Monday, January 7, 2013

The Next Big Wal-Mart Class Action Wave?

CoinsWage and hour litigation against Wal-Mart is not that unusual, and class actions have been not only brought but won, so maybe my title is a little misleading. Still, the group of workers bringing the class action is new-ish and the case may actually have bigger implications outside of Wal-Mart for other businesses.

Josh Eidelson at the Nation reports that earlier today District Court Judge Christina Snyder issued a "tentative ruling" that she intends to grant a request to add Walmart as a named defendant in a federal class action lawsuit over wage and hour violations, or "wage theft," and at a California distribution center and retaliation for filing a suit about those violations. Judge Snyder is hearing arguments this afternoon, but apparently signaled that unless she hears something pretty compelling, she plans to rule that Wal-Mart is an employer of these employees and can be named as a defendant. 

Unlike in the original Dukes litigation, the class is relatively small, so however this case proceeds, it won't present the same kind of problems the Supreme Court identified in its decision in that case. This class is made up of workers from just three warehouses. The interesting twist here, one that could impact Wal-Mart in a way the Dukes plaintiffs were trying to and one that may have very far reaching implications, involves the way Wal-Mart structures its distribution chain. The relationships are complicated. Wal-Mart subcontracts its distribution and storage. In this area it is to Schneider Logistics. Schneider, in turn, subcontracts the work in the warehouses to various subcontractors. Last fall, the District Court for the Central District of California ruled that Schneider was an employer of these workers, and they were not employed solely by the subcontractors. Now the question is whether Wal-Mart is also an employer.

The allegations about the level of control Wal-Mart exercised over the warehouses and the work are similar to the kinds of allegations that made up the Dukes' plaintiffs argument that everything was centralized with a common de facto policy. Here, though, that argument will likely have much more effect, since the issue is the level of control exercised by Wal-Mart over the day-to-day work of these employees.

Logistics warehouse working conditions and efforts by retail giants to keep costs low by using temporary workers or subcontractors have garnered some attention in recent years. We'll have to watch as the case develops.

h/t Matt Dimick (SUNY)


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