CWS 3.0: February 8, 2012

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News: Judge Rules Firms Can’t Fire Contract Workers

A federal judge last week issued a preliminary injunction to prohibit the firing of contract workers at a warehouse operation in Southern California, according to court documents. The workers had been informed their jobs would end Feb. 24.

The termination notice had come after workers filed a lawsuit against the warehouse operator, a staffing provider and others. However, the court said it was likely workers could prove the firings were “retaliatory termination” and not allowed under federal and state law.

Warehouse operator Schneider Logistics Inc. and staffing provider Premier Warehousing Ventures LLC must not terminate the workers’ jobs, under the preliminary injunction. However, the court did not require Premier and Schneider to continue working together, though “that is but one of the several options at [the companies’] disposal,” according to the preliminary injunction.

The workers’ lawsuit alleges improper recordkeeping, inadequate payment for hours worked and failure to provide meal and rest breaks. The suit, filed Oct. 17, 2011, came after an inspection by the California Division of Labor Standards Enforcement found violations, 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.

Schneider argued it shouldn’t be subject to a preliminary injunction against firing the workers because it wasn’t a joint employer. But the court rejected that argument.

“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.”

Separately, 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, Calif.) Press-Enterprise newspaper reported that 100 workers had faced firing.

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