Walmart has a reputation in California and throughout the nation as an aggressive and effective cost-controlling machine. Its ability to offer low prices reflects how successful the company has been at running a lean, efficient supply chain. However, a California lawsuit is now claiming that the company went too far and is responsible for massive violations of federal labor laws.
This development happened in a California wage dispute case. Workers at a warehouse in Mira Loma claim that the facility's operators routinely cheat them out of pay and violate other employment laws.
Although the warehouse is an independently owned entity, it works as a Walmart contractor - shipping goods to Walmart stores all over the state. The lawsuit claims that Walmart used its position as the warehouse's only customer to pressure its managers to underpay the workers. According to the allegations, Walmart did this to help keep its supply chain costs as low as possible.
News sources quoted one of the employees as saying: "Walmart is responsible. They want to wipe their hands clean of the situation. But they make or break their contractors."
The plaintiffs decided to add Walmart as a defendant after deposing one of the company's employees who maintains an office at the warehouse to supervise its operations. This might indicate that information came to light that really does implicate Walmart in wage violations by the warehouse.
Unfortunately, few observers would find this surprising.
Source: Huffington Post, "Walmart targeted in Warehouse Worker Lawsuit," Jim Morris, Adithya Sambamurthy, Nov. 30, 2012