Home Depot stops doing business with federal government.

June 17, 2002 3:14 AM

Home Depot stops doing business with federal government. Home Depot Inc., the nation's largest hardware and home-improvement chain, has told its 1,400 stores not to do business with the U.S. government or its representatives. [snip] Most of Home Depot's managers interviewed by the Post-Dispatch shared the confusion. All the managers contacted declined to be quoted, but most said they didn't know what was behind the company's refusal to sell to the federal government.
posted by percine (7 comments total)

Really not a lot of info in the article. A certain amount of specualtion is about all. It will be interesting to find out what the root cause of this is. Sounds like someone is a bit pissed about something though.

Gray said the refusal to sell to the government was "a business decision based upon the company's strategic direction."

Is turning away profit a strategic direction?

Sounds like a good thing for Lowes and other home stores.
posted by a3matrix at 4:27 AM on June 17, 2002

Turning away profit might be a strategic decision if the cost for the profit is too high. One of the details that sheds a little light is the section where it describes the three federal laws that its trying to avoid. They all relate to affirmative action. They'd be faced with additional costs to recruit veterans.

I'm hoping that its not over race, more likely I think they're worried about having to hire handicapped people. Home Depots and other big chain home improvement stores all take a toll on peoples bodies (or working at UPS or ...), which is why I've always seen a predominantly younger crowd working there, and a few senior people. They could end up in a position where they have to create jobs for people who aren't fit for the jobs they actually do have available.
posted by substrate at 5:07 AM on June 17, 2002

according to the article, it seems like Home Depot doesn't want to fall under federal anti-discrimination laws:

...Executive Order 11246 of 1965, which bans discrimination against any employee or applicant for employment because of race, color, religion, sex or national origin...Section 503 and Section 505 of the Rehabilitation Act of 1973, which requires affirmative action and prohibits employment discrimination by federal government contractors and subcontractors....[and] The Vietnam Era Veterans' Readjustment Assistance Act of 1974, which requires that anyone doing business worth $25,000 or more with the federal government must take affirmative action to hire and to promote qualified targeted veterans, including special disabled veterans, veterans of the Vietnam era, and any other veterans who served on active duty during a war or in a campaign or an expedition. It would apply to Gulf War veterans and those fighting the war on terrorism.

People who know labor law: are the employment discrimination restrictions on federal contractors really that much more stringent than those on all mid-sized to large businesses? This really seems odd, unless Home Depot has a Denny's skeleton in its closet and is making a vain attempt to cover its butt.

Hmm. Seems like you beat me to it, Substrate. :) On handicapped employees, though, I thought that all that was covered under ADA, which isn't mentioned in the article. I find it hard to believe that laws and orders from the 1960's and 1970's apply to the handicapped, who didn't gain protected-class status until the ADA was passed in the eariy 1990s (IIRC).
posted by Vetinari at 5:10 AM on June 17, 2002

A number of derivative articles elsewhere and on Associated Press but no additional info so far. Watch stock-market related news services. The only logical reason seems to be, as stated in the article, to avoid compliance with certain Federal laws that bind major government vendors. Three laws/exec orders are noted but there are probably others:

The corporate notice says commercial credit-card customers will be alerted with their June bill that purchases would not be allowed ''that would cause the company to be covered by or responsible in any way for compliance with'' three federal laws or executive orders:

• An executive order of 1965 that bans discrimination against any employee or applicant for employment because of race, color, religion, sex or national origin.

• Sections of the Rehabilitation Act of 1973, which requires affirmative action and prohibits employment discrimination by federal government contractors and subcontractors.

• The Vietnam Era Veterans' Readjustment Assistance Act of 1974, which requires that anyone doing business worth $25,000 or more with the federal government must take affirmative action to hire and to promote qualified targeted veterans.
posted by beagle at 5:11 AM on June 17, 2002

Interestingly, just Thursday Home Depot chairman Nardelli visited White House to commit his employees to 1,000,000 more hours of volunteer services.
posted by beagle at 6:09 AM on June 17, 2002

Vetinari, yes, it becomes a huge additional hassle if you are considered a "federal contractor." There are unique rules for contractors regarding affirmative action programs (in general, there is no requirement that private employers have an affirmative action program). In fact, there is an entire agency -- the Office of Federal Contract Compliance Programs -- devoted solely to investigating (and, if necessary, suing) federal contractors for compliance with those laws. Needless to say, it's a huge burden. Choosing not to saddle itself with that burden doesn't suggest to me that Home Depot necessarily has anything to hide.
posted by pardonyou? at 6:09 AM on June 17, 2002

Probably because the US Govt is so late in paying its bills.
posted by stbalbach at 12:51 PM on June 17, 2002