Volume 2, Issue 5 - March 15th, 2014

Finding that ample evidence existed that Walmart exercised control over the working conditions of the workers employed by Walmart’s warehouse subcontractors, a California federal district court held that Walmart may be jointly liable for wage violations committed by those subcontractors.

Walmart had contracted with Schneider Logistics Trans-Loading and Distribution, which operated the warehouses for Walmart and other retailers. SLTD in turn subcontracted merchandise loading and unloading services to outside staffing agencies.

A union front group called Warehouse Workers United enlisted the support of state agencies andsupported worker lawsuits attacking California third-party warehouses used by the giant retailer. They alleged unsafe working conditions and wage law violations they said were mandated by Walmart directives, charges the companies denied.

The workers who performed the loading and unloading services are seeking to recover unpaid wages and are asserting failure to maintain proper records and other related violations by the staffing agencies, SLTD and Walmart.

Walmart asked the court to dismiss the suit on the grounds that it could not be held liable because the company was not the employer of the plaintiffs.

In denying Walmart’s request, the court determined that Walmart exercised sufficient control over the working conditions of the plaintiffs to potentially render Walmart “a joint employer,” and thus be jointly liable for the subcontractors’ alleged wage violations.

Among other things, the court found Walmart was potentially liable because it imposed screening requirements on all employees hired to work at the warehouses; approved overall staffing levels; exercised oversight of hours worked; monitored and enforced productivity standards; influenced pay rates and working schedules; and owned the equipment used at the warehouses.