Phoenix Warehouse of California Hit with Overtime Pay Class Action Lawsuit

Los Angeles, CAPlaintiffs, including approximately 1,500 workers at Phoenix Warehouse of California between 2009 and 2016, allege that they were expected to work eight to 12 hours a day, without meal or rest breaks and without overtime pay. The lawsuit describes a rancid environment in which workers, mostly Latinos who could only speak Spanish, were threatened with deportation if they complained. One worker has also reported that she had to accede to the sexual advances of her manager in order to get paid for the day.

The allegations paint a grim picture. As described, these actions are gross and overt forms of wage theft and workplace violence perpetrated against vulnerable men and women, sweatshops in the truest sense of the word. The lawsuit seeks millions of dollars in restitution, interest, penalties and legal fees on behalf of the plaintiffs.

Phoenix Warehouse is a retail distribution center that delivers goods to Walmart, Target, HomeGoods and other retailers in Southern California. The workers in question were technically not employees of Phoenix Warehouse, but three staffing companies: Fairway Staffing Services of Bellflower, Coastal Employment of Pico Rivera and Diamond Staffing Services. Phoenix Warehouse and each of the staffing companies allegedly evaded overtime pay obligations by shuffling employees among the staffing agencies each week, so that the overtime pay threshold was never crossed. It was a shell game.

The use of staffing companies is common in the warehouse distribution industry and has been implicated in other wage theft cases. But California labor law provides a way to hold contractors liable for overtime pay violations of subcontractors.

The shifting of employees among contractors may add a new wrinkle here, especially if the facts show that none of the staffing companies was actually ever in violation of California overtime law. But if Phoenix Warehouse, alone, determined who the employee worked for from day-to-day or hour- to- hour, Phoenix may be responsible for legal wage payment.

The complaint also alleges that workers’ time cards were altered at Phoenix’s New Jersey headquarters to ensure that clocked hours never triggered an overtime obligation. The falsification of time records and destruction of evidence would certainly raise other legal issues.

Although some of the activities described in the lawsuit go back many years, the class action, itself, is still young. This may be one to watch for some time yet.