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Like many other employment law attorneys, we have been anxiously awaiting Federal Judge Christina Snyder’s ruling on whether Walmart can be added as a defendant in the case of Everardo Carrillo, et al. v. Schneider Logistics, Inc., et al., which is currently pending in the United States District Court for the Central District of California. The case at issue involves approximately 1,800 warehouse workers who move goods for Walmart in Southern California’s Inland Empire. Their complaint alleges numerous violations of the Fair Labor Standards Act (“FLSA”) and the California Labor Code; most notably, that the warehouse workers were routinely forced to work off the clock, denied legally required overtime pay, and retaliated against when they tried to assert their legal rights, or even asked how their paychecks had been calculated.

What is most interesting about the employee plaintiffs’ case is that, despite the fact that they were employed by warehouse operators attempting to guise themselves as subcontractors for Walmart, the plaintiffs may be successful in attaching legal liability to Walmart by establishing the multinational retail corporation as their “joint employer” under the FLSA. This finding would be significant as joint employers are individually and jointly liable for compliance with all of the applicable provisions of the FLSA. The factors that Courts generally measure in determining the joint employer status of an entity include the: (1) authority to hire and fire employees; (2) authority to determine work rules and assignments; (3) authority to set conditions of employment; (4) day-to-day supervision of the workforce, including employee discipline; and (5) control of employee records, including payroll, insurance, taxes, and the like.

Now, over a year after the plaintiffs filed their lawsuit, Judge Snyder has determined that the plaintiffs are allowed to add Walmart as a defendant in their extremely large and potentially costly lawsuit.

Judge Snyder’s Order rejected Walmart’s arguments which essentially amount to complaining that it was not added as a defendant in a more timely fashion and that adding Walmart as a defendant, at this point in the game, will “start this case over.”  Instead, Judge Snyder sided with the plaintiffs arguments, implicitly agreeing that the plaintiffs had uncovered evidence in the early discovery stages to substantiate Walmart’s liability for their alleged FLSA and California labor code violations.

Specifically, though they admit that they always knew that Walmart owned many of the goods that passed through the various warehouses at issue, the plaintiffs argued that they had only recently uncovered evidence of: (1) Walmart’s involvement in the management of the warehouses; and (2) Walmart’s control over the terms and conditions of the plaintiffs’ employment.  Moreover, the plaintiffs were successful in arguing that the information attaching liability to Walmart was solely within Walmart’s possession and control, so they were required to obtain discovery from Walmart before it could be properly named as a defendant.

Judge Snyder’s ruling is important to employment law attorneys, as it helps clarify precisely who may be sued in contract company / independent contractor relationships, and the outcome of the plaintiff’s case may open a new door to attaching liability to large corporations who attempt to shield themselves from legal liability through subcontracting relationships. Of course, it will also serve to advise employers on precisely how to further avoid legal liability in subcontracting relationships. Thus, it can easy be assumed that employment law attorneys will continue to closely watch the developments in Everardo Carrillo, et al. v. Schneider Logistics, Inc., et al.

If you even think that your employment rights have been violated or that you might need an employment lawyer, then call the right attorney to schedule a free and confidential consultation at 866-797-6040. Spitz, The Employee’s Law Firm is dedicated to protecting employees’ rights and solving employment disputes.


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