Amazon Contractor Settles Warehouse Conditions Lawsuit

(Bloomberg) -- A leading logistics contractor and a group of staffing companies agreed to pay as much as $1.9 million to resolve allegations of wage-and-hour violations and retaliation at a Los Angeles-owned storage facility that houses Amazon.com products, among others.

A group of warehouse workers filed the proposed class action in 2014, claiming Amazon contractor California Cartage Co. and several staffing firms violated the state’s minimum wage law and the city’s “living wage” statute. The workers also alleged that the defendants didn’t give employees time to rest during periods of excessive heat, and retaliated against those who complained. 

Amazon.com Inc., which isn’t a defendant, declined to immediately comment. The Los Angeles allegations echo other lawsuits in recent years alleging the online giant used contractors that skirted regulations to cut costs. Earlier this month, New York-based non-profit China Labor Watch released a report alleging inadequate safety training and precautions at a Chinese factory owned by Foxconn, which produces Amazon’s Echo speakers and Kindle e-readers. Amazon said it had audited the factory and asked Foxconn to remedy violations.

In 2014, the U.S. Supreme Court ruled in favor of Amazon contractor Integrity Staffing Solutions, overturning a lower court ruling that would have allowed Amazon warehouse employees to seek pay for time spent waiting in line for security checks. In 2016, a Washington state judge certified a class of potentially thousands of current and former Amazon employees in a lawsuit alleging the company violated state law by not paying them for time spent in security lines during lunch breaks.

Also that year, former delivery drivers who had been employed by Amazon contractor Silverstar filed a lawsuit alleging that they were deprived of overtime pay and that Amazon shared legal responsibility due to the extent of Amazon’s involvement in evaluating and directing their work. That case later settled. The Washington litigation is ongoing, as are similar cases under Arizona, California and Nevada law involving either Amazon, its contractors or both. Amazon has regularly denied any wrongdoing.

In the Los Angeles case, the facility at issue is used by Amazon as well as Lowe’s, New Balance, Kawasaki Motors Corp, TJMAXX and Sears, according to the Warehouse Worker Resource Center, a pro-labor nonprofit. The litigants clashed over whether workers who sued were covered by a municipal policy requiring that some firms that lease city property pay a living wage.

In 2016, a judge granted a motion to dismiss those claims, saying the companies were exempt. But he denied a request to toss allegations that the companies had retaliated against workers. In February, a National Labor Relations Board judge ruled that California Cartage had illegally interrogated employees about their efforts to address workplace issues at the facility and made implied threats to employees about the consequences of taking collective action.

The proposed settlement, which attorneys for both sides set forth in a June 12 state court filing, would terminate the employees’ appeal of a separate, $800,000 wage-and-hour class action pact that California Cartage and other defendants reached in 2015. 

The plaintiff workers declined to comment. The logistics giant NFI Industries Inc., which acquired California Cartage last year, didn’t return a call seeking comment. NFI is a privately held company that operates more than 41 million square feet of warehouse and distribution space, according to the company. As part of the proposed settlement, the defendants deny any wrongdoing.

A final approval hearing is set for Oct. 25 in California state court.

©2018 Bloomberg L.P.