The Other Side of Walmart

By Assemblymember Roger Hernandez
February 14, 2013 • 477 views

Recently, U.S. District Court Judge Christina Snyder from the Central District Court of California added Walmart as a defendant in a multi-class action lawsuit (Everardo Carrillo, et al. v. Schneider Logistics, Inc. et al., 2012 WL 4791614 (C.D. Cal.)) that has captured the attention of business and labor communities throughout the nation. The importance of the lawsuit is a result of unlawful condition practices instituted against warehouse workers by Schneider Logistics based in Mira Loma, CA. Schneider Logistics serves as a Contract Supplier for the giant retailer Walmart.

Schneider Logistics exclusively deals with Walmart by negotiating with third-party contractors which supply the majority of their merchandise to the stores. In 2011, Schneider Logistics was penalized with over $1 million in fines by the California Department of Industrial Relations, which included a fine of $499,000 for “failure to provide itemized wage statements to employees.” The contractor was also issued a Notice to Discontinue labor law practices for not maintaining time records. Another contractor for Walmart, Chino-based Quettico, LLC., was issued citations totaling $220,000 in penalties on January 28 of this year and have been ordered to pay over $1.1 million in back wages and unpaid overtime to approximately 865 warehouse workers. Our state takes pride in being at the forefront of workers’ rights and protections, therefore we cannot allow such practices by Walmart through exclusive third party contracts to degrade what numerous groups have fought diligently to preserve as basic workers’ rights.

Walmart faces serious consequences if found to be negligent through wage gouging, failing to pay proper wages and overtime. This case is unprecedented as it poses immediate concerns to other big retailers who find themselves in similar situations. Clearly, Walmart alleges that it cannot control the actions of its contractors, yet operates as a corporation that takes pride in controlling every aspect of their business model. On their website Walmart has a policy mandating Standards for Suppliers which states, “suppliers must compensate all workers with wages, overtime premiums, and benefits that meet or exceed legal standards or collective agreements, whichever are higher.” Walmart has failed warehouse workers by not meeting their own standards as a result of their practices.

A corporation of Walmart’s magnitude clearly asserts influence with anyone it does business with. Through legal loopholes Walmart is able to contract with third-party businesses without becoming a direct link in the unlawful practices which results in the ongoing perpetual exploitation of workers.

Mega Corporations, just like every day citizens, should set the model of treating their employees at the highest standards. After all, Walmart and its shareholders owe the employees for the hefty annual dividend returns and rising stock share. According to CNN Money, Walmart profits reached a substantial $15.7 billion in 2011.

It is time for Wal-Mart to face the consequences for its actions and be held accountable for its illicit practices against its workers and contracted warehouse workers. As Chair of the Assembly Committee on Labor and Employment, protecting the rights of all Californians who are mistreated in the workplace is a top priority. This is why we must continue to hold large corporations such as Walmart accountable for their violations of labor laws; warehouse workers have done nothing wrong, except provide their services to an employer who continues to exploit them in order to see large quarterly profits.

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