—for telling the truth.  After weeks of trying, Jim Bill finally got an 11-minute meeting with Duke, who told him, "You didn't stick with our culture."

Three years after James Lynn was fired for telling the truth about abusive conditions in Wal-Mart's suppliers' plants, the same abuses and monitoring cover-ups continue in plants producing goods for Wal-Mart hidden all over the developing world.