It's done through the department, it's all above-board. It's done almost everywhere. The PD could explain the procedures if you give them a call and ask. An officer is acting as an officer, contracted out to the business.
I disagree with this. If the State or city pays to train and arm an officer than have the officer use his training and equipment to "moonlight", get hired and paid by a private company would be miss-us of public resorces. In the military I couldn't use my Humvee to go camping on the weekend as the taxpayer is paying for it and the gas. Same apply's here.
If he is hired and paid for a job while off duty he falls under that job. He is OFF duty and under the employement of the other company. Wallmart will be the big loser in this lawsuit.