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The New York Times reports this morning that experts are mystified about why Walmart has spent more than a million dollars in legal fees to fight the imposition of a $7,000 fine by the federal Occupational Safety and Health Administration (OSHA) that was related to the trampling death of a part-time employee on the day after Thanksgiving in 2008.

Here’s how the Times frames the story:

Before OSHA assessed the fine, “Wal-Mart, seeking to avoid criminal charges, reached a settlement with the Nassau County, N.Y., district attorney that called for the company to adopt new crowd management techniques in all 92 of its stores in New York State. At the time, Wal-Mart also agreed to create a $400,000 fund for customers injured in the stampede and to donate $1.5 million to various community programs in Nassau County.

“More recently, the company announced improved crowd-control policies for all its United States stores to try to prevent such an accident from happening again.

“But in fighting the federal fine, Wal-Mart is arguing that the government is improperly trying to define ‘crowd trampling’ as an occupational hazard that retailers must take action to prevent.

“Wal-Mart’s all-out battle against the relatively minor penalty has mystified and even angered some federal officials. In contesting the penalty, Wal-Mart has filed 20 motions and responses totaling nearly 400 pages and has spent at least $2 million on legal fees, according to OSHA’s calculations.”

The problem, according to federal officials, is that every time Walmart files a motion or puts up a fight, government lawyers have to do corresponding work, which takes time and costs money. Five full-time lawyers have spent 17 percent of all available attorney hours in the Labor Department’s New York office, according to the story.

David Tovar, a Wal-Mart spokesman, tells the Times that there is a larger principle involved: “OSHA wants to hold Wal-Mart accountable for a standard that was neither proposed nor issued at the time of the incident. The citation has far-reaching implications for the retail industry that could subject retailers to unfairly harsh penalties and restrictions on future sales promotions.”

The Times writes: “Wal-Mart officials worry that if the OSHA Review Commission upholds the $7,000 penalty and concludes that surging crowds are an occupational hazard, then OSHA will then be free to look over Wal-Mart’s shoulder whenever it has a big sale to make sure that it has taken adequate steps to control crowds. The company is also concerned that it could face far larger fines if OSHA ever concluded that it again violated its crowd-control responsibilities. Under OSHA rules, $7,000 is the maximum fine for a serious violation, but it can impose a $70,000 fine for a willful violation.”
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