Wal-Mart Fires Two Employees in Connection with Phone Monitoring

Wal-Mart Stores said it fired a systems technician and a management associate in connection with the interception of text messages and recording of telephone conversations without authorization.

The Bentonville, Ark., retailer said it took the action after an internal investigation revealed an employee had monitored and recorded conversations between the company's public relations staff and a reporter from the New York Times over a four-month period between September 2006 and January.

The technician, in separate instances, also intercepted text messages and pages, including communications that did not involve Wal-Mart associates.

In a conference call with reporters Monday, Wal-Mart declined to identify the employee.

The retailer said the telephone recordings were not authorized by the company, and violated its policy of forbidding such activity without prior written approval from the legal department.

After initially releasing a statement that the company had disciplined two management associates "for failing to carry out their management duties," Wal-Mart clarified Monday afternoon that the company had in fact fired one of those management associates in addition to the systems technician.

All three employees worked for Wal-Mart's IS department, said Wal-Mart spokeswoman Mona Williams. None of Wal-Mart's public relations staff were aware of the surveillance, she added.

The Wal-Mart technician used company equipment to record the phone conversations, and singled out the New York Times reporter by programming the reporter's number into the recording equipment and setting it to tape conversations automatically.

The text-monitoring, which didn't target the New York Times reporter or any other individual Wal-Mart could identify, was carried out with equipment that did not belong to the company, Williams said.

No Laws Violated

According to Wal-Mart, the technician didn't violate any laws when he recorded conversations involving Wal-Mart employees because employees have already been notified that the company's communications systems may be subject to monitoring and recording.

After being tipped off to the recordings, the retailer began an investigation on Jan. 11, and notified the U.S. attorney for the Western District of Arkansas on Jan. 13.

On Thursday, Wal-Mart learned the U.S. Attorney's office would conduct its own investigation of the pager intercepts and phone call recordings.

The FBI in Washington, D.C., said the agency is reviewing the information from Wal-Mart "to determine if there was a violation of federal law and if the FBI has jurisdiction."

NBC's Pete Williams broke the news of the investigation on CNBC earlier today.

Wal-Mart said it notified the New York Times of the event today.

Times Statement

"We are troubled by what appears to be inappropriate taping of our reporter's conversations," New York Times spokeswoman Diane McNulty said. "At this point, we don't know many of the key facts, such as what the purpose of this taping was, and the extent, if any, to which the action was authorized."

As a result of the incident, Wal-Mart said it also will take disciplinary action against two management associates for "failure to carry out their management duties."

"The company believes that these pager intercepts and the recordings of these telephone calls were wrong and has taken a number of actions to further strengthen our policies and controls," said Mona Williams, Wal-Mart's vice president of Corporate Communications.

Separately, Wal-Mart is taking a number of steps to strengthen its policies surrounding the monitoring and recording of commuincations, and has removed the recording equipment and related hardware from the system.

Wal-Mart carried out a two-month investigation in connection with the phone and text surveillance. An outside computer forensics firm hired by Wal-Mart checked out more than 100 company computers, sifting through "terabytes of data," Williams said.