Former Wal-Mart Janitors Denied Class Status in Labor Practices Suit

Mary Pat Gallagher

New Jersey Law Journal

A federal judge has declined to give final class certification to a suit by former Wal-Mart janitors over the labor practices of the world's largest retailer.

On June 25, Chief U.S. District Judge Garrett Brown in Trenton, N.J., found that because the plaintiffs worked for a variety of Wal-Mart contractors around the county, not for the company directly, they could not show they were "similarly situated" for class action purposes.

The 114 putative class members in Zavala v. Wal-Mart Stores, Inc., 03-cv-5309, worked in 180 stores in 33 states for 70 different contractors and subcontractors, for varying hours and wages, Brown noted. The lack of uniformity extended to their working schedules, how often they were paid, whether taxes were withheld, the duration of the employment and whether they worked for the contractor at other stores in addition to Wal-Mart.

The factual differences arising from the multiple contractual arrangements would also affect whether a particular worker would be deemed a Wal-Mart employee for purposes of federal hour and wage laws, a determination that turns on factors like the degree of control Wal-Mart had over their work.

Although Wal-Mart had guidelines on how its stores were to be maintained, "that does not establish that Defendant had the degree of supervision and control over every worker such that all workers, no matter what contractor they worked for or at what store, can be said to be an employee of Defendant for purposes of the [Fair Labor Standards Act, or FSLA]," wrote Brown.

"Whether the individual claimants were employees of Defendant within the meaning of the FLSA depends on the individual facts and circumstances relating to the various contractors and the activities at each separate store location," he added.

When U.S. District Judge Joseph Greenaway granted conditional certification on Dec. 29, 2004, allowing plaintiffs to notify potential class members and take discovery, he used a liberal standard, but a stricter standard applies at this later stage when there is more information and the decision is whether to decertify the class or grant final certification, Brown said.

The suit was filed in the wake of a coordinated raid by federal immigration authorities on Wal-Mart stores around the country on Oct. 23, 2003, that turned up hundreds of undocumented workers. Facing the possibility of criminal charges, Wal-Mart paid the government $11 million in a March 2005 civil settlement without admitting any wrongdoing.

In the meantime, Victor Zavala and 16 other plaintiffs sued on Nov. 10, 2003, only weeks after the raid, alleging Wal-Mart exploited their undocumented status, inducing them, through the contractors, to put in seven-day work weeks at low pay with no overtime, no weekends off and no sick days, vacations, medical coverage or worker's compensation.

The plaintiffs alleged that the contractors, with the knowledge and approval of higher-ups at Wal-Mart, routinely hired illegal immigrants from Mexico and Eastern Europe to work long hours, housed them in squalid quarters, paid them less than minimum wage and even locked them in Wal-Mart stores at night.

In addition to alleged violations of the FLSA, tax and discrimination laws, the plaintiffs asserted a claim under the Racketeer Influenced and Corrupt Organizations Act, contending Wal-Mart and the contractors created, engaged in and profited from a national criminal enterprise that employed, harbored and trafficked in illegal immigrant workers.

The plaintiffs originally sued some of the contractors, too, but in 2004 dropped the claims against them.

In 2007, Greenaway threw out the RICO counts and refused to allow an interlocutory appeal.

Meanwhile, armed with the conditional certification, the plaintiffs tried to construct a national class of undocumented workers employed as contract janitors at Wal-Mart stores since January 2000.

Unlike a typical class action, class members had to opt-in and the parties agreed on a questionnaire to be filled out by each would-be member. More than 200 opted in but only 114 fully completed the questionnaire and Greenaway held that only those 114 could be taken into account in deciding the final certification motion, filed Nov. 13, 2009.

When Greenaway was elevated to the 3rd U.S. Circuit Court of Appeals earlier this year, Brown took over the case.

The plaintiffs lead counsel, James Linsey, of Linsey Cohen Weiss & Simon in New York, declined comment on Brown's ruling, but he had argued in a brief that certification was warranted because Wal-Mart centrally managed its contracting of janitorial services and dictated uniform standards and methods of cleaning. He had a supporting declaration from Christopher Walters, who he identified as Wal-Mart's largest janitorial contractor at the relevant times.

Wal-Mart's attorney, Thomas Golden, of Willkie Farr & Gallagher in New York, referred a request for comment to Lorenzo Lopez, a company spokesman. Lopez issued a statement that Wal-Mart was pleased with the decision and that it has "strong policies and procedures in place to ensure compliance with all laws and we expect our service providers to do the same. " It also states that the case involves a seven-year old situation and since then, Wal-Mart has "implemented programs, to better ensure that all Wal-Mart vendors follow applicable laws, including employment and labor laws. Those who do not comply will no longer provide services to our company."

According to Forbes magazine, Wal-Mart last year had sales of over $400 billion and profits of over $14 billion.