OSHA's Wal-Mart Investigation

The safety agency is looking into the retailer's handling of one whistleblower's complaint of suspected wrongdoing

by Pallavi Gogoi

The Labor Dept.'s Occupational Safety & Health Administration (OSHA) has opened an investigation into a whistleblower complaint against Wal-Mart Stores (WMT). OSHA sent a letter to Chalace Epley Lowry, the employee involved, saying the agency is "notifying the party named in the complaint about the filing of the complaint" and "conducting an investigation into your allegations," according to a copy of the letter reviewed by BusinessWeek.

BusinessWeek wrote in June about Lowry (BusinessWeek.com, 6/13/07), an administrative assistant in the company's communications department, after she reported what she believed could have been insider trading by a senior executive. The executive was quickly cleared. But in the process, Lowry's identity was revealed to the executive. This resulted in her having to look for another position within the company, with no guarantee that she would get one.

Stressful Complaint

It's unclear how strong Lowry's OSHA complaint is since she ultimately did find another job within Wal-Mart's legal department (BusinessWeek.com, 10/16/07). She has decided to pursue her complaint with OSHA because she contends Wal-Mart broke its own promise of confidentiality by revealing her identity, which caused her three months of extreme stress as she looked for a new job. She says she has been diagnosed with stress-induced angina, has separated from her husband, and has had her house foreclosed. "Wal-Mart has been very careful about the way it's handled me—there's been no loss of wages and I haven't been demoted," says Lowry. "Still, I think that I did the right thing and they did me wrong by disclosing my identity."

Wal-Mart declined to comment for this story. In the past, the company has said it revealed Lowry's identity only after she agreed to the disclosure. (Lowry says she was never given a choice.) Wal-Mart also said it decided to move Lowry out of the communications department only because she asked for the change.

A Political Issue

The investigation comes amid a debate over the role of whistleblowers in American business. Many Democrats have argued that current whistleblower protection laws aren't strong enough, even in the wake of legislation passed after the accounting scandals at Enron and WorldCom. On Nov. 1, Representative Lynn Woolsey (D-Calif.) introduced a new proposal to strengthen and standardize the laws. "Employees who expose illegal practices or safety violations benefit us all," says Woolsey. "But when they blow the whistle, they are often retaliated against. They are demoted, lose their jobs, and are blacklisted."

Whistleblowers frequently do not fare well after reporting what they believe to be wrongdoing. OSHA administers whistleblower protections under the Sarbanes-Oxley Act, which was enacted July 30, 2002. In an article published in the latest issue of the William & Mary Law Review, Richard Moberly, an assistant professor of law at the University of Nebraska, writes that during the first three years, only 3.6% of the employees who filed Sarbanes-Oxley complaints with OSHA won. The agency fielded 491 employee complaints, resolved 361 of them, and only 13 times were the decisions in favor of the employees. "In the first three years after the statute's enactment, the act hasn't protected the vast majority of employees who filed a Sarbanes-Oxley retaliation claim," says Moberly.