Walmart is so big and powerful that it exerts a powerful downward force on wages and working conditions not just in retail but throughout its supply chain of warehouses, manufacturers, and other producers, with other large chains always trying to keep up in the race to the bottom. Unions haven't been able to crack it, and almost certainly won't be able to without some other force restraining Walmart's ability to exploit and abuse workers. Workers, often supported by but not members of unions, are actively bringing complaints about violations of workplace safety, wage, and other laws to the government agencies responsible for policing employers. And the government is finding a lot of merit in those complaints. In fact, if you look at the patterns, it's pretty clear that lawbreaking is one of Walmart's foremost strategies for lowering costs and increasing profits.
For instance, Walmart suspended Louisiana's C.J.'s Seafood last month after some terrible publicity. Undocumented immigrant workers claimed they'd been forced to work shifts up to 24 hours long, among other abuses. This week, the Department of Labor hit C.J.'s with hundreds of thousands of dollars in fines and back pay.
The Occupational Safety and Health Administration found 12 violations, 11 of them serious, including a blocked exit, lack of fire extinguishers, and temporary wiring. Those violations carry more than $34,000 in fines (though fines usually get knocked way down before they're actually paid). Meanwhile, the Wage and Hour Division of the Labor Department found minimum wage, overtime, and record-keeping violations, as well as violations of the H-2B visa program: C.J.'s didn't pay overtime rates for workers working more than 40 hours a week, illegally deducted from worker pay for necessary equipment like gloves and aprons, didn't keep records of time worked, and "violated H-2B provisions by misrepresenting its temporary need for foreign workers, including the dates of need and number of workers needed, and also by failing to pay the required wage rate."
"This employer took illegal advantage of the H-2B program, which put it in a position to undercut its competition that plays by the rules," said Nancy Leppink, deputy administrator of the Wage and Hour Division. "American workers seeking jobs should not be compelled to accept substandard wages and working conditions due to employers' abuse of temporary foreign worker visa programs."
A total of $76,608 is due to the 73 workers, and the company is liable for an additional $70,014 in liquidated damages. The division also has assessed $32,120 in civil money penalties under the FLSA for willful violations of the employer's obligation to pay overtime and $35,000 in civil money penalties for willful violations of the H-2B program.
C.J.'s is saying it won't pay all of the back wages it owes, or the liquidated damages or civil money penalties, so the government is going to have to go after that. If you're tempted here to think "this is just one Walmart supplier and Walmart has suspended it," bear in mind that such abuses are common in Walmart's supply chain. Recently, to take another example, workers filed safety complaints
against a warehouse that, while run by a contractor, handles goods exclusively for Walmart. There
The impact of the immense pressure on Walmart suppliers can easily be seen at what workers call simply "the Crossdock". Workers say they are given brutal quotas for the number of boxes that they need to shift each hour. Supervisors, they say, make it clear that any failure to meet those quotas – even at the risk of physical injury – could be the loss of a job. "I feel that I am just something they could use and throw away," said Limber Herrera, 29, pictured, who is supporting a wife and two children on his wage.
While the complaints against that warehouse are under investigation, other Walmart-contracted warehouses, including ones run by the same company that runs this warehouse, have been hit with dozens of safety violations
and hundreds of thousands of dollars in fines.
Many of the worst abuses are at Walmart contractors and suppliers, where the retail giant exercises significant control, but can (try to) deny knowledge of and responsibility for what goes on, claiming the violations come from contractors and staffing agencies, not Walmart itself. That's an awfully weak claim, given how widespread the safety and wage violations are in Walmart's supply chain and the fact that the downward pressure on prices and the overall control Walmart exerts on its suppliers is widely reported. It's especially weak in the case of warehouses and other suppliers that work exclusively or overwhelmingly for Walmart.
But Walmart itself engages in such behavior. Just a few months ago, Walmart agreed to pay $4.8 million in back wages for overtime violations. The company had been treating vision center managers and asset protection coordinators as employees exempt from overtime pay requirements, but in fact they were not exempt and deserved overtime pay. That's $4.8 million settlement is dwarfed by at least three other cases in recent years involving Walmart's failure to pay overtime workers had earned. Then there are the gender discrimination claims filed by nearly 2,000 women in 48 states. Recently, workers who have been organizing at Walmart, not to unionize but just to have some of their concerns addressed, alleged they have been fired in retaliation for their activism.
Walmart isn't going away anytime soon, and neither is the damage it does to workers, communities, taxpayers, and the economy. But given how much the company relies on actively breaking the law to keep costs low and workers downtrodden, using the law, and government oversight agencies, to rein in and punish some of the worst violations is an important part of slowing the race to the bottom and making a strong statement that breaking the law is not an acceptable path to profit. And this is another area where elections matter a great deal: Would a Mitt Romney Department of Labor have taken such strong action against C.J.'s Seafood?