This Lawsuit Threatens To End Walmart’s Exploitative Ways

Lina Khan | Quartz | February 7, 2014

Last week President Obama urged businesses to “give America a raise.” But even if the minimum wage were raised, it wouldn’t necessarily help a huge class of low-wage employees. That’s because firms like Walmart don’t directly employ the workers hauling or selling their goods. Outsourcing allows these retailers to boast high wages for their own employees, while ignoring the labor violations and meager pay occurring lower down in their supply chains. A higher minimum wage won’t address this problem.

What could? A little-known lawsuit in California.

In 2012, Everardo Carrillo and a group of other warehouse workers who loaded goods for Walmart sued the company, claiming they were paid less than minimum wage, denied overtime pay, and routinely compensated for fewer hours than they worked. The workers haven’t named a fixed amount but are seeking millions of dollars in claims extending back to 2001. True to Walmart’s business model, the workers weren’t direct employees of the company. They were employed by two temporary staffing agencies, which in turn were hired by Schneider, a logistics company retained by Walmart to manage its warehouses in Mira Loma, part of southern California’s Inland Empire, which receives goods from the country’s two largest ports. Still, the workers claim the labor violations they experienced were a direct result of policies set by Walmart, and that the company—along with Schneider—should be held accountable as a “joint employer.”