Walmart Potentially Liable For Wage Violations As Joint Employer Of Subcontractors’ Employees

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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 in Carrillo v. Schneider Logistics Trans-Loading and Distribution, Inc., held that Walmart may be jointly liable for wage violations committed by the subcontractors.

In Carrillo, Walmart contracted with SLTD to operate the warehouses that received, processed and distributed merchandise on behalf of Walmart (and other retailers), and SLTD in turn subcontracted merchandise loading and unloading services to other entities. The plaintiffs were employed by the subcontractors that performed the merchandise loading and unloading services, and brought claims for unpaid wages, failure to maintain proper records and related claims against their employers, SLTD and Walmart. Walmart sought to dismiss the claims against it on the grounds that it could not be liable as 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 that Walmart imposed screening requirements on all employees hired to work at the warehouses, approved overall staffing levels, had oversight of hours worked, monitored and enforced productivity standards, influenced pay rates and working schedules, and owned the warehouses and equipment used at the warehouses.