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.).