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On November 30th, warehouse workers in Southern California have filed a petition in court to name Wal-Mart as a defendant in a federal wage-theft lawsuit, marking a significant turn in low-wage supply chain workers’ fight with the world’s largest retailer. Plaintiffs in the lawsuit seek back pay and damages for workers who allege they were cheated out of wages at a Mira Loma warehouse that serves Wal-Mart.
The addition of Wal-Mart in the ongoing federal suit would draw the nation’s largest retailer into a case that raises questions about the human cost of the company’s tightly controlled supply chain.
A court document filed in Los Angeles claims, “recent discovery has established that Wal-Mart bears ultimate responsibility for the violations of state and federal law committed against plaintiff warehouse workers,” who “perform hard physical labor for long hours with little pay under hot, hazardous, and dust-filled conditions, unloading and loading trucks destined for Wal-Mart stores and distribution centers throughout the United States.”
A lawyer for the workers stated, “we believe Wal-Mart knows exactly what is happening and is ultimately responsible for stealing millions of dollars from the low-wage warehouse workers who move Wal-Mart merchandise.”
The class-action lawsuit, filed in October 2011, accuses Schneider Logistics Transloading and Distribution, owner of a warehouse complex in Mira Loma, and two staffing agencies of shorting contract workers on pay.
In an email, Wal-Mart spokesman Dan Fogleman argued the allegation that the company was accountable for the maltreatment of the warehouse workers.
“We disagree with the characterization,” Fogelman said. “Wal-Mart is Schneider’s customer. We have a set of business needs that we pay them to meet, just like any company might hire an accounting firm to do taxes or an advertising firm to help launch a new product.” Fogelman also states the third party service providers, which Wal-Mart utilizes, are responsible for running their day-to-day business and manage their people independently of Wal-Mart. In a statement earlier this month, however, Fogelman said Wal-Mart was aware of problems at warehouses that serve the company. According to Fogelman, Wal-Mart had started inspecting facilities where concerns had been raised and would begin audits of warehouses such as Schneider “within days.”
The lawsuit alleges that Schneider and staffing agencies Premier Warehousing Ventures and Impact Logistics conspired to “cover up the extent of their wrongdoing by failing to keep mandatory payroll records, falsifying records of hours worked and compensation owed, and concealing, denying and/or misrepresenting to the workers the amount of their earnings and on what basis these earnings were calculated.”
The plaintiffs in the lawsuit have already secured several favorable rulings. If the court approves adding Wal-Mart, the Schneider warehouse’s only customer, to the case, lawyers for the workers will seek to prove that the company pressured Schneider to hold down costs by underpaying subcontractors who loaded semitrailers with goods destined for Wal-Mart stores. As many as 1,800 workers in Southern California could receive back pay and damages as a result of the case, and the impacts could be felt in other warehouse centers as well.
The success or failure of the suit could have wider implications for workers who try to sue subcontractors. Much of the retail sector’s supply chain is now founded on a system of outsourcing, where larger, brand-name players subcontract the work to smaller, little-seen players, who hold the legal liability for workers’ well-being. A similar prearrangement now persists in many food-processing and manufacturing operations as well.
Many hardworking laborers are exploited by the companies they work for, often being denied the very basic right to know what they had earned for the work that they were doing. Some workers are denied minimum wage, while others are not being paid appropriately for overtime worked.
If you or someone you know believes they have a workplace complaint, call Don Ho Law at 714-748-7715 to speak with an experienced employment law attorney who can discuss your options with you.
Published by Don Ho Law. Don Ho is a criminal defense and employment law attorney in Orange County, California.
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