Press Releases

Lawsuit Alleges that Walmart Played a Central Role in Decade-Long Scheme to Defraud Workers

For Immediate Release: Thursday, January 10, 2013
Contact: Elizabeth Brennan at (213) 999-2164

LOS ANGELES –Judge Christina Snyder ruled Thursday in federal court that Walmart can be added as a defendant to a class action lawsuit alleging massive wage and hour violations at a Walmart-contracted warehouse in Southern California. Read the order here.

Rejecting Walmart’s complaints of undue delay and prejudice, the judge noted said that she was “not persuaded” by Walmart’s arguments and ruled that the complaint, known as Carrillo v. Schneider Logistics, Inc., could be amended to include Walmart.

The ruling follows a separate ruling Dec. 28 by the Ninth Circuit Court of Appeals that affirmed several injunctions issued by Judge Snyder, including a preliminary injunction that blocked the termination of dozens of subcontracted warehouse workers. The three-judge appellate panel found that Schneider’s appeal was without merit and that the workers were “likely to succeed” in their claim that Schneider and its labor service contractors were their “joint employers.” Schneider is directly contracted by Walmart to operate the warehouse.

On Nov. 30 attorneys representing as many as 1,800 warehouse workers who move goods for Walmart in Southern California’s Inland Empire, filed a motion in federal court to add Walmart as a defendant. Plaintiff warehouse workers seek millions of dollars in reimbursement and penalties from Walmart and the contractors it hired to operate Walmart’s warehouse facilities in Riverside County, California.

After months of discovery, including key depositions of Walmart managers with detailed knowledge of the warehouse operations, attorneys made the decision to add Walmart as a defendant.

“We are confident, after questioning key Walmart witnesses and reviewing thousands of Walmart documents, that the jury will ultimately find that Walmart shares full responsibility for the many workplace violations suffered by the workers in the Mira Loma warehouses,” said plaintiffs’ attorney, Theresa M. Traber.

“We know that Walmart is in control and now we will know the extent of their involvement to defraud workers,” said David Acosta, a warehouse worker and plaintiff in the lawsuit.

In October 2011, workers who were jointly employed at the Walmart warehouses by Schneider Logistics, Inc. and two labor services subcontractors, Premier Warehousing Ventures and Impact Logistics, filed the Carrillo class action to recover back pay, penalties, and damages. Their lawsuit alleges that the workers who load and unload Walmart’s truck containers, many of whom have worked at these warehouses for years, were routinely forced to work off the clock, denied legally required overtime pay, and retaliated against when they tried to assert their legal rights, or even asked how their paychecks had been calculated.

The California Department of Labor Standards Enforcement raided the Walmart-contracted warehouses in October 2011 and issued citations for civil fines totaling more than $1 million for inadequate recordkeeping alone.

About 85,000 workers labor in warehouses in the Inland Empire, San Bernardino and Riverside counties, loading and unloading goods that enter through our nation’s busiest ports in Long Beach and Los Angeles en route to major retailers like Walmart. The majority of workers are directly hired through labor subcontractors, paid low wages, receive no benefits, and have no job security.

Plaintiff workers are represented by Traber & Voorhees of Pasadena (626) 585-9611, Altshuler Berzon LLP of San Francisco (415) 421-7151, Bet Tzedek Legal Services of Los Angeles (323) 939-0506, and the Law Offices of Sandra C. Munoz of Los Angeles (323) 720-9400. The case name is Everardo Carrillo v. Schneider Logistics, Inc., No. CV 11-8557 CAS (DTBx) (C.D. Cal.).

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For Immediate Release: Thursday, January 10, 2013
Contact: Elizabeth Brennan at 213-999-2164

LOS ANGELES – In an open letter to Walmart’s Board of Directors and other top leadership, warehouse workers raised serious concerns about a new plan to monitor domestic warehousing facilities. Read the open letter to Walmart leadership.

Walmart announced plans for a new program modeled after its flawed global monitoring program without any detail in The Wall Street Journal Dec. 28. A Walmart spokesman said only that they take the issue “seriously.”

“Replicating the failed monitoring system currently in use overseas is not taking the problem seriously. Failing to consult with workers directly impacted by these decisions is not taking the problem seriously,” stated the letter from Warehouse Workers United, an advocacy group committed to improving warehousing jobs in Southern California.

In November, 112 workers died in a Bangladeshi garment factory that was producing goods for Walmart and since then there have been numerous reports detailing the failed program.

“The failed global monitoring system cannot be a model for fixing supply chain problems in the U.S.,” said Guadalupe Palma, a campaign director with Warehouse Workers United. “We have documented serious violations in many of Walmart’s contracted warehouses including unsafe working conditions, stolen wages, extreme temperatures, injury, inadequate access to water and retaliation against workers who speak up for their rights.”

In the past two years, workers affiliated with Warehouse Workers United have filed numerous complaints with multiple government agencies. As a result, at least six Walmart contractors in California have been fined for more than $1.3 million. Workers have also filed complaints with Walmart directly and gone on strike to protest the problems and the retaliation suffered when workers try to improve their workplaces.

“Walmart’s domestic warehouse supply chain is in desperate need for reform to ensure workers are treated with dignity and respect, in accordance with the law, and in accordance with Walmart’s own stated ‘Standards for Suppliers,’” the letter to about 20 Walmart executives read. “In reality, none of those standards are upheld today…A public relations campaign by Walmart and a toothless monitoring system will not make the problems disappear.”

Workers are asking Walmart’s leadership to revisit the issue and include stakeholders in the reform process.

Workers and their supporters are calling on Walmart to take responsibility for working conditions in the warehouses it relies on. As the largest retailer in the world, Walmart effectively dictates the standards of operation in the logistics and distribution industry. This impacts the lives of 85,000 warehouse workers in Southern California who every day unload merchandise from shipping containers that enter through the ports of Los Angeles and Long Beach and load it onto trucks destined for retail stores like Walmart.

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Federal Court Motion Casts Walmart in Central Role in Decade-Long Scheme to Defraud Workers

Contact: Elizabeth Brennan at (213) 999-2164
or on Friday, Kevin Kish, Michael Rubin or Sandra Muñoz at (323) 939-0506

LOS ANGELES – Attorneys representing as many as 1,800 warehouse workers who move goods for Walmart in Southern California’s Inland Empire, took steps Friday to add Walmart as a defendant in the federal class action known as Carrillo v. Schneider Logistics, Inc.

Plaintiff warehouse workers seek millions of dollars in reimbursement and penalties from Walmart and the contractors it hired to operate Walmart’s warehouse facilities in Riverside County, California.

“Walmart employs a network of contractors and subcontractors who have habitually broken the law to keep their labor costs low and Walmart’s profit margins high,” said Michael Rubin, attorney for the plaintiffs. “We believe Walmart knows exactly what is happening and is ultimately responsible for stealing millions of dollars from the low-wage warehouse workers who move Walmart merchandise.”

After months of discovery, including key depositions of Walmart managers with detailed knowledge of the warehouse operations, attorneys made the decision to add Walmart as a defendant.

“These egregious violations of fundamental workplace rights are ultimately Walmart’s responsibility,” said plaintiffs’ co-counsel Theresa Traber. “Walmart controls the operation of these warehouses from top to bottom, and keeps a watchful eye on everything that happens there, yet fails to show the workers the respect and dignity they deserve.”

“The entire time I have been working there, we have known that we are really working for Walmart,” said David Acosta, a warehouse worker and plaintiff in the lawsuit. “The trucks that come in and out and the boxes we load and unload say Walmart, but the company has pretended it has nothing to do with what happened to us.”

The news comes as more details come to light about the horrific fire that swept through a Bangladesh clothing factory, killing more than 100 workers. Workers at the factory produced clothes for Walmart and other major retailers. Earlier in the year, workers at Walmart supplier C.J.’s Seafood revealed that they had been forced to work up to 24-hour shifts with no overtime pay and were sometimes locked into the plant to prevent them from taking breaks.

“Walmart has several major problems in its supply chain that should ring some alarm bells at corporate headquarters,” said University of Southern California Professor Juan De Lara, an expert on supply chain logistics. “The company’s relentless pursuit of low prices sometimes leaves workers vulnerable to suppliers who feel pressured into cutting costs and jeopardizing safety in order to meet Walmart’s rigid production and price standards. The recent fire in Bangladesh – where 112 garment workers died – is a tragic example of what can happen when Walmart outsources production to suppliers who don’t abide by the law. Here at home, warehouse workers and seafood employees have filed complaints against Walmart suppliers for illegal wage payments and harsh working conditions. It looks like warehouse workers are asking Walmart to make a choice between turning a blind eye to what happens along its supply chain or to demonstrate some leadership by acting like a socially responsible company.”

In October 2011, workers who were jointly employed at the Walmart warehouses by Schneider Logistics, Inc. and two temporary staffing agencies, Premier Warehousing Ventures and Impact Logistics, filed the Carrillo class action to recover back pay, penalties, and damages. Their lawsuit alleges that the workers who load and unload Walmart’s truck containers, many of whom have worked at these warehouses for years, were routinely forced to work off the clock, denied legally required overtime pay, and retaliated against when they tried to assert their legal rights, or even asked how their paychecks had been calculated.

“As a matter of economic reality, Walmart controls these workers’ employment. The more facts we learned and documents we reviewed, the clearer it became that Walmart is responsible for the conditions in which they work,” said Kevin Kish, plaintiffs’ co-counsel.

The California Department of Labor Standards Enforcement raided the Walmart-contracted warehouses in October 2011 and issued citations for civil fines totaling more than $1 million for inadequate recordkeeping alone.

About 85,000 workers labor in warehouses in the Inland Empire, San Bernardino and Riverside counties, loading and unloading goods that enter through our nation’s busiest ports in Long Beach and Los Angeles en route to major retailers like Walmart. The majority of workers are hired through temp agencies, paid low wages, receive no benefits, and have no job security.

Plaintiff workers are represented by Traber & Voorhees of Pasadena (626) 585-9611, Altshuler Berzon LLP of San Francisco (415) 421-7151, Bet Tzedek Legal Services of Los Angeles (323) 939-0506, and the Law Offices of Sandra C. Munoz of Los Angeles (323) 720-9400. The case name is Everardo Carrillo v. Schneider Logistics, Inc., No. CV 11-8557 CAS (DTBx) (C.D. Cal.).

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New Charges Racking Up Against Walmart Contractors Nationally

RIVERSIDE, Calif. – BLANK community members sat down in the middle of a major thoroughfare in front of the Walmart-contracted warehouse where workers are on strike Thursday.

The supporters were arrested by the Riverside County Sheriff while chanting “Si se puede” or “Yes, we can.”

“If you were all here in support of warehouse workers alone it would be a noble cause, but this isn’t just for warehouse workers. Your efforts benefit all working people,” Rev. Eugene Boutilier told the crowd shortly before he was arrested.

Workers—who do not have a recognized union—went on strike Wednesday, Nov. 14 to call for an end to retaliation and unfair labor practices.

“We are standing up for ourselves to create a safe work environment, but we are continuously punished for it,” said Javier Rodriguez, a warehouse worker. “We decided to strike again because we are tired of being singled out and denied work, demoted and even fired.”

Warehouse workers first went on strike in September to protest unfair labor practices. They then embarked on a 50-mile “WalMarch” from Southern California’s Inland Empire to Downtown Los Angeles to improve safety conditions at the warehouse.

The September actions sparked a chain reaction leading to warehouse worker strikes in Illinois and Walmart store worker strikes in dozens of locations. Working conditions have also started to improve.

“Because workers have spoken out about inhumane working conditions, the warehouse company is now scrambling to rent fans, add water coolers and fix broken equipment,” said Guadalupe Palma, a campaign director with Warehouse Workers United. “It’s no good to acknowledge that workers’ concerns about safety are legitimate while retaliating against the whistleblowers who stood up to bring the concerns to light.”

The striking warehouse workers in California are employed by NFI and a temporary labor agency, Warestaff. One hundred percent of the merchandise that flows through the facility is destined for Walmart stores. As the largest retailer in the world, Walmart dictates the standards of operation in the logistics and distribution industry.

Workers load and unload goods at a warehouse operated by NFI industries in Mira Loma, California. In November, NFI has been frantically installing new ramps, a heavy metal panel that connects shipping containers to the warehouse for loading and unloading, water coolers, fans and fixing other equipment. In September Walmart spokesman Dan Fogelman told news outlets: “Based on our conversation with our providers and visits to many of the facilities, we believe the complaints are either unfounded or, if legitimate, have been addressed.”

“Clearly Walmart’s statement that workers’ claims were false was actually false,” said Guadalupe Palma, a director of Warehouse Workers United, an organization committed to improving warehousing jobs in Southern California’s Inland Empire. “Walmart must intervene to uphold its own stated “Standards for Suppliers” in order to eliminate inhumane and illegal working conditions; workers must be involved in the process to ensure that the Standards are upheld in the future.” The National Labor Relations Board is currently investigating numerous federal charges filed by the warehouse workers.

More than 85,000 workers labor in warehouses in Southern California, unloading merchandise from shipping containers that enter through the ports of Los Angeles and Long Beach and loading it onto trucks destined for retail stores like Walmart.

The Southern California strike comes at the same time as two significant developments with Walmart contractors in Illinois and Pennsylvania.

This week, warehouse workers in Illinois filed additional federal charges against four employers that operate Walmart’s largest distribution center located in Elwood, Illinois. The contractors, Schneider Logistics, Roadlink Workforce Solutions, Select Remedy and Skyward Employment Service, are all charged with violations similar to those in California including illegal threats, intimidation and discipline against workers organizing to improve working conditions.

“We work hard and deserve to be paid fairly, have a safe workplace and be treated with dignity as human beings. If Walmart thinks we will be silenced by this illegal retaliation, they are wrong” said Illinois Walmart warehouse worker Phil Bailey.

Wednesday the National Guestworker Alliance announced an agreement with warehouse operator Exel Logistics and the Department of Labor that will provide new worker protections in Exel’s more than 300 U.S. warehouses.

Exel, which has $4.1 billion in annual revenue, operates warehouses for major U.S. retailers including Wal-Mart and Hershey’s. The DOL agreement came in response to a strike and legal complaints by the NGA over serious labor abuses in a Hershey’s Chocolate packing plant in summer 2011.

“The Department of Labor is forcing Exel to take direct responsibility for tens of thousands of workers currently trapped under layers of subcontracting and hidden behind misclassification schemes,” said Saket Soni. “Companies like Walmart and Exel have to be held responsible for transforming good, permanent jobs into subcontracted, dangerous, subminimum-wage jobs.”