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Wal-Mart Contractor May Face Class Action Challenging Warehouse Practices
There are important legal challenges underway seeking to hold Wal-Mart accountable to legal wage and hour protections.
July 24, 2011 /Law Enforcement PR News/ -- There are important legal challenges underway that seek to hold Wal-Mart accountable to the wage and hour protections contained in state and federal employment law. It's true that, in Dukes v. Wal-Mart, the Supreme Court recently declined to allow a class of potentially up to 1.5 million to sue together in a high-profile sex discrimination case. But Wal-Mart is not off the hook entirely. Off-the-clock work and the use of "permanent temps" to avoid paying benefits are still among the practices subject to challenges in class-action litigation.
Legal Action by Warehouse Workers
One such challenge is underway at an Illinois warehouse that distributes Wal-Mart products to Wal-Mart stores in the Midwest. A group of workers -- currently numbering eight -- has filed suit against the Wal-Mart contractor that operates the warehouse and a temp agency hired by the contractor. The suit alleges that workers who load and unload trucks at the warehouse are not receiving the pay they were promised.
If it is certified as a class action, the suit could potentially include hundreds of warehouse employees in the Chicagoland area. The litigation could also have implications for how Wal-Mart and other big retailers distribute their products by using third parties to run warehouses that are in turn staffed by temp agencies.
If you are concerned about wage and hour law violations in these warehouses, talk with an experienced employment law attorney. Just because the company calls you a temp doesn't mean you lack protections under labor and employment law.
Wage and Hour Protections
The warehouse at issue is located in Elwood, Illinois. The eight workers are suing a Wal-Mart contractor called Schneider Logistics, which operates the warehouse. Schneider in turn contracts with a temp agency, Reliable Staffing, as well as other temp agencies, to staff the warehouse.
The workers bringing the suit assert that they were promised a base wage of $10 per hour, plus a "piece rate" for items they transported and bonus payments for heavy lifting. Instead, workers say they were subjected to frequent off-the-clock work. Supervisors would often tell workers they were too slow, and take them off the clock until the next truck came in to be unloaded. Employees also expressed concern about not receiving overtime pay.
This is precisely the kind of behavior by employers that the federal Fair Labor Standards Act (FLSA) is intended to address.
"Permatemp" Status and the FLSA
For the protections of the FLSA to apply, there must be an employment relationship between an employer and an employee. That is what the law says.
What happens, however, when many warehouse workers are classified as temporary workers, even if they have worked for the same company for months or even years?
The term "permanent temp" sounds like an oxymoron -- and it is. But is has become a common phenomenon in the warehouse industry, in Chicagoland and elsewhere around the country.
Abraham Mwaura, a labor advocate in the Chicago area, points out that many large retailers are using this distribution model to cut down on costs. Surveys done by Mwaura's organization, Warehouse Workers for Justice, show that more than half of the warehouse workers in the Chicago area are temps. In practice, this means that they often do not receive health insurance and other benefits that permanent employees receive.
What Class-Action Litigation Can Do
Chris Williams is the attorney whose legal clinic brought the suit challenging the employment practices at the Elwood, Illinois, warehouse. One of his main concerns is how companies constantly complicate the structure, making it more difficult for workers to understand their rights. For example, a warehouse like the one in Elwood, serving a major retailer like Wal-Mart, could conceivably have ten or more temp agencies providing staff.
In addition, the use of work incentives is often done in unfair and confusing ways. Employers, Williams points out, are trying to "incentivize productivity." In theory, there is nothing wrong with that. Employers who are more productive could receive supplements to their base pay, based on a "piece rate" for each additional item they move. In practice, however, problems with piece rate proliferate.
It's one thing to say the more you work, the more you get paid. It's quite different when workers are sent into a truck just to find and unload a few boxes, but doing so requires unloading the whole truck. When that happens, it's not fair for employers to pay only for a few boxes.
Whether a worker is a temp or not, it is against the law to short him or her on pay.
Wal-Mart's Role
Although Wal-Mart is not being sued directly in the Elwood warehouse litigation, America's biggest retailer has a lot at stake. The work at issue involves the distribution of Wal-Mart products, and Wal-Mart has an auditor in place at the warehouse to monitor productivity. If the Elwood warehouse plaintiffs are certified as a class, the impact on how Wal-Mart and other big retailers handle their distribution business could be considerable.
Article provided by Marlin & Saltzman, LLP
Visit us at www.marlinandsaltzman.com
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