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Wal-Mart says critical report on warehouse workers distorts facts

June 06, 2012|By Marc Lifsher
  • A shopper leaves a Wal-Mart store in Mountain View, Calif. A labor union-backed report says Wal-Mart's use of contractors drives down wages at some distribution centers.
A shopper leaves a Wal-Mart store in Mountain View, Calif. A labor union-backed… (Paul Sakuma / Associated…)

SACRAMENTO -- A critical report by a labor union-friendly research group distorts facts about how Wal-Mart Stores Inc. runs its massive national distribution network, the company said.

The report released Wednesday by the National Employment Law Project said Wal-Mart, the world's largest retailer, has applied its aggressive cost-cutting to logistics, helping drive down pay and benefits for U.S. warehouse workers.

The use of contractors and subcontractors represents a domestic "outsourcing" of warehouse operations that often relies on paid temporary workers, the report said, and the practice is being copied by Wal-Mart's competitors,

Wal-Mart spokesman Dan Fogleman said that almost all of the centersĀ  in the country are owned and operated by the company and not run by third-party logistics contractors.

The report focused on one of three contractor-run, Wal-Mart warehouse complexes, located in Mira Loma in the Inland Empire region of Southern California.

Subcontractors at Mira Loma -- Impact Logistics Inc. and Premier Warehousing Ventures -- last fall were fined more than $1 million by state labor regulators. They were charged with failing to maintain proper pay records for staffing company employees working at a center managed by Schneider Logistics Inc., the principal contractor for Wal-Mart.

In October, workers supported by a union organizing group, Warehouse Workers United, sued Schneider, Impact and Premier in U.S. District Court in Riverside. The complaint alleged that staffing company workers were underpaid and forced to work long hours in unsafe conditions. The three defendants denied the accusations.

Wal-Mart expects all its contractors and subcontractors "to comply with all applicable laws" related to pay, safety and other areas, spokesman Fogleman said.

What's more, "the third-party distribution center Wal-Mart uses in the Inland Empire is one of three of its type in the U.S.," he said. "Third-party DCs [distribution centers] are a fraction of our U.S. logistics network ... more than 120 company-owned and operated facilities across the country."

The Mira Loma center mainly receives and distributes imported goods that were shipped through the ports of Los Angeles and Long Beach, Fogleman said.

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