Chain of Greed

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(i.e., the denial of wages they hadearned), and more than one in tenhad been injured while working in adistribution facility. 68A study of warehouse work in theInland Empire found that the concentrationof logistics facilities therehad nurtured a fast-growing industryof warehouse temporary agencies. In1990 there were 119 such agencies inthe Inland Empire, but by 2008, thenumber had grown to 424 establishments.As a result, the region has ahigher concentration of temporaryemployment than any other in thestate. 68Holding DownCosts, EnablingAbuse:Outsourcing’sDownwardPressureIn some cases, subcontracted logisticsworkers themselves are able to see adirect causal relationship betweenWalmart’s ceaseless demands forlower prices and their working conditions.Workers at the Mira Loma SchneiderLogistics distribution center have nodifficulty establishing a direct connectionto Walmart. As recent courtdocuments filed by plaintiffs specify,the only goods loaded and unloadedat the facility are those destined forWalmart stores. Walmart securityguards maintain a constant presenceat the warehouses. Walmart staff frequentlycommunicate directly withRogers-Premier and Impact Logisticsemployees, providing instructionson staffing levels, productivity,and worker misconduct. Contractsbetween Schneider and its subcontractors,Rogers-Premier and ImpactLogistics require that workers receiveorientation materials that complywith Walmart policies. Walmart haseven created a multiple choice testfor Rogers-Premier and Impact Logisticsto administer in order to ensurethat warehouse workers are properlytrained. And when worker productivityhas declined at the warehouse operations,Walmart has cut compensationto Schneider. 70Workers at Schneider Logistics havereported extensive workplace abusesresulting from cost-cutting. In October2011, warehouse workers at theMira Loma Schneider Logistics distributioncenter filed suit in federal courtto protest their working conditions. 71Workers sued Schneider Logistics, aswell as Rogers-Premier and ImpactLogistics, two temporary staffingagencies Schneider subcontracts withto supply workers, alleging violationsof basic labor protections.Court documents from the case, aswell as recent investigations by theCalifornia Labor Commissioner andthe California Division of OccupationalSafety and Health (Cal/OSHA),reveal the breadth of labor abuses takingplace in these warehouses.Illegal Pay System. In February2010, Schneider Logistics and temporarystaffing agencies at the MiraLoma Logistics distribution centerinstituted a new “piece rate” system.Under this “piece rate” system, workersreceived pay only for shipping containersor trailers that were completelyfilled or unloaded by the end of ashift, resulting in rampant minimumwage and overtime violations. Workersreceived no pay at all for otherwork performed, including sweepingfloors, stacking and breaking down12pallets, unloading partial or overloadedtruck containers, filling orders,attending meetings, or waiting for anassignment at the warehouse, in violationof California law.As court documents note, the subcontractingsystem made it virtuallyimpossible for temporary staffingcompanies like Rogers-Premierand Impact Logistics to pay workerslegally-required wages for work performed.Wage statements revealedthat Schneider paid temporary staffingcompanies approximately $150for every fully loaded trailer. Afterdeducting 30% of the fee for its ownuse, only 70%, or about $105 was leftto pay workers their wages. Loadinga trailer requires at least two workersfor at least 4.5 to 7 hours per truck,leaving little money left over to payfor other work performed or for legallymandated overtime pay.Lengthy Hours, No Overtime Pay.Since at least February 2010, whenSchneider Logistics implemented thepiece rate system, warehouse workershave endured lengthy hours forweeks upon end without overtimepay. Workers reported that they oftenworked shifts up to 12 hours duringa day. One individual reported havingworked for 28 days, each with morethan eight hours a day, and sometimesmore than 16 hours per day, without asingle day off.Illegal and Falsified Records. BeforeWalmart contractors institutedthe “piece rate” system, workers hadused a punch clock to log into workand had been paid on an hourly rate.However, after temporary staffingagencies Rogers-Premier and ImpactLogistics instituted the new piece ratepay system, warehouse workers wererequired to sign in on a blank form,and instructed not to enter other information,such as start or end time,or any break time on the form. AsEverardo Carillo, a warehouse work-
er, noted, “We were directed simplyto sign our names each morning onblank forms maintained by the supervisors.We did not write in the timewe arrived at work or the time we finished.The Rogers Premier supervisorsor the lead workers would after writedown the fake start and end times.”Lead worker Evaristo Morales reported,“I was told to write down fewerhours than any of us actually worked,and was never told to record my actualwork hours or to accurately record thework hours of any of the warehouseworkers.”In late 2011, the California LaborCommissioner issued citations totalingmore than $600,000 to Premierand almost $500,000 to Impact Logisticsfor wage and hour violations discoveredduring an inspection of theSchneider Logistics plant. Violationsincluded employers’ failure to furnishaccurate statements with paychecksthat include detail on total hoursworked, hourly pay, piece rates if suchpay is utilized, deductions, and otherwage information. 72Hazardous Workplace Conditions.Warehouse work poses several dangersto workers’ health and safety.In 2012, excessive heat, pressure forspeed, unstable storage stacking, andunguarded machinery led Cal/OSHAto issue over $250,000 in citationsfor safety hazards to warehouses, includingNFI, another Walmart contractor.73 The complexity of work performedin warehouses, fast-movingvehicles, and the pace of productionhas led Cal/OSHA to identify thewarehouse industry as one of thestate’s high hazard industries. 74 A recentacademic survey of warehouseworkers in the Inland Empire revealedthat at least 63 percent had been injuredon the job, 83 percent sufferedfrom a job-related illness, and 84 percenthad witnessed an injury to a coworker.75Climate of Fear and Retaliation.Managers retaliated against workerswho asked for more informationabout unpaid wages or about the piecerate system by denying them work, issuingdisciplinary warnings or threats,sending complaining workers home,or threatening to terminate workers.Armando Esquivel, a warehouse worker,remembered asking his supervisorabout an incorrect paycheck. “Healways promised to look into it butmy pay was never corrected, not evenonce. When I would repeat my complaints,he would tell me: ‘I have a pileof job applications on my desk morethan a foot high, if you don’t like thisjob, you can go home.’”After workers filed a lawsuit allegingviolations of labor protections,managers called a mandatory meetingin the warehouse. Two employeespresent at that meeting recalled thattheir manager crumpled up flyers discussingthe lawsuit and threatenedto “destroy you and throw you in thetrash if you get involved” in the lawsuit.76Workers alleging unlawful labor practicesat the Mira Loma warehouse facilitywere vindicated when a federaldistrict court ordered that temporarystaffing agencies Rogers-Premier andPercentage of warehouse workers injuredon the job:Percentage of warehouse workers who havesuffered from a job-related illness:Percentage of warehouse workers who havewitnessed an injury to a coworker:Impact, and the workers’ joint employer Schneider, must immediatelybegin to provide the workers withcorrect wage statements, disclose payrates for each truck container loadedor unloaded, and abide by federal andstate recordkeeping requirements. 77Instead of bringing their illegal practicesinto compliance with the law,Rogers-Premier and Schneider respondedto the workers’ lawsuit andcooperation with state labor officialsby announcing that their jointly employedworkers would all be terminatedwithin three months. The workersreturned to court, and celebrated amajor victory when the federal judgeprohibited the companies from terminatingthose workers. 78The Inland Empire warehouse workershave also been organizing arounda broad banner calling for fair wagesand benefits, safe working conditions,and responsible contractingpractices by Walmart. The campaign,formed as Warehouse Workers United(www.warehouseworkersunited.org),which is affiliated with the Changeto Win Strategic Organizing Centercomprised of four international unions,has been organizing in SouthernCalifornia, in the state’s capitol,and around the U.S. to champion thecause of these struggling workers.63%83%84%Deogracia Cornelio et al., Shattered Dreams and Broken Bodies: A Brief Review of the Inland Empire Warehouse Industry (LosAngeles: Warehouse Workers Accountability Commission, 2011).13
Page 1 and 2: Chain of GreedHow Walmart’s Domes
Page 3 and 4: ContentsI. Executive Summary 02II.
Page 5 and 6: Walmart squeezes supply-chain contr
Page 7 and 8: ties. We do know that contracting o
Page 9 and 10: safety and violating wage and hourl
Page 11 and 12: 2018 Business ProposalJesus Sauceda
Page 13: The WalmartWarehouseContractorsSout
Page 17 and 18: 2018 Business ProposalIn 1990, offi
Page 19 and 20: When Marta Medina moved to Southern
Page 21 and 22: esponsible for wage violations are
Page 24: Endnotes1See, for example, Micha Pe
Page 27 and 28: 51David Blanchard, “Swinging for
Page 29 and 30: National Employment Law Project, 20

Chain of Greed

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