Store associates and their supporters picket outside Walmart on October 4, 2012.
An update, with comment from the warehouse workers' attorney, appears below.
In a tentative ruling released minutes ago, District Court Judge Christina Snyder signaled she intends to grant a request to add Walmart as a named defendant in a federal class action lawsuit over alleged wage theft at its California distribution centers. The ruling is a setback for the retail giant, which has maintained that it is not legally responsible for the alleged abuses by its contractors and subcontractors. Judge Snyder will hear arguments from attorneys for both sides today, and could issue a final ruling within hours.
Walmart did not respond to a Saturday request for comment on the case, and did not immediately respond to an inquiry regarding the decision. A spokesperson for Warehouse Workers United, the union-affiliated group supporting the plantiffs, said that attorneys were not immediately available to comment given the hearing underway. The tentative ruling follows strikes by subcontracted warehouse workers in California and Illinois, and increased scrutiny regarding Walmart contracting in the United States and abroad.
As The Nation has reported, the lawsuit was brought by warehouse workers moving Walmart goods in Southern California’s Inland Empire. The workers were employed by staffing companies, which were subcontracted by the logistics company Schneider, which was hired by Walmart. In 2011, after workers filed a federal lawsuit and instigated a state investigation of alleged wage and hour violations, subcontractor Rogers-Premier announced a mass layoff of one warehouse’s entire workforce. Those terminations were blocked last February, by a rare federal district court restraining order.
The same court allowed Schneider—rather than just its subcontractors—to be named as a defendant in the class action suit over the alleged wage theft, Everardo Carrillo, et al. v. Schneider Logistics, Inc., et al. On November 30, the workers’ attorneys petitioned the court to add Walmart as a defendant as well, based on evidence garnered during the discovery process. They said that the workers exclusively moved Walmart products, and that Walmart instructed Schneider when to refill ink in its printers, and how many workers to assign to unload a particular truck.
In an e-mail to The Nation that day, Walmart spokesperson Dan Fogleman said, “We disagree with the plaintiffs’ perception as stated in their filing. Walmart is Schneider’s customer. We have a set of business needs that we pay them to meet just like any company might hire an accounting firm to do taxes or an advertising firm to help launch a new product.” Plaintiff attorney Michael Rubin countered that Walmart owns all equipment in the buildings, dictates that they be run in exactly the same manner as Walmart’s non-subcontracted warehouses, and keeps a full-time Walmart manager on site. “This is not a typical arms-length customer-accountant or customer-tax lawyer relationship,” said Rubin.
This morning’s tentative ruling comes ten days after the US Ninth Circuit Court of Appeals rejected an appeal from Schneider, affirming two injunctions Judge Snyder issued against the contractor. The same day, The Wall Street Journal broke the news that Walmart plans to implement an auditing system for labor conditions in its subcontracted warehouses similar to the one in place for its suppliers abroad. That news was met with skepticism from WWU and the nonprofit Workers Rights Consortium, whose leaders charge that such auditing failed to prevent a deadly factory fire in Bangladesh.
Update (4 PM EST Monday): Today’s hearing lasted about half an hour, according to plaintiff attorney Michael Rubin. He said that while Walmart argued once again that the warehouse workers should not be able to add the retail giant as a defendant, “the judge made quite clear in her response that Walmart had established neither delay nor prejudice.” He predicted that Judge Snyder would issue a final ruling confirming this morning’s tentative ruling sometime in the next 48 hours.
If that happens, the plaintiffs will file an amended complaint naming Walmart as a defendant, and the company will have 30 days to respond. Rubin noted that Walmart could file a motion to dismiss on the grounds that it is not a “joint employer” of the workers, but said that based on today’s tentative ruling, and last month’s appeals court decision rejecting a similar motion from Schneider, “we have very little concern that Walmart could succeed.”
“This was great news from the plaintiffs’ perspective,” Rubin told The Nation. “We expect Walmart to share fully in the responsibility for the legal violations committed against the workers, and this will help us ensure that the case is brought to an appropriate conclusion, in which the workers are compensated for the years of wage theft they’ve been subjected to.”
For more on efforts to hold Walmart accountable for the behavior of its suppliers, check out Josh Eidelson's coverage from last week.