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Court: Warehouse Can't Fire Contract Workers

A California judge ruled the workers, who are suing the warehouse and staffing provider, would likely be able to prove the firing was retaliatory.

February 6, 2012
Related Topics: Top Stories - Frontpage, ERP, Layoffs, Organizational Structure, Retaliation, Wrongful Discharge, HR/Workforce Trends, Miscellaneous Legal Issues, Policies and Procedures, Termination, Workforce Planning, Latest News
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A judge last week issued a preliminary injunction to prohibit firing of contract workers at a warehouse operation in Southern California, according to court documents. Workers were informed their jobs would end Feb. 24.

A judge ruled the workers, who are suing the warehouse and staffing provider, would likely be able to prove the firing was retaliatory.

Workers had filed a lawsuit against the warehouse operator, Schneider Logistics Inc., Premier Warehousing Ventures LLC — the company that staffed the operation — and others on Oct. 17, 2011. The suit alleged improper recordkeeping, inadequate payment for hours worked and failure to provide meal and rest breaks. The suit came after an inspection by the California Division of Labor Standards Enforcement found recordkeeping violations and issued administrative citations, according to court documents.

Premier Warehousing held a meeting with workers on Nov. 18, 2011, and gave them a termination letter saying their jobs would end Feb. 24, according to court documents. The company also said it would not rehire any of the workers. Premier also sent a letter to Schneider stating it was unable to sustain work under the present contract terms, but that it would be glad to discuss new arrangements, according to court documents.

In its decision, the court said it is likely plaintiffs (the workers) will prevail on their claim for retaliatory termination in violation of federal and state law and that plaintiffs would suffer irreparable harm among other findings. In addition, the court rejected Schneider's argument that it wasn't a joint employer.

"In order to establish that Schneider is a joint employer with Premier, plaintiffs must demonstrate that Schneider 'directly or indirectly, or through an agent or any other person, employs or exercises control' over plaintiffs' wages, hours or working conditions," according to court documents.

"Plaintiffs have offered substantial evidence that Schneider both indirectly and directly controls their working conditions," the court wrote. "This evidence includes: (1) declarations from workers that supervisors from both Schneider and Premier disciplined them, terminated them, and directed them how to do their work; and (2) the 2011–13 labor services contract between Schneider and Premier, which the court has already found gives Schneider contractual authority to control almost every material term and condition of the workers' employment."

The court also noted there is evidence that what employees are now doing will still need to be done even after the proposed firings by Premier, and that Schneider already negotiated a deal with a new company, RoadLink Workforce Solutions LLC, to take over from Premier.

"The court finds particularly significant that Schneider never offered Premier the higher contract rates it eventually agreed to with RoadLink, despite Premier's offer to 'discuss other arrangements,'" according to the court filing.

The warehouse operation serves Wal-Mart Stores Inc., according to court filings.

The Riverside, California, Press-Enterprise newspaper reported that 100 workers had faced firing.

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, email editors@workforce.com.

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