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Workers At Walmart-Contracted Warehouse Claim Wage Theft

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Workers at a Walmart distribution center say they got the short shrift | Getty Images

The Supreme Court recently heard oral arguments in Dukes v. Wal-Mart, the largest class-action civil-rights lawsuit in American history, and will soon decide whether the sex-discrimination case -- which could affect 1.6 million women -- can move forward.

Less attention has been paid to a much smaller class-action lawsuit, recently filed in Chicago, that involves Walmart’s business -- perhaps because it involves far fewer workers, and because the retail behemoth isn’t actually named in the suit.

A group of eight workers has accused Wisconsin-based Schneider Logistics, a Walmart contractor, and Reliable Staffing, an Illinois-based temp agency, of violating state and federal labor laws at the Elwood, Ill., warehouse where the workers load and unload trucks and containers carrying goods bound for Walmart stores in the Midwest.

Schneider is contracted to run what is effectively a Walmart distribution center. The warehouse inked its contract with Walmart back in 2006.

Reliable and other staffing agencies supply the workforce for Schneider and other warehouses like it in the Chicago area, and much of the staffing comes on a temporary rather than direct-hire basis. The suit could involve hundreds of warehouse employees if it is certified as class-action.

As In These Times first reported, the workers claim their employer reneged on the promise of a $10 hourly rate for their work, a “piece rate” for each of the items they schlepped and bonuses for “team lifts” on especially heavy goods. Robert Hines, who’s been working on and off in Chicagoland warehouses on a temp basis for years, said he wasn’t compensated for what was often grueling work.

“I noticed after a couple of weeks that my checks didn’t match my hours,” said Hines, who claims he sometimes worked more than 50 hours per week and was shortchanged on overtime, too. “People are breaking their backs, trying to feed their families and be right.”

Hines and other workers marched on the warehouse earlier this year, hoping to resolve the issue short of a lawsuit, but they were encouraged to go to court by a local advocacy group, Warehouse Workers for Justice.

Abraham Mwaura, one of the group’s organizers, said “perma-temp” work, in which workers retain temp status in spite of working for the same company for months or even years, has become a common form of employment in Chicagoland’s sprawling warehouse network. It’s particularly prevalent in Will County, where Mwaura’s group estimates 30,000 warehouse workers are employed.

Warehouse worker complaints aren’t exactly uncommon. In 2009, a separate group of employees at the same distribution center filed a class-action suit accusing a different staffing agency of wage theft.

Greg Rossiter, a Walmart spokesman, said the company wouldn’t comment on litigation that it isn’t directly involved in, pointing out that “the facility isn’t operated by Walmart nor are the people who work in it employed by Walmart.” But he did say the retailer keeps an auditor at the facility to monitor the work environment and productivity level.

In a statement, a spokeswoman for Schneider said, “Schneider does not employ any of the workers at issue. The plaintiffs in the litigation were employed by a third party vendor to another vendor to Schneider. Schneider has at all times complied with Illinois and federal law and declines further comment on the pending matter as a courtesy to the involved parties.”

A woman who answered the phone at Reliable Staffing said the company’s president was traveling and could not be reached.

“Many [big retailers] are using this model,” said Mwaura. “They hire a third party to run the warehouse, and a third party hires the temp agencies. That’s become the way to compete in this industry. They’re just moving the cost to someone else. Ultimately, the people who pay for it are the workers.”

Surveys done by Mwaura’s group have determined that the vast majority of warehouse workers in the area are African-Americans and Latino immigrants, and more than half of them have temp status, which often puts health insurance and other benefits out of reach.

The perma-temp system “gets people stuck on the job ladder,” Mwaura said. “There’s no job mobility. They’re not going to make you a supervisor. You may not even have a job tomorrow.”

A warehouse like the one in Elwood might have a dozen or more staffing agencies operating within it, said Chris Williams, the attorney whose Chicago legal clinic filed the class-action suit. Williams said the pay scheme is often too complicated for workers to understand. He believes the workers may have been shorted as much as 20 percent of the pay due them, but he said some math still has to be done.

“Part of it is they’re trying to incentivize productivity -- the more you work, the more you get paid,” Williams said. “Sometimes [workers] will go into a truck and unload everything just to find a few boxes, like a needle in a haystack,” only to be paid for just the items they were sent in for. “They get the short end of the stick.”

Hines, who started working in the warehouse last August, described the items he unloaded from containers as “anything and everything you’d find at Walmart,” save for groceries. He said workers were often told they were moving too slow, and it was common for workers to be put off the clock while they waited at the warehouse for a new container to come in.

Hines quit after working in the Schneider warehouse Thanksgiving week. He said his plan is to start his own landscaping business, which will let him set his own hours and spend more time with his kids.

“If I work for myself, I figure I won’t sell myself short,” he said.

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