Criticism of Walmart

Walmart reports that in 2006 its workers earned an average of $10.11 per hour. Human Rights Watch estimates that this is below the average of $10.24 earned by workers at discount department stores, $10.55 at warehouse clubs and supercenters, and $11.12 at grocery stores.[47] Walmart managers are judged, in part, based on their ability to control payroll costs.[48] The Wall Street Journal says this puts extra pressure on higher-paid workers to be more productive.[49] Walmart insists its wages are generally in line with the current local market in retail labor.[50]

Other critics have noted that in 2001, the average wage for a Walmart Sales Clerk was $8.23 per hour, or $13,861 a year, while the federal poverty line for a family of three was $14,630.[51] Walmart founder Sam Walton once said, "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment."[52]

In August 2006, Walmart announced that it would roll out an average pay increase of 6% for all new hires at 1,200 United States Walmart and Sam's Club locations, but at the same time would institute pay caps on veteran workers.[53] While Walmart maintains that the measures are necessary to stay competitive, critics believe that the salary caps are primarily an effort to push higher-paid veteran workers out of the company.[53]

In 2008, Walmart agreed to pay at least $352 million to settle lawsuits claiming that it forced employees to work off the clock. "Several lawyers described it as the largest settlement ever for lawsuits over wage violations."[54]

Because Walmart employs part-time and relatively low paid workers, some workers may partially qualify for state welfare programs.[55] This has led critics to claim that Walmart increases the burden on taxpayer-funded services.[56][57] A 2002 survey by the state of Georgia's subsidized healthcare system, PeachCare, found that Walmart was the largest private employer of parents of children enrolled in its program; one quarter of the employees of Georgia Walmarts qualified to enroll their children in the federal subsidized healthcare system Medicaid.[58] A 2004 study at the University of California, Berkeley charges that Walmart's low wages and benefits are insufficient, and although decreasing the burden on the social safety net to some extent, California taxpayers still pay $86 million a year to Walmart employees.[59][60]

On September 4, 2008, the Mexican Supreme Court of Justice ruled that Walmart de Mexico, the Mexican subsidiary of Walmart, must cease paying its employees in part with vouchers redeemable only at Walmart stores.[61]

In July 2016, some workers in China went on unofficial strike at Walmart stores in Nanchang, Jiangxi Province, Chengdu, Sichuan Province, and Harbin, Heilongjiang Province against the company's new working-hours scheduling system.[62][63] The striking workers protested the system, which allowed managers to schedule an unlimited number of hours per day totalling up to 174 hours per month without overtime pay.[62] According to Walmart, workers could either opt into the new schedule or keep their original shifts, but pointed out that the new scheduling, which Walmart claim most workers they had contacted supported, allowed employees to work more shifts if they choose.[62][63][64] Chinese Walmart staff accused the country's only officially recognised union, the All-China Federation of Trade Unions (ACFTU), as being apathetic to their cause and unreceptive to workers' opinions. The ACFTU had previously signed an agreement with the company in 2006 that allowed Walmart to set up management-controlled unions instead. The union asked for the workers to return to their jobs. Reuters reported that by July 8, 2016, the striking workers returned to work when management agreed to consider their protests.[65] Later it was reported that OUR Walmart provided strategic advice to the Walmart Chinese Workers Association (WCWA) prior to the strikes in China.[66]

In January 2018, Walmart announced the increase of the minimum wage for its U.S. employees to $11 per hour.[67]

Walmart has faced accusations involving poor working conditions for its employees. For example, a 2005 class action lawsuit in Missouri asserted approximately 160,000 to 200,000 people who were forced to work off-the-clock, were denied overtime pay, or were not allowed to take rest and lunch breaks.[68] In 2000, Walmart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Walmart employees in Colorado had been forced to work off-the-clock.[68] The company has also faced similar lawsuits in other states, including Pennsylvania,[69] Oregon, and[70] Minnesota.[71] Class-action suits were also filed in 1995 on behalf of full-time Walmart pharmacists whose base salaries and working hours were reduced as sales declined, resulting in the pharmacists being treated like hourly employees.[72]

Beginning in 2001, a lawsuit on behalf of 1.5 million women workers at Walmart was filed against the company, alleging that the company followed rules and practices that discriminated against women when it came to pay and promotions.[73] Beginning in 2005, the class-action suit Dukes v. Walmart Stores, Inc. was heard by the United States Court of Appeals for the Ninth Circuit.[74] Sociologist Dr. William Bielby provided expert opinion on the case, in which he evaluated Walmart's employment policies and corporate culture "against what social science research shows to be factors that create and sustain bias and those that minimize bias" and claimed there was gender bias.[73][74] In 2011, for the U.S. Supreme Court case Walmart v. Dukes, U.S. Supreme Court Justice Antonin Scalia rejected Bielby's testimony, saying it was "worlds away" from proof.[73] The Supreme Court threw out the lawsuit in a 5–4 vote, ruling that the plaintiffs did not meet the rules to proceed as a class.[73]

On October 16, 2006, approximately 200 workers on the morning shift at a Walmart Super Center in Hialeah Gardens, Florida, walked out in protest against new store policies and rallied outside the store, shouting "We want justice" and criticizing the company's recent policies as "inhuman".[75] This marks the first time that Walmart had faced a worker-led revolt of such scale, according to both employees and the company.[75] Reasons for the revolt included cutting full-time hours, a new attendance policy, and pay caps that the company imposed in August 2006, compelling workers to be available to work any shift (day, swing or night), and that shifts would be assigned by computers at corporate headquarters and not by local managers. Walmart quickly held talks with the workers, addressing their concerns.[75] Walmart asserts that its policy permits associates to air grievances without fear of retaliation.[76]

A 2004 report by Democratic United States Representative George Miller alleged that in ten percent of Walmart's stores, nighttime employees were locked inside, holding them prisoner.[77][78] There has been some concern that Walmart's policy of locking its nighttime employees in the building has been implicated in a longer response time to dealing with various employee emergencies, or weather conditions such as hurricanes in Florida.[79] Walmart said this policy was to protect the workers and the store's contents in high-crime areas and acknowledges that some employees were inconvenienced in some instances for up to an hour as they had trouble locating a manager with the key. However, fire officials confirm that at no time were fire exits locked or employees blocked from escape. Walmart has advised all stores to ensure the door keys are available on site at all times.[79]

In January 2004, The New York Times reported on an internal Walmart audit, conducted in July 2000, which examined one week's time-clock records for roughly 25,000 employees.[80] According to the Times, the audit, "pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals", including 1,371 instances of minors working too late, during school hours, or for too many hours in a day.[80] There were 60,767 missed breaks and 15,705 lost meal times.[80] Walmart's vice president for communications responded that company auditors had determined that the methodology used by The New York Times was flawed, and the company "did not respond to it in any way internally."[80] Walmart has been accused of allowing undocumented workers to work in its stores. In one case, federal investigators say Walmart executives knew that contractors were using undocumented workers as they had been helping the federal government with an investigation for the previous three years.[81] Some critics said that Walmart directly hired undocumented workers, while Walmart says they were employed by contractors who won bids to work for Walmart.[82]

On October 23, 2003, federal agents raided 61 Walmart stores in 21 United States states in a crackdown known as "Operation Rollback", resulting in the arrests of 250 nightshift janitors who were undocumented.[83] Following the arrests, a grand jury convened to consider charging Walmart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores.[83] The workers themselves were employed by agencies Walmart contracted with for cleaning services.[83] Walmart blamed the contractors, but federal investigators point to wiretapped conversations showing that executives knew some workers did not have the correct documentation.[83] The October 2003 raid was not the first time Walmart was found using unauthorized workers. Earlier raids in 1998 and 2001 resulted in the arrests of 100 workers without documentation located at Walmart stores around the country.[84]

In November 2005, 125 alleged undocumented workers were arrested while working on construction of a new Walmart distribution center in eastern Pennsylvania.[85] According to Walmart, the workers were employees of Walmart's construction subcontractor.

On January 13, 2011, four employees at a Walmart in Layton, Utah were confronted by a shoplifter who pulled out a handgun and took one of the employees hostage in an attempt to leave a small, closed office. The other three employees disarmed and subdued the shoplifter, and all four held onto the man until police arrived. A week later, the four employees were fired for violating a company policy requiring employees to "disengage" and "withdraw" from any situation involving a weapon.[86] The four fired employees, together with two other Walmart employees who had been fired after subduing violent customers, sued Walmart in the United States federal court in June 2011.[87] After the Utah Supreme Court ruled (in response to a request from a federal judge) that Utah law prohibited the firing of workers for defending themselves from injury or death, Walmart and the workers settled the case on undisclosed terms.[88]

On July 9, 2013, an employee at a Walmart in Kemptville, Ontario, confronted a customer who had left his dog locked in his truck with the windows rolled up. She called the police when the customer refused to solve the problem. She was fired later the same day, reportedly on the grounds of "being rude to a customer", after rejecting instructions from her manager that such incidents should be reported to the store management rather than directly to the police.[89][90]

The National Labor Relations Board (NLRB) has long had the goal of protecting workers, whether unionized or not, who engage in concerted activity by speaking with each other regarding conditions, wages, and/or benefits. The NLRB has recently stated that this also applies to social media.[91] The key point is whether or not the intent appears to be to communicate with fellow employees.[92][93] And Walmart's official policy is viewed as acceptable and not overly restrictive in this regard, revised in part after consultations with the NLRB.[94] However, in practice, Walmart may not always follow such a policy. For example, a September 2013 article in The Atlantic Wire, reports the case of a 17-year veteran of Walmart's Paramount, California location who started at $5.50 an hour as an overnight stocker and became a manager in housewares. "For 14 years I was a model associate", he states. In 2012, he became increasingly involved with OUR Walmart and was fired in May 2013. He reports that after he began speaking about labor conditions "they started silencing me, by holding me to standards that they weren't holding other associates to. We were so understaffed, and the workload placed on me [was] unsurmountable."[95]

According to a September 2002 survey by the state of Georgia, one in four children of Walmart employees were enrolled in PeachCare for Kids, the state's health-insurance program for uninsured children, compared to the state's second-biggest employer, Publix, which had one child in the program for every 22 children of employees.[96] A December 2004 nationwide survey commissioned by Walmart showed that the use of public-assistance health-care programs by children of Walmart workers was at a similar rate to other retailers' employees, and at rates similar to the United States population as a whole.[97]

As of October 2005, Walmart's health insurance covered 44% or approximately 572,000 of its 1.3 million United States workers.[98] In comparison, Walmart rival and wholesaler Costco insures approximately 85% of its workers.[99][100][101] In 2003 Walmart spent an average of $3,500 per employee for health care, 27% less than the retail-industry average of $4,800.[102] When asked why so many Walmart workers choose to enroll in state health care plans instead of Walmart's own plan, Walmart CEO Lee Scott acknowledged that some states' benefits may be more generous than Walmart's own plan: "In some of our states, the public program may actually be a better value – with relatively high income limits to qualify, and low premiums."[103] Critics of Walmart say in Walmart: The High Cost of Low Price that employees are paid so little they cannot afford health insurance.

On October 26, 2005, a Walmart internal memo sent to the firm's board of directors advised trimming over $1 billion in health care expenses by 2011 through measures such as attracting a younger, implicitly healthier work force by offering education benefits.[104] The memo also suggested giving sedentary Walmart staffers, such as cashiers, more physically demanding tasks, such as "cart-gathering", and eliminating full-time positions in favor of hiring part-time employees who would be ineligible for the more expensive health insurance and several policy proposals which may violate the Americans with Disabilities Act of 1990.[104] The memo also accused Walmart's lower paid employees of abusing emergency room visits, "possibly due to their prior experience with programs such as Medicaid", whereas such visits may actually be due to the reduced ability of uninsured or underinsured people to make timely appointments to see a regular physician.[104]

On January 12, 2006, the Maryland legislature enacted a law requiring that all corporations with more than 10,000 employees in the state spend at least eight percent of their payroll on employee benefits, or pay into a state fund for the uninsured.[105] Walmart, with about 17,000 employees in Maryland, was the only known company to not meet this requirement before the bill passed. On July 7, 2006, the Maryland law was overturned in federal court by a United States District judge who held that a federal law, the Employee Retirement Income Security Act (ERISA), preempted the Maryland law. The judge said the law would "hurt Walmart by imposing the administrative burden of tracking benefits in Maryland differently than in other states."[106]

On April 17, 2006, Walmart announced it was making a health care plan available to part-time workers after one year of service, instead of the prior two-year requirement.[107] By January 2007, the number of workers enrolled in the company's health care plans increased by 8%, which Walmart attributed to the introduction of less expensive insurance policies.[108] However, even with this increase, less than half of Walmart's employees, or 47.4%, received health insurance through the company, with 10%, or 130,000, receiving no coverage at all.[108]

In March 2008, Walmart sued a former Walmart employee, Deborah Shank, to recover the money it spent for her health care after she was brain-damaged, restricted to a wheelchair, and nursing home-bound after her minivan was hit by a truck. Walmart sued the former employee for $470,000 after she received a settlement from the accident, citing that company policy forbids employees from receiving coverage if they also win a settlement in a lawsuit.[109] After a wave of bad publicity, Walmart dropped its suit.[110]

In 2011, Walmart stopped providing health insurance for part-time employees working under 24 hours per week.[111] In 2013, health insurance benefits will not be available to employees who work fewer than 30 hours per week. Experts in labor and health care observed that the change will shift the burden of providing health care for Walmart employees to the federal government, as eligibility for Medicaid has been expanded under the Patient Protection and Affordable Care Act (PPACA or ACA).[112][113] An analysis of Walmart's health plans as compared to plans offered in the ACA's health insurance marketplaces found that Walmart's plans have larger networks of providers than most plans in the marketplaces, and that gross premiums (before accounting for tax credits) are less expensive under Walmart's plans.[114]

In October 2014, Walmart announced that they were cutting benefits for all associates working under 30 hours a week, which is said to affect roughly 30,000 (2%) of Walmart's workforce. The company acknowledged a $500 million jump in health care expenses as the primary reason for their decision. Walmart executive Sally Welborn stated in a blog post, "This year, the expenses were significant and led us to make some tough decisions as we begin our annual enrollment."[115]

Walmart has been criticized for its policies against labor unions. Critics blame workers' reluctance to join the labor union on Walmart anti-union tactics such as managerial surveillance and pre-emptive closures of stores or departments who choose to unionize.[116][117][118] Walmart claims that it is not anti-union but "pro-associate", arguing that its employees do not need to pay third parties to discuss problems with management as the company's open-door policy enables employees to lodge complaints and submit suggestions all the way up the corporate ladder.[119] In 1970, Walmart's late founder Sam Walton resisted a unionization push by the Retail Clerks International Union in two small Missouri towns by hiring a professional union buster to conduct an anti-union campaign.[120] On the union buster's advice, Walton also took steps to show his workers how the company had their best interests in mind, encouraging them to air concerns with managers and implementing a profit-sharing program.[120] A few years later, Walmart hired a consulting firm, Alpha Associates, to develop a union avoidance program.[120]

In 2000, meat cutters in Jacksonville, Texas, voted to unionize. Walmart subsequently eliminated in-house meat-cutting jobs in favor of prepackaged meats, claiming that the measure would cut costs and prevent lawsuits.[121] Walmart said that the nationwide closing of in-store meat packaging had been planned for many years and was not related to the unionization.[121] In June 2003, a National Labor Relations Board judge ordered Walmart to restore the meat department to its prior structure, complete with meat-cutting, and to recognize and bargain with the union over the effects of any change to case-ready meat sales.[122]

Walmart's anti-union policies also extend beyond the United States. The documentary Walmart: The High Cost of Low Price, shows one successful unionization of a Walmart store in Jonquière, Quebec, Canada, in 2004, but Walmart closed the store five months later because the company did not approve of the new "business plan" a union would require.[123][124] In September 2005, the Québec Labor Board ruled that the closing of a Walmart store amounted to a reprisal against unionized workers and has ordered additional hearings on possible compensation for the employees, though it offered no details.[125]

In March 2005, Walmart executive Tom Coughlin was forced to resign from its board of directors, facing charges of embezzlement.[126] Coughlin said that the money was used for an anti-union project involving cash bribes paid to employees of the United Food and Commercial Workers Union in exchange for a list of names of Walmart employees that had signed union cards.[126] He also said that the money was unofficially paid to him, by Walmart, as compensation for his anti-union efforts.[126] In August 2006, Coughlin pleaded guilty to stealing money, merchandise, and gift cards from Walmart, but avoided prison time due to his poor health. He was sentenced to five years probation and required to pay a $50,000 fine and $411,000 in restitution to Walmart and the Internal Revenue Service. A United States attorney has stated that no evidence was found to back up Coughlin's initial claims, and Walmart continues to deny the existence of the anti-union program, though Coughlin himself apparently restated those claims to reporters after his conviction.[127]

Walmart has also had some run-ins with the German Ver.di labor union as well.[128] These issues, combined with cultural differences and low performing stores, led Walmart to pull out of the German market entirely in 2006.[129]

In August 2006, Walmart announced that it would allow workers at all of its Chinese stores to become members of trade unions, and that the company would work with the state-sanctioned All-China Federation of Trade Unions (ACFTU) on representation for its 28,000 staff.[130][131] However, the All-China Federation of Trade Unions has been criticized because it is the only trade union in China and as a tool of the government, ACFTU has been seen as not acting in the best interest of its members (workers), bowing to government pressure on industry growth and not defending workers' rights.[132]

In November 2012, the United Food & Commercial Workers joined with several Walmart workers with a plan to go on strike on Black Friday at several stores nationwide in protest to low pay, an increase in health insurance premiums, and not being given the option to have the day off or having Thanksgiving off.[133] Walmart has countered this by saying that the strike is illegal due to the union not being sanctioned by the company, and that the striking workers are a small minority of the company's workforce, with the vast majority of workers willing and ready to work the retail industry's busiest day of the year.[134]

In May 2013, Walmart employees associated with a union-backed labor group called OUR Walmart began what it says will be the first "prolonged strikes" in Walmart's history.[135]

For Thanksgiving 2013, CNN estimates that approximately a million United States Walmart employees would work over the course of the holiday, with big specials starting at 6:00 pm on Thanksgiving Day. The company stated that employees would receive "a nice Thanksgiving dinner at work", extra "holiday pay", and 25% discount off one purchase, regardless of how many items are purchased at that time.[136] According to the Cleveland Plain Dealer, the extra holiday pay equaled the average daily shift the employee worked during the previous two weeks. Walmart would also expand its one-hour guarantee from three items the year before to twenty-one items. This means that a customer standing in line for such an item from 6–7 pm or from 8–9 pm would be guaranteed to get it at that price some point before Christmas.[137]

In July 2019, the Walmart subreddit was flooded with pro-union memes in a protest to the firing of an employee who posted confidential material to the subreddit. Many of these posts were angry with Walmart surveying its staff on the Internet. The posting of the union content is in a response to the aforementioned alleged anti-union position Walmart has taken in the past.[138][139][140]

In July 2018, Walmart was granted a patent titled "Listening to the Frontend"[141] for audio surveillance technology that could allow it to record employees as well as its shoppers.[142] The company says the technology could help it boost worker productivity by generating performance metrics for each employee based on cashier area sounds, such as checkout scanner beeps, and even conversations.[143] It wouldn't say whether it plans to actually implement the multi-sensor system.[144]

In 2007, a gender discrimination lawsuit, Dukes v. Walmart Stores, Inc., was filed against Walmart, alleging that female employees were discriminated against in matters regarding pay and promotions. A class action suit was sought, which would have been the nation's largest in history, covering 1.5 million past and current employees.[145] On June 20, 2011, the United States Supreme Court ruled in Walmart's favor, stating that the plaintiffs did not have enough in common to constitute a class.[146] The court ruled unanimously that because of the variability of the plaintiffs' circumstances, the class action could not proceed as presented, and furthermore, in a 5–4 decision that it could not proceed as any kind of class action suit.[147] Several plaintiffs, including the lead plaintiff, Betty Dukes, expressed their intent to file individual discrimination lawsuits separately.[148]

According to a consultant hired by plaintiffs in a sex discrimination lawsuit, in 2001, Walmart's EEOC filings showed that female employees made up 65 percent of Walmart's hourly paid workforce, but only 33 percent of its management.[149][150] Just 35 percent of its store managers were women, compared to 57 percent at similar retailers.[150] Walmart says comparisons with other retailers are unfair, because it classifies employees differently; if department managers were included in the totals, women would make up 60 percent of the managerial ranks.[150] Others have criticized the lawsuit as without basis in the law and as an abuse of the class action mechanism.[151][152][153] In 2007, Walmart was named by the National Association for Female Executives as one of the top 35 companies for Executive Women.[154]

Walmart's rating on the Human Rights Campaign's Corporate Equality Index, a measure of how companies treat LGBT employees and customers, has increased greatly during the past decade.[155] The company was praised for expanding its anti-discrimination policy protecting gay and lesbian employees,[156] as well as for a new definition of "family" that included same-sex partners.[157][158][159] However, they have been criticized by the HRC in other areas, such as not renewing its membership in the National Gay and Lesbian Chamber of Commerce.[160]

In January 2006, Walmart announced that "diversity efforts include new groups of minority, female and gay employees that meet at Walmart headquarters in Bentonville to advise the company on marketing and internal promotion. There are seven Business Resource Groups: women, African-Americans, Hispanics, Asians, Native Americans, Gays and Lesbians, and a disabled group."[161]

Walmart has been criticized for not providing adequate supervision of its foreign suppliers. It has also been criticized for using sweatshops and prison labor. In 1995, Chinese dissident Harry Wu charged that Walmart was contracting prison labor in Guangdong Province. Walmart said it did not use prison labor.[185] There have also been reports of teenagers in Bangladesh working in sweatshops 80 hours per week at $0.14 per hour, for Walmart supplier Beximco. The documentary film Walmart: The High Cost of Low Price shows images of Walmart goods-producing factories in poor condition, and factory workers subject to abuse and conditions that the documentary producers considered inhumane.

Walmart currently uses monitoring which critics say is inadequate and "leaves outsiders unable to verify" conditions. Since Walmart will not release its audits or factory names, outside organizations are expected to simply accept Walmart's claims as fact.[186] Critics suggest an agency such as Social Accountability International or the Fair Labor Association should do the monitoring. In 2004, Walmart began working with Business for Social Responsibility, a San Francisco, California-based nonprofit organization, to reach out to groups active in monitoring overseas plants.[187]

In June 2006, Walmart was excluded from the investment portfolio of The Government Pension Fund of Norway, which held stock values of about $430 million in the company, due to a social audit into alleged labor rights violations in Walmart operations in the United States, Canada, Latin America, Africa, and Asia.[188] Although Walmart did not respond to questions from the fund's auditors, it later said the decision "[does not] appear to be based on complete information".[189]

On November 24, 2012, a fire in a Bangladesh clothing factory resulted in the death of 112 workers. Survivors said that fire extinguishers did not work, an exit door was locked, and that when the fire alarm went off, bosses told workers to return to their sewing machines. Victims were trapped or jumped to their deaths from the eight-story building, which had no fire escapes or exits. Initially Walmart said it could not confirm that it had ever sourced apparel from the factory. However photos taken by Bangladeshi labor activists showed Walmart-branded clothing present in the factory after the fire. Walmart later said that a supplier had subcontracted work to the factory "in direct violation of our policies." However, on December 4, documents revealed that at least five supplier companies had been using the Bangladesh factory to provide apparel for Walmart and its subsidiary Sam's Club during the past year. It was also disclosed in a November 24 article in The New York Times that officials who had attended a 2011 Bangladesh meeting to discuss factory safety in the garment industry said that the Walmart official there had played the lead role in blocking an effort to have global retailers pay more for apparel to help Bangladesh factories improve their electrical and fire safety.[190][191][192][193]

In 2012, The New York Times reported that Walmart had been made aware eight years earlier that executives of Walmart México, its subsidiary in that country, had paid millions of dollars in bribes to local officials to expedite permits for construction and operation of its many stores in that country. The company had opened many stores in Mexico in the late 1990s and early 2000s, attempting to widely establish itself before competitors could. Sergio Cicero, a lawyer who had been responsible for obtaining those permits and was bitter about being passed over for the position of general counsel with Walmart México provided the company's corporate general counsel's office with evidence showing that the company had made large payments to gestores, workers who deal with bureaucracies on behalf of citizens and businesses, with coded indications that the money was being passed on to officials to expedite permits.[194][195]

Company officials hired a veteran FBI agent to conduct a preliminary inquiry, instead of hiring an outside law firm as it usually did for major inquiries, such as a similar one in 2003 which found that Walmart México had been helping high-volume customers evade that country's sales taxes. The special investigative team found evidence corroborating almost all of Cicero's allegations, and evidence suggesting that the bribery had been even more extensive, including $16 million in "donations" to local politicians and their organizations. They recommended opening a full investigation, and possibly notifying the Justice Department, as it appeared that both Mexican law and the United States Foreign Corrupt Practices Act (FCPA) had been violated.[194]

Executives at Walmart México chafed at the investigation, reportedly complaining that that was how business was done in the country. They told their counterparts at corporate headquarters that the investigators were being too aggressive, and some of the company's top executives apparently agreed. Feeling Walmart had had enough bad publicity in recent years, they allowed the investigation to be concluded by a short report from José Luis Rodríguezmacedo, the head of Walmart México, who had himself been suspected of involvement. It largely blamed Cicero, claiming he had fabricated the allegations to conceal his own embezzlement from the company with the help of the gestores, one of whom was his wife's law partner. Some Walmart executives found the report incomplete and contradictory, but the investigation was closed. None of the Mexican executives investigated were ever disciplined, and some were even promoted afterwards.[194]

In December 2011, several months before the story broke, Walmart announced it had begun an internal review of its FCPA compliance procedures. It was unclear how the Justice Department might respond. While the FCPA's five-year statute of limitations appeared to bar prosecution under that statute, falsified financial statements in the years since could be seen as obstruction of justice under the Sarbanes-Oxley Act, and acts taken to conceal the bribery investigation subsequent to 2007 could constitute conspiracy.[196]