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Courthouse News Service
Class of Undocumented Workers Sues Wal-Mart
Chris Fry / October 18, 2010
NEWARK (CN) - In a federal class action, 42 named plaintiffs say Wal-Mart hired them knowing they were undocumented, stiffed them for overtime and for regular wages, paid them in cash or by personal checks from labor contractors, put them to forced labor through coercion, "violated immigration, money laundering and protective wage and hour laws," and routinely locked them inside stores while they worked night shifts.

Wal-Mart and some of its contractors settled federal complaints and paid millions in fines. The named plaintiffs, suing for the class, seek the wages of which they were cheated, and other damages.

Most of the named plaintiffs have names that indicate Eastern European descent, particularly Polish and Czech. Many say they worked more than 40 hours a week, seven days a week, and never were paid overtime.

Lead plaintiff Victor Manuel Zavala, one of two named plaintiffs with Latino surnames, claims that "beginning in no later than March 1997, senior Wal-Mart management, realizing that Wal-Mart could substantially reduce costs and substantially increase profits were it to rely on the labor of undocumented migrants to clean its thousands of stores, created a criminal enterprise that involved conspiracies to violate, as well as substantive violations, of federal immigration laws and other laws."

The class claims Wal-Mart engaged in a criminal RICO conspiracy involving "the employment, encouragement, harboring and transporting of undocumented workers," which the company hired through outside contractors.

Wal-Mart did it to duck taxes, including Social Security, and government regulations and to avoid having to pay for health benefits, according to the complaint.

The class claims Wal-Mart "sheltered the undocumented migrants by arranging or providing lodging for them and routinely transporting them across the United States to work at different Wal-Mart locations." The plaintiffs say that the company structures its business operations "in multiple shell corporations so as to shield the continued employment of the migrants from detection" and that "senior Wal-Mart executives ... knew of the scheme" and "permitted it to flourish."

The complaint adds: "The Wal-Mart Enterprise was directed by Divisional Vice Presidents within the Wal-Mart Stores Division with responsibility for in-store cleaning and procurement of services."

The class claims that Wal-Mart typically paid their wages to outside contractors, who then paid the migrant workers in cash or sometimes by personal check.

They also claim Wal-Mart locked them in stores overnight, "intentionally" and "against their will." Class members who complained about the treatment were "threatened with deportation or other adverse legal action."

Wal-Mart paid an $11 million fine in 2005 "in order to avoid criminal penalties" after being accused of many illegal immigrants to "provide floor cleaning services" from 1998 to 2003, according to the complaint.

"This action is directed at compensating the named plaintiffs and the class they represent for the harm caused them by this criminal enterprise."

They seek back wages and treble and punitive damages for RICO violations, conspiracy, violations of the Fair Labor Standards Act and false imprisonment. They are represented by James Linsey with Cohen, Weiss and Simon of New York, N.Y.

Wal-Mart Settles Case on Illegal Cleaning Crews for $11 Million
By Elise Castelli
March 19, 2005 12 AM PT

Times Staff Writer
WASHINGTON — Wal-Mart Stores Inc. agreed to pay the government $11 million to settle charges that it used hundreds of illegal immigrants to clean many of its stores, but an investigation concluded that the retailing giant didn’t know the janitors were undocumented, two federal agencies announced Friday.

Wal-Mart escaped criminal prosecution in the case. But the 12 independent contractors who hired the illegal workers agreed to plead guilty to criminal charges and pay a $4-million fine.

The five-year investigation found that Wal-Mart had retained undocumented workers through independent contractors to clean nearly 1,000 stores, according to court documents released along with terms of the settlement.

In addition to forfeiting the $11 million, Wal-Mart -- whose revenue last year topped $288 billion -- agreed to end practices that lead to the hiring of undocumented workers, to verify that its contractors complied with immigration laws, and to educate its managers about legal hiring practices.

The agreement with the departments of Justice and Homeland Security stemmed from a case targeting Wal-Mart contractors that was referred to federal authorities in 1998 by the attorney general of Pennsylvania.

In October 2003, the federal government raided 60 Wal-Mart stores in 21 states, arresting 245 undocumented janitors.

Many of the workers were deported. They came from Europe, Central America, South America and Asia, said officials at the Bureau of Immigration and Customs Enforcement, part of Homeland Security.

At the time of the raid, the government said it was specifically investigating whether Wal-Mart executives were aware of the practice of employing illegal immigrants and were allowing contractors to proceed as part of a strategy to reduce its labor costs.

Wal-Mart, which trumpets its low prices, has been accused by labor activists and others of unfair labor practices. Employees have accused the company of forcing them to work overtime without pay, a charge Wal-Mart denies.

Thomas A. Marino -- the U.S. attorney for the middle district of Pennsylvania, who prosecuted the case -- said Friday he was confident that there was no criminal activity on the part of Wal-Mart and believed the company did not know of the violations.

“The law allows us to prosecute the individual employers who employed the illegal immigrants. Wal-Mart was not the employer. Wal-Mart reached an agreement with an independent contractor and the contractor hired these individuals,” Marino said.

Michael J. Garcia, the assistant secretary of the Bureau of Immigration and Customs Enforcement, characterized the settlement as a “model for future cases.”

“This case breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself,” Garcia said.

Wal-Mart said it now used its employees to clean all of its U.S. stores, which include Sam’s Clubs and Neighborhood Markets.

“Today we are acknowledging that our compliance program did not include all the procedures necessary to identify independent floor cleaning contractors who did not comply with federal immigration laws,” Wal-Mart’s general counsel, Tom Mars, said in a written statement.

The lawyer for Christopher S. Walters, the owner of the 12 cleaning contractors charged, declined to comment on the settlement.

“The real issue here is that Wal-Mart and a lot of big retailers hide behind these rogue contractors,” said Stephen Lerner, director of the building service division of the Service Employees International Union. “The real question not answered here is how do these workers receive payment for the overtime, subminimum wage and being locked in stores overnight?”

Lilia Garcia, the executive director of the Maintenance Cooperation Trust Fund, a union-funded group that investigated wage violations concerning janitors working for California supermarkets, said the settlement showed that the government was “soft on business” and was “not serious in addressing the problem.”

Wal-Mart faces a civil suit in New Jersey seeking reparations for workers who said they were underpaid.

“Now Wal-Mart is free of criminal concerns and can focus on reparations for the people who worked in their stores,” said James L. Linsey, the lead lawyer for the plaintiffs in the suit.

The Hidden Truth Linking the Broken Border to Your Online Shopping Cart
The incoming Trump administration promises an immigration crackdown. But for years, the on-demand economy has been fueled by unscrupulous staffing agencies exploiting migrant workers.


By Steve EderDanielle Ivory and Marcela Valdes
Published Nov. 17, 2024
Updated Nov. 18, 2024, 1:14 p.m. ET

American companies routinely turn to staffing agencies to find workers for warehouses and factories.

Those agencies don’t all play by the rules.

They’ve built an unseen engine of the economy by recruiting and exploiting undocumented migrants.

Boston pizzeria owner convicted of forced labor and sentenced to 8.5 years after threatening his workers with deportation
BYSteve LeBlanc and The Associated Press
October 29, 2024 at 5:57 AM PDT

The owner of two Boston-area pizza shops convicted of forced labor for using physical violence and threats of reprisal or deportation against employees living in the country illegally has been sentenced to more than eight years in prison.

Stavros Papantoniadis, 49, of Westwood — the owner of Stash’s Pizza, a Massachusetts pizzeria chain — was sentenced Friday in federal court to 102 months in prison, one year of supervised release and ordered to pay a $35,000 fine.