Schneider to Pay $21 Million To Settle Class-Action Suit

This story appears in the May 26 print edition of Transport Topics.

Schneider Logistics will pay $21 million to settle a class-action civil lawsuit brought by about 1,800 Southern California dockworkers who claimed they were not paid properly.

A “notice of proposed settlement” was filed May 13 in the U.S. District Court in Los Angeles and was signed by lawyers for the plaintiffs, Schneider and Wal-Mart Stores Inc., which owned the distribution center where the plaintiffs worked.

Terms of the settlement were worked out after two days of nonbinding mediation between the parties in San Francisco.

A final arrangement must still be certified by Judge Christina Snyder and will probably take effect at the end of this year or in early 2015, said Theresa Traber, lead attorney for Everado Carrillo and other members of the litigation class.

Schneider Logistics, a division of trucking and logistics company Schneider National Inc. of Green Bay, Wisconsin, has run Wal-Mart’s Mira Loma distribution center in Riverside County since 2006. Schneider also hired two smaller logistics companies, which in turn hired the dockworkers, or “lumpers,” who eventually started the legal action.

The case was filed in 2011 based on actions dating back to 2001.

“People weren’t being paid properly,” Traber said. “This result sends a message to all companies in the logistics industry that they are responsible and must treat employees fairly under the terms of the law,” she added.

Schneider offered a statement saying: “Schneider manages its operations with integrity and respect for its associates, subcontractors and customers. When we utilize third-party vendors, as we originally did in managing the warehouse work at the Mira Loma facility, we contractually require full compliance with all required laws and that all parties conduct business ethically.”

“Our customers hold us to the highest standards, and we in turn hold our vendors to the same high standards. We are deeply disappointed when those third-party vendors do not live up to our standards and fail to fulfill their contractual and legal responsibilities,” the company said.

The two vendors mentioned in court papers were Impact Logistics Inc. and Premier Warehousing Ventures, including its Rogers-Premier Unloading division. Impact and Premier hired and oversaw the lumpers.

Premier and Impact signed earlier settlements for $1 million and $700,000, respectively.

Traber said her clients worked on consumer goods from Asia that came into the ports of Los Angeles and Long Beach, California, on containerships. The lumpers unloaded the ocean boxes and either stored the products on-site at the center or loaded them onto trucks for distribution.

Traber said the Impact and Premier lumpers were paid on a piecemeal basis even though they were covered by the minimum-wage law. The pay statements they received offered few details on how the wages were calculated, but the paychecks were usually well below minimum wage.

“They were totally lacking” in useful information, Traber said of the pay statements. When the employees asked for details, the employers retaliated, Traber said, thereby lengthening the claims period.

Traber said employees filing suit can usually claim either three or four years of back wages, depending on the circumstances. Because of the hostile circumstances, though, Traber said Judge Snyder allowed the claims period to run back to 2001.

Wal-Mart and Schneider had argued since the start of the case that they should not be included because the lumpers were not employees of either company but rather of Impact and Premier.

In January, Snyder ruled against Wal-Mart’s and Schneider’s requests for summary judgment, saying the companies could be held liable during a trial.

“While Premier and Impact were the direct employers,” Traber said, “Schneider and Wal-Mart exerted huge amounts of indirect control.”

Wal-Mart spokesman Kory Lundberg said the retailer still uses the business model of mixing third-party logistics providers and in-house warehousing and trucking capacity.

In trucking, Wal-Mart has the fourth-largest fleet on the Transport Topics Top 100 list of private carriers, and it is also one of the nation’s largest purchasers of for-hire trucking services.

Schneider ranks No. 10 on the Transport Topics Top 50 list of logistics companies. Parent company Schneider National ranks No. 6 on the TT100 list of for-hire carriers in the United States and Canada.