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NEW YORK (CNN/Money) -
Wal-Mart will escape criminal sanctions and pay $11 million to settle claims stemming from a federal investigation of illegal workers hired by the company's cleaning contractors, the company said Friday.
The agreement came after the government concluded its more than four-year criminal investigation and said it would not pursue charges against Wal-Mart or any Wal-Mart associates, the world's largest retailer said.
"We acknowledge we should have had better safeguards in place to make sure our (floor-cleaning) contractors hired only legal workers," Mona Williams, vice-president of corporate communications at Wal-Mart said during a conference call Friday.
Williams added that the company has "taken steps to put its house in order," like having all floor-cleaning now done by Wal-Mart employees and requiring written contracts for all maintenance agreements.
However, the company will still use outside contractors for other maintenance jobs.
The more than four-year investigation was led by Immigration and Customs Enforcement agents and federal prosecutors in Pennsylvania. It produced 245 arrests of undocumented workers in 2003.
At the time of the raids, the government said they had wiretaps showing that Wal-Mart executives knew the company was using illegal workers. However, as part of the settlement the company will not admit any wrongdoing or liability.
Williams said no criminal charges have been pressed against the executives mentioned at the time of the raids and that those officials have not been impacted by the investigation. She added that Wal-Mart did not know about the use of illegal labor until the arrests of undocumented workers.
Attention getting settlement
Wal-Mart, which posted a fourth-quarter profit of $3.16 billion, said the $11 million settlement fee was a large sum "designed to get attention."
"It is a reminder to businesses everywhere that they have a duty to make sure their outside contractors are following immigration and labor laws," said Williams.
"The government can now use the funds for training and other initiatives that lead to better detection and prosecution of individuals and companies that prey on undocumented individuals," Tom Mars, Wal-Mart's general counsel, said in a statement.
The settlement also calls for $4 million in criminal forfeitures by 12 firms Wal-Mart (Research) hired to provide janitorial services, people familiar with the agreement told CNN. These people said some individuals associated with the contractors have agreed to plead guilty to federal violations, but no details were available Thursday night.
Gil Garcia, a lawyer for those arrested in the raids, said the settlement will result in pending criminal cases against his clients being dropped.
"I believe justice has been served," Garcia said in a statement issued to CNN.
"I think this is very good for the government, because it shows that the law has been enforced. I also believe that this is good for Wal-Mart, because it demonstrates that Wal-Mart is no longer adhering to the practice of hiring undocumented immigrants. And I also believe that it is good for the undocumented workers, because by their cooperation they may have a way to remain in the United States."
Wal-Mart stock edged lower in afternoon New York Stock Exchange trading Friday.
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