Walmart Subcontractor To Pay $21M To Settle Warehouse Workers’ Wage Theft Lawsuit

It’s common practice that when an employee does a job, he or she gets paid for that work. That compensation was at the crux of the issue in a lawsuit against Schneider Logistics Inc., one of Walmart’s largest distribution subcontractors, who reached a settlement for the alleged wage theft of 1,800 employees.

Schneider Logistics agreed to pay $21 million to settle federal and state-level wage and hour violations committed between 2001 and 2013 at three Walmart-dedicated warehouse facilities in California.

While a judge ruled in January that Walmart would be a joint party to the lawsuit, it is unclear if the company will make any contributions to the settlement.

The lawsuit, filed in 2011 under Carrillo vs. Schneider Logistics et al., alleges that workers who load and unload boxes by hand from shipping containers and into trailers for Walmart often worked below minimum wage for double shifts, seven days a week with no required breaks or overtime premiums.

The workers, who were directly employed by loading and unloading companies, claim they were paid by a piece rate that was later found to be illegal and changed soon after the lawsuit was filed.

“When we raised these issues, we knew it would be a fight. Schneider tried to fire us. Walmart tried to deny responsibility. But we knew that the law was on our side, and that Walmart was responsible for the conditions in the warehouse. This settlement vindicates us and our struggle for justice,” one of the affected workers said in a press release [PDF] about the settlement.

The settlement agreement comes just months after a federal judge ruled that Walmart would face trial as a potential joint employer in the case. The ruling marked the first time a retailer would have had to stand trial for the actions of its warehouse contractors.

Walmart and Schneider disputed liability of the workers’ allegations because they were not the direct employers. However plaintiffs’ counsel argued that the presence of up to a dozen Walmart managers on site and the daily control over the work made the managers both aware of and liable for wage and hour violations at the warehouse.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.