How Walmart's 'Chain of Deniability' Works

Harold Meyerson explains how company distances itself from poor labor conditions

By Evann Gastaldo,  Newser Staff

Posted Nov 28, 2012 12:12 PM CST

(Newser) – After the devastating fire at a Bangladesh factory that supplied clothing to Walmart, the company quickly denied any direct link to the factory, blaming a supplier for subcontracting work to the factory without Walmart's knowledge or approval. But "that's the beauty of [Walmart's] chain of deniability," writes Harold Meyerson in the Washington Post: The company uses such a long chain of "contractors and subcontractors and sub-subcontractors" that when things like this happen, Walmart is not the employer of record and can refuse to take any responsibility for the terrible work conditions.

It doesn't just happen overseas: In America, tens of thousands of workers make little money and receive few benefits, employed as they are by temporary employment companies that, in turn, have contracts with Walmart. When one such company was charged with not providing pay rate information to its employees, you guessed it: Walmart skirted any citation. "Walmart neither pays its own nor takes responsibility for those who make and move its wares," Meyerson writes. The Bangladesh factory had no emergency exits—but "for America’s largest private-sector employer, the emergency exits are always open." Click for Meyerson's full column.

Boxes of garments lay near equipment charred in the fire that killed 112 workers Saturday at the Tazreen Fashions Ltd. factory,on the outskirts of Dhaha, Bangladesh, Wednesday, Nov. 28, 2012.
Boxes of garments lay near equipment charred in the fire that killed 112 workers Saturday at the Tazreen Fashions Ltd. factory,on the outskirts of Dhaha, Bangladesh, Wednesday, Nov. 28, 2012.   (AP Photo/Ashraful Alam Tito)
A Bangladeshi woman cries as she claims the body of her relative killed in a fire at a garment factory outside Dhaka, Bangladesh, Sunday Nov. 25, 2012.
A Bangladeshi woman cries as she claims the body of her relative killed in a fire at a garment factory outside Dhaka, Bangladesh, Sunday Nov. 25, 2012.   (AP Photo/ Jibon Amir)
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