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Wal-Mart sued for Racketeering

Wal-Mart Faces Class-Action Suit

By STEVEN GREENHOUSE
Published: November 11, 2003
NEW YORK TIMES

Lawyers filed a class-action suit against Wal-Mart yesterday in New
Jersey, saying it violated federal racketeering laws by conspiring
with cleaning contractors to cheat immigrant janitors out of wages.

The suit, in Federal District Court in Newark, seeks to represent
thousands of workers who washed and waxed floors nightly in Wal-Mart
department stores. It says the company and its contractors violated
RICO, the Racketeering Influenced Corrupt Organizations Act, by
conspiring not to pay the workers overtime. The suit says the
cleaners at hundreds of stores generally earned $325 to $500 for
working seven nights a week, usually for 56 hours or more each week.

The case was filed 18 days after federal agents raided 60 stores in
21 states to round up 250 janitors described as illegal immigrants.
Last week, executives at Wal-Mart, the world's largest retailer,
acknowledged that federal prosecutors had sent a target letter
saying the company faced a grand jury investigation over the
immigrants.

"This case is about the most powerful and richest company in the
world taking obscene advantage of the poorest and most vulnerable
people in the world," said a lawyer filing the suit yesterday, James
L. Linsey.

In the suit, Wal-Mart and its contractors are also accused of
failing to make required workers' compensation and Social Security
payments and failing to withhold federal payroll taxes. Wal-Mart and
its contractors are also accused of mail fraud, wire fraud, bringing
in and harboring illegal immigrants and engaging in a "pattern of
racketeering activity" to prevent officials from enforcing wage and
immigration laws.

"Wal-Mart and the contractor defendants," the suit says, "have
engaged in and profited from a nationwide fraudulent scheme designed
to defraud the United States government through the nonpayment of
taxes and injure and exploit the plaintiffs and those similarly
situated through wide-scale violation of protection of federal and
state labor and employment law."

A spokeswoman for the company, Mona Williams, said, "We do not feel
there is merit to the plaintiffs' claim and plan to move quickly for
the dismissal."

Executives of Wal-Mart, of Bentonville, Ark., have repeatedly said
since the raids on Oct. 23 that executives of the chain did not know
about the illegal immigrants or the contractors' not paying time and
a half for overtime. The executives said they had a strict policy
that contractors not hire illegal immigrants.

The plaintiffs say that Wal-Mart and the contractors were in effect
joint employers and that Wal-Mart is therefore responsible for the
misdeeds.

Maximino Méndez, 19, a Mexican who worked in a Wal-Mart in Old
Bridge, N.J., said he was one of the nine plaintiffs in the suit
because "Wal-Mart violated our rights." Mr. Méndez said he worked
every night for eight months, earning $325 for 60-hour weeks and
never received time and a half for overtime. He faces deportation
after being seized on Oct. 23.

The case resembles a suit that the Mexican American Legal Defense
and Educational Fund and private lawyers brought against three
supermarket chains in California two years ago, accusing them of
conspiring with cleaning contractors to deprive 2,100 janitors of
overtime pay.

In an unrelated case, a judge in Superior Court in Alameda County,
Calif., granted class certification on Friday to more than 100,000
Wal-Mart workers in California after lawyers said the company did
not give them their full rest and meal breaks and did not pay them
when they worked off the clock.

http://www.nytimes.com/2003/11/11/national/11WALM.html