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Walmart-Contracted Warehouse Jobs Saved By Judge

Warehouse Workers Reinstated

Posted: 02/ 3/2012 4:52 pm

Just days ago, it appeared that a hundred low-wage workers at a Walmart-contracted warehouse in California would lose their jobs after publicly accusing their employer of shorting them on pay and forcing them to work in harsh conditions. But after the workers argued that the layoffs amounted to illegal retaliation, a state judge ordered this week that the contractors keep the mostly immigrant workers employed at the warehouse.

The ruling marks a significant legal victory not just for the workers in question, but for warehouse workers in Southern California and other warehousing hubs who are trying to organize for better pay and working conditions.

As HuffPost reported in December, to move their goods cheaply, manufacturers and major retailers like Walmart now subcontract with shipping companies, which, in turn, subcontract with staffing agencies that can provide workers at rock-bottom prices. The line of contracts means low-level workers often toil for minimum wage without benefits, and their temporary status as employees means they can lose their jobs suddenly and without recourse (see infographic below).

But in the California case, the judge has signaled that Walmart's contractor, warehousing company Schneider Logistics, will be considered a "joint employer" along with the staffing company it has subcontracted to supply workers, Premier Warehousing. In other words, a company high in the contracting line is being held accountable for the decision by its smaller subcontractor to let workers go. For that, the warehouse workers and their advocates say the ruling is a big deal.

"It's breaking down the fissured nature of this industry," says Janet Herold, an attorney for the California workers. "It's the first step in showing that these divisions [between contractors] are quickly folding."

In a statement, a spokesperson for Schneider said, "We certainly disagree with the Court's determination that Premier employees are Schneider employees, and we will be appealing the decision of the Court."

The drama at the warehouse in Mira Loma, Calif., began last fall, when investigators with the state labor department raided the facility, ultimately issuing more than $1 million in fines for payroll violations to two companies that move Walmart goods. Workers cooperated with officials in their investigation, and shortly after the raid they filed a class-action lawsuit against Schneider and Premier. Walmart, the largest private-sector company in the world, does not directly employ any of the workers, and the retailer has not been fined by the state or named in the lawsuit, although the warehouse in question moves exclusively Walmart goods.

In their lawsuit, the workers allege that they've been paid on a "piece rate" schedule that works out to less than the minimum wage; that they've been forced to work off the clock and haven't been paid for overtime; that they've been required to work in an environment where the temperature climbs above 90 degrees; and that they've been threatened with termination when they complain about pay or conditions. Many of the workers at the warehouse are immigrants from Mexico.

Shortly after the suit was filed, the roughly 100 workers employed by Premier at the warehouse were informed that their jobs would be over on Feb. 24, when a contract between Premier and Schneider came to an end. The workers argue that the layoffs were retaliation for their lawsuit and their cooperation in the state investigation. Herold, the lawyer, maintains that the workers were gathered into meetings and threatened by superiors days after the suit was filed.

In siding with the workers, the judge's ruling means Premier will have to keep the workers employed at the Schneider facility as the case proceeds.

"The decision the court made helped us a lot. We were thinking we'd get laid off Feb. 24," says Daniel Lopez, a worker at the warehouse and a member of Warehouse Workers United, a union-backed labor group that's leading the organizing effort in Southern California. "We have more confidence that when we spoke up for our rights it changed something."

As the California case unfolds, a similar legal battle at another Schneider-run warehouse has been playing out in Elwood, Ill., a major warehousing hub like the Inland Empire. In Illinois, sixty workers at that Walmart-contracted facility say they were similarly fired after filing a lawsuit alleging violations of labor standards. The workers claimed they weren't paid the minimum wage as they moved Walmart goods, sometimes earning as little as $4.60 per hour. The Illinois workers say they were informed on Dec. 31 that they would no longer have jobs.

On Tuesday, the Illinois workers filed another lawsuit against Schneider and a staffing agency called Eclipse Advantage, claiming that the firings were retaliation for the original lawsuit. The workers also say the mass firings violate a state law that requires workers be given 60 days advance notice before they're let go.

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