In the matter of Wal-Mart Stores, Inc.
ASSURANCE OF VOLUNTARY COMPLIANCE
III. Self-Monitoring and Other Measures to Ensure Compliance
A. Supervision and Accountability
B. Internal Performance Checks
C. External Compliance Checks
D. Youth Access Compliance Designee
A. Supervision and Accountability
1. During performance evaluations occurring more than six (6) months after the Effective Date of each cashier whose duties include the direct sale of tobacco products to retail customers, Wal-Mart shall evaluate such cashier’s compliance with all company procedures designed to prevent purchases of tobacco products by underage persons, to the extent, if any, that there then exists available information specific to such cashier based upon internal performance checks, external performance checks, law-enforcement compliance checks, supervisory reports, customer complaints, and a current review of performance pursuant to Section II.B, above.
2. To the extent that Wal-Mart evaluates a cashier based in part upon the rate at which that cashier scans or otherwise transacts items per hour, Wal-Mart, beginning no later than six (6) months after the Effective Date, (a) shall not weigh that cashier’s items-per-hour rate as a positive factor in any evaluation of the cashier if information about that cashier available from other sources (including internal performance checks, external performance checks, law-enforcement compliance checks, supervisory reports, customer complaints, and assessments conducted pursuant to Section II.B, above) reasonably demonstrates that the cashier has, during the period since the cashier’s last evaluation, failed to comply with Wal-Mart’s policies regarding youth access (including, but not limited to, the policies set forth in this Assurance); and (b) shall, to the extent reasonable and practicable and based upon relevant, available information, take into consideration that cashier’s proper compliance with Wal-Mart’s policies regarding youth access in assessing that cashier’s items-per-hour rate, including whether such rate has been reduced as a result of such compliance (in which case such rate shall not, to the extent the amount of such reduction can reasonably be attributed to such compliance, be weighed as a negative factor in that cashier’s evaluation).
3. Beginning on the Effective Date, Wal-Mart shall instruct its store managers and assistant managers within fifteen (15) days after their first assuming responsibility for managing employees who directly sell tobacco products to retail customers (or within 15 days after the Effective Date for such managers who first assume such responsibility before the Effective Date) that their responsibilities include the monitoring and supervision of staff compliance with youth access laws and policies on an ongoing basis, and shall inform such managers that instances of compliance and non-compliance with youth access laws and policies on the part of those supervised will be given consideration in connection with future employment decisions regarding that manager.
Wal-Mart shall, within sixty (60) days after the Effective Date, implement a policy requiring each store manager to report in writing or electronically each alleged violation of law concerning the sale of tobacco products to underage persons occurring at the store to the person designated pursuant to Section III.D, below, within three (3) business days after receipt of notice of the alleged violation. Wal-Mart’s corporate office shall maintain a record of all reported alleged violations and their dispositions for three (3) years.
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B. Internal Performance Checks
Beginning on the Effective Date, Wal-Mart shall implement and, as long as it sells tobacco products at retail in any State, maintain a program of internal performance checks in the States designed to assist Wal-Mart in determining whether stores and staff are in compliance with youth access laws and policies. This program shall at minimum have the following features:
1. Wal-Mart shall conduct at least 3 internal performance checks at varying or random times of the day at each store that has either received notice from a law enforcement agency of an alleged violation of law concerning the sale of tobacco products to underage persons that occurred after the Effective Date, or has failed an external performance check conducted as provided in Section III.C, below. Internal performance checks conducted pursuant to this Section III.B.1 shall include at least two checks of the individual employee who was the subject of the previous alleged violation or who failed the external performance check, as the case may be, unless Wal-Mart has terminated that employee. Wal-Mart shall begin performing the checks described in this Section III.B.1 within forty-five (45) days after Wal-Mart’s corporate office first receives written or electronic notice of the alleged violation or failure. Internal performance checks conducted pursuant to this Section III.B.1 shall be carried out in the manner described in Section III.B.2, below. The results of internal performance checks conducted pursuant to this Section III.B.1 shall not be included in the calculation of the Success Rate of an External Program.
2. An “internal performance check” shall consist of one attempted purchase of a tobacco product. Internal performance checks shall be discreet and utilize procedures necessary to ensure that those whose performance is being checked (both employees and managers responsible for the performance of the employees) have no reason to know that a given attempt to purchase a tobacco product is a performance check. An internal performance check shall either: (a) where it is legal to do so, use a person who is under the legal age to buy tobacco products but who will attain such legal age within one calendar year of the date of the check in order to test both whether identification is being requested as required and whether sales are made in spite of the presentation of an acceptable form of identification (see Section V.A.8, below) accurately showing the tester’s age; or (b) use a person of legal age to buy tobacco products who is within the age range requiring that he or she be asked to produce identification in order to test whether identification is requested as required by store policy and this Assurance. The check shall test (and success of the check shall be determined based upon) whether the employee selling the tobacco product asked the purchaser to produce identification, whether the employee checked the identification to verify both that the purchaser is of legal age and that the identification provided by the purchaser is an acceptable form (see Section V.A.8, below), and, in the case of an attempted purchase by a person under legal age to buy tobacco products, whether the sale was consummated. At Wal-Mart’s sole discretion, internal performance checks may be performed by Wal-Mart employees, outside contractors, or any combination thereof.
3. In the event of a failed internal performance check for an employee whom Wal-Mart desires to retain, the store manager or assistant manager shall inform the employee of the test result, instruct the employee on what constitutes proper performance, and caution the employee to avoid further instances of noncompliance with youth access laws. In addition, the store manager or assistant store manager shall, within three (3) business days after receipt of the test result, inform the person designated pursuant to Section III.D, below, of such failed internal performance check. Wal-Mart shall also take whatever other action the company deems necessary to ensure future compliance.
4. Wal-Mart shall inform the employee who passes an internal performance check and his or her store manager of the successful internal performance check.
5. The Attorneys General agree not to institute legal proceedings based on any sales of tobacco products that are made during internal performance checks conducted pursuant to this Assurance.
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C. External Performance Checks
In addition to conducting the internal performance checks described above, Wal-Mart shall select and retain, at Wal-Mart’s expense, an independent entity reasonably acceptable to the Attorneys General to conduct external performance checks. This independent entity shall conduct external performance checks as follows:
1. External performance checks shall be conducted pursuant to a series of consecutive six-month External Programs, with each subsequent External Program beginning on the day after the previous External Program ends (unless, as provided in Section III.C.3, below, external performance checks are no longer required).
2. The first External Program shall commence within ninety (90) days after the Effective Date, unless Wal-Mart is unable, in spite of diligent efforts to do so, to locate and complete an agreement with an entity to conduct the checks in the manner provided herein, in which case such External Program shall commence as soon thereafter as circumstances permit, but in any event no later than one-hundred fifty (150) days after the Effective Date. During each six-month External Program external performance checks shall be conducted at 325 stores within the States, such stores to be selected at random by the independent entity, with one external performance check conducted at each selected store.
3. At the completion of each six-month External Program, Wal-Mart shall calculate that External Program’s Success Rate, which is defined for these purposes as the percentage of external performance checks conducted during that six-month External Program (not including any re-checks) that were successful. An external performance check shall be considered successful for these purposes if, pursuant to that external performance check, an attempt to purchase a tobacco product occurs but the purchase of the tobacco product is not completed.
While Wal-Mart’s goal regarding the sale of tobacco products is to eliminate all sales to underage persons, for the purposes of an External Program Wal-Mart’s progress shall be measured by whether its Success Rate with respect to that External Program equals or exceeds 90%. In the event that Wal-Mart’s Success Rate for all of any four (4) consecutive External Programs occurring after the completion of the initial six (6) such Programs is 90% or higher, then external performance checks shall not be required thereafter. In addition, external performance checks shall not be required during any period in which there is no State in which Wal-Mart is selling tobacco products at retail. At its sole discretion, Wal-Mart may continue to conduct external performance checks at Wal-Mart’s expense during any period when external performance checks are not required by this Assurance, and checks so conducted shall be subject to the provisions of Sections III.C.4 through III.C.8 of this Assurance.
4. An “external performance check” shall consist of one attempted purchase of a tobacco product. External performance checks shall be conducted by the independent entity as set forth in the protocol attached hereto as Exhibit A. The independent entity shall be instructed to conduct external performance checks for the purpose of obtaining an accurate and reliable indication of actual store practices in connection with sales of tobacco products. No store selected to be checked will be identified to Wal-Mart, directly or indirectly, until after the check of that store is completed. In addition, external performance checks required under this Assurance shall be conducted as follows:
(a) Upon the written request of an Attorney General, such request to be made to the person designated by Wal-Mart pursuant to Section III.D below at least thirty (30) days prior to the beginning of the first or a subsequent six-month External Program, external performance checks conducted in that Attorney General’s State pursuant to the External Programs commencing thereafter shall (until further notice from that Attorney General) use a person who is under the legal age to buy tobacco products but who will attain such legal age within one calendar year of the date of the check; or
(b) Where an Attorney General does not make the request referred to in subsection (a), or upon the written withdrawal of a request by an Attorney General referred to in subsection (a), external performance checks conducted in that Attorney General’s State shall use a person of legal age to buy tobacco products who is within the age range specified by this Assurance (or such broader age range specified by Wal-Mart in its sole discretion) as requiring that he or she be asked to produce identification.
In the event that a store fails to perform successfully in an external performance check, Wal-Mart shall request that the independent entity conduct a second check (“re-check”) of the store within three (3) months.
5. Results of these external performance checks, including re-checks, shall be made available within three (3) business days by the independent entity to the store managers and assistant store managers of the stores that have been checked and to the person designated pursuant to Section III.D, below. Within three (3) business days after receiving notice of an external performance check, Wal-Mart shall communicate the result of the check to the cashier who was the subject of the test. Further, Wal-Mart shall require by contract that the results of the external performance checks be promptly reported by the independent entity to a person designated to receive such reports on behalf of the Attorneys General.
6. For purposes of retaining the independent entity to perform the external performance checks, Wal-Mart shall evaluate the performance of the entity on the competency of the entity’s performance in obtaining an accurate and reliable indication of actual employee practices in connection with the sale of tobacco products to underage persons, rather than on the basis of whether the results were favorable.
7. Wal-Mart shall cooperate in providing access to the Attorneys General to information relating to the results of the external performance checks.
8. The Attorneys General agree not to institute legal proceedings based on any sales of tobacco products that are made during external performance checks conducted pursuant to this Assurance.
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D. Youth Access Compliance Designee
As long as it continues to sell tobacco products, Wal-Mart shall designate a corporate-level employee to be responsible for monitoring compliance with the terms of this Assurance and, more generally, for overseeing efforts to comply with youth access laws, including collecting and reviewing reports of violations of laws concerning the sale of tobacco products to underage persons. Until Wal-Mart designates otherwise by written notice to the Attorneys General, such corporate-level employee shall be Ann Cato, Vice President of Compliance, Wal-Mart Stores, Inc.
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