UPDATE: Walmart added as defendant to warehouse workers lawsuit

Mitchell Hartman Nov 30, 2012

**Updated with responses from Walmart and Schneider Logistics

Today, lawyers for workers at a warehouse that moves goods exclusively for Walmart in Southern California charged that Walmart is responsible for ‘massive wage fraud” and other labor violations, and said they were seeking millions of dollars in damages from the giant retailer.

Labor lawyer Michael Rubin says this is the first time Walmart has been sued and alleged to be legally liable for wages and conditions of subcontracted workers in its warehouses, workers who don’t work directly for Walmart. The suit seeks compensatory and punitive damages.

The federal class-action lawsuit to which they are now adding Walmart as a defendant, Carrillo v. Schneider Logistics, was filed one year ago on behalf of as many as 1,800 workers at a warehouse in Mira Loma, Calif. The facility, identified as Walmart warehouse No. 6060, is operated by Wisconsin-based Schneider Logistics, on contract to Walmart. The workers affected have been employed over the past decade by several temporary-staffing agencies on contract to Schneider (Premier Warehousing Ventures, Rogers-Premier Unloading Services, and Impact Logistics), and by Schneider itself, as manual box-handlers and forklift drivers.

Today, Rubin alleged that, based on discovery conducted over the past year in the case, Walmart is responsible for ‘all damages to workers.’  Rubin explained the basis of adding Walmart to the suit by alleging that Walmart controls and monitors all work moving Walmart’s goods in the warehouse. ‘Walmart knows what the workers are doing, and how long it takes to do it,’ said Rubin. ‘Key managers and supervisors employed by Schneider had Walmart emails as well as Schneider emails.’ He said Walmart owns the equipment used, and tracks the movement of goods in detail. He also said Walmart had as many as seven of its own managers on-site at times, and that the retailer audited the warehouse.

The temporary warehouse workers represented in the case typically earn $8/hour, California’s minimum wage, with no paid sick time, health or retirement benefits. One hundred to two hundred of them work at the warehouse at any given time, depending on work-flow. Last year, California’s Labor Commissioner cited temp agencies at the warehouse for more than $1 million in fines for wage-theft violations, including failure to pay overtime and improperly requiring workers to rent uniforms.

Hear from the Walmart warehouse workers themselves and about the conditions they face in this three-part series from the Wealth & Poverty Desk: Part 1, “Workers protest pay, conditions at Walmart warehouses;” Part 2, “Walmart warehouse temps add flexibility — and save money?;” and Part 3, “Warehouse ‘permatemps’ push Walmart accountability.”

California Labor Commissioner Julie Su describes the violations her department found: ‘Extremely long hours worked, without the proper pay. Workers who show up, and then are required to wait before they actually go on the clock. The workers were working there without getting any record of their hours worked, the method of pay, the piece-rate. Presumably they were paid by the piece, although none of that was entirely clear to the workers.’

Su says the legal theory being used in this case, to try to establish legal responsibility and liability up the supply chain from labor subcontractor, to warehouse-operator contractor, to big-box retailer end-user, has been used successfully in pursuing employers in the garment and agriculture industries. ‘California law is quite strong when it comes to recognition of the concept of a ‘joint employer,’’ says Su. ‘Meaning, just because you’re employed directly by one entity, it doesn’t mean you can’t also be employed by another entity, including an entity up the chain.’ 

Walmart spokesperson Dan Fogelman provided the following response to Marketplace:

We disagree with the plaintiffs’ perception, as stated in their filing. Walmart 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.

While we have a set of quality standards that must be met, the third party service providers we utilize are responsible for running their day-to-day business. They manage their people completely independent of us. 

Schneider Logistics said in a prepared statement that the company is not responsible for the people who work for temp agencies that staff the Schneider facility in Mira Loma. 

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