Wal-Mart wins labor complaint

Wal-Mart Stores Inc., the world’s largest retailer, can’t be held liable under U.S. law for labor conditions at some of its overseas suppliers, a federal judge said.

A complaint filed last year in Los Angeles by the International Labor Rights Fund claimed that employees of Wal-Mart suppliers in China, Bangladesh, Indonesia, Swaziland and Nicaragua were forced to work overtime without pay and in some cases were fired because they tried to organize unions. The labor rights group sought to represent hundreds of thousands of employees of Wal-Mart’s overseas suppliers.

The foreign workers sued as third-party beneficiaries to Wal-Mart’s contracts with garment factories outside the U.S. The complaint said that the contracts required suppliers in the five countries to comply with local labor standards and that the retailer’s failure to enforce those terms meant the employees were working under “sweatshop” conditions.

“Plaintiffs argue generally for defendant, and therefore all businesses, to be responsible for the employment conditions for their own workers and all the workers employed by their suppliers,” U.S. District Judge Andrew Guilford said in a preliminary ruling Dec. 12. These “negligence claims go well beyond the recognized limits of liability and cannot be accepted.”

Guilford said the facts alleged by the labor rights group didn’t support their claim for breach of contract or negligence.

Dan Stormer, a lawyer representing the International Labor Rights Fund, could not be reached for comment.

Wal-Mart, based in Bentonville, Ark., is the world’s largest private employer, with more than 1.8 million workers.

The company also can’t be held liable under the U.S. Alien Tort Claims Act, which allows foreign nationals to pursue human rights claims in U.S. courts, because the alleged violations didn’t constitute “heinous conduct,” Guilford said.

Lawyers for the workers will be allowed to file an amended complaint, according to the ruling.

Beth Keck, a spokeswoman for Wal-Mart, could not be reached for comment.