Article 43


Sunday, June 18, 2017

Culture of Fear in the Workplace

image: bad boss

New study finds more sweatshops than Starbucks in Chicago

The study finds that among employees who dared to speak up about workplace injustices 58% experienced retaliation

By Jeff Schuhrke
In These Times
May 28, 2017

Illegal abuses in low-wage workplaces are largely going unreported by workers because of a realistic expectation their bosses will retaliate against them for speaking up, according to a NEW STUDY released this week.

The report, “Challenging the Business of Fear”, was prepared by Raise the Floor Alliance, which is a coalition of Chicago worker centers, and the National Economic and Social Rights Initiative (NESRI). Surveys and interviews were conducted with nearly 300 Chicago-area workers from a variety of low-wage industries, including warehousing, manufacturing, food service and retail.

The study finds that among employees who dared to speak up about workplace injustices like unsafe conditions, wage theft, injuries, sexual harassment and discrimination, 58 percent experienced retaliation. Of workers who reported legal violations to regulatory agencies like the Illinois Department of Labor, Department of Human Rights, or the Occupational Safety and Health Administration, over 80 percent said their employer retaliated against them.

Sophia Zaman, executive director of Raise the Floor Alliance, said at a press conference Thursday that retaliation has become so normalized, it’s basically a way of doing business.

“Three quarters of our participants reported two or more violations of their legal rights in their current job. This is the definition of a sweatshop,” said Brittany Scott, senior research strategist at NESRI.

Scott said the study discovered more than 180 sweatshop-like workplaces: “That’s more sweatshops than Starbucks in Chicago.”

Despite having witnessed or experienced multiple workplace abuses, 73 percent of the employees surveyed said they chose to keep quiet at least sometimes due to fear of reprisals.

“Mostly, people don’t bother to fight,” said Victoria, an unemployed factory worker quoted in the report. After telling her employer about injuries she sustained on the job, Victoria was initially given more physically intensive work as retribution. Then, she was fired. “They see people speak up and suffer reprisals and think its not worth it.”

The study found that the most common kinds of retaliation were getting fired, having hours cut, or, in the case of temp workers, being placed on a temp agency’s “Do Not Return list” - a form of blacklisting. Employers also retaliated by threatening to call police or immigration authorities, and sometimes even resorted to physical violence, the report notes.

“We’ve seen on the ground that even if a worker leader is well versed on their rights and knows how to report workplace injustice, the threat of retaliation can prevent them from acting,” Zaman said.

According to a recent investigation by the Chicago Reporter, only one in four minimum wage complaints in the city are investigated. This is partly because many workers do not submit the required affidavits necessary for an investigation to be opened, knowing their employers would be given a copy of the affidavit and fearful of the consequences.

Threats of reprisals are particularly paralyzing for undocumented workers or workers with undocumented family members, especially in light of President Donald Trump’s anti-immigrant policies. Across the country, staff with the U.S. Department of Labor report more difficulty enforcing workplace standards since Trump took office because undocumented workers are too fearful to cooperate with them.

“Retaliation is where enforcement breaks down, and addressing it is what we need to do to restore rule of law to our workplaces,” Scott said.

Though employer reprisals are illegal, Scott argued that the complicated patchwork of enforcement frameworks makes it nearly impossible for workers to get relief from retaliation, and if they do, it’s too little, too late.

The study found that when workers who had been retaliated against sought legal remedies, 55 percent said their complaints were not taken seriously and 66 percent said they did not receive adequate relief.

Under current laws in most states, including Illinois, the burden of proof is on workers to demonstrate that their employer fired them out of retaliation and not for some other reason, like poor performance or company downsizing.

“It’s too often impossible for workers to prove they were fired out of retaliation, because employers can fire them for virtually reason at all,” Zaman said. “Plausible deniability is all too available to abusive employers.”

Furthermore, the report notes that often the only available legal remedy for retaliation is reinstatement and back pay, which does not cover instances where reprisals took forms other than termination, or where victims cannot or do not wish to return to a particular job they were fired from. The report calls for more universal forms of relief like monetary damages, as well as legal penalties for guilty employers.

A bill recently introduced in the state legislature by the Illinois AFL-CIO could address some of the problems around reprisals. The Wrongful Discharge from Employment Act, supported by Raise the Floor Alliance and NESRI, would force employers to provide fired workers with a clear and legitimate reason for the discharge, essentially proving that it was not done in retaliation.

Raise the Floor Alliance and NESRI also support the creation of a Chicago Office of Labor Standards to ensure more rigorous enforcement of worker protections at the local level.

Ultimately, Zaman and Scott believe that workplace organizing is the best way to confront the climate of fear and enforce legal protections, and stress that worker centers can play a valuable role.

“The culture of fear is on purpose”, Zaman told In These Times. “Employers know they can get away with abuse.”



The Culture of Fear in the Workplace

By Bill Gee
The Nolan Chart
April 12, 2011

We have all heard this statistic before the top 1% of the population controls 60% of the nation’s wealth, the top 5% controls 80% of the nation’s wealth, and the rest of us controls about 20%. Those individuals at the top of the economic latter do not have superhuman abilities; they need an army of people to help them rule their empires. This army must not only be willing to do their jobs without question, but they must also do their jobs with such enthusiasm as to make their masters richer.

A friend of mine was recently commiserating about an email he had recently gotten from the CEO of his company. In the beginning of the letter, the CEO thanked everyone for their hard work and dedication to the company. The employees for this company often work on the weekends during crunch times, they work through their lunch breaks, and often stay at their desks or in their offices long after the evening rush hour. Because of their hard work, the company had a very successful year. Unfortunately, due to the Ҕuncertain economic climate, the annual bonuses to employees under the management level would need to be cut this year, and annual salary increases would be no more than 1/2%. Next year, if everyone keeps up the good work, then they may see a raise of 3 to 5%, but that is subject to change depending on ֓economic conditions. In the meantime, the company’s stock paid out a generous dividend to its investors and the upper management of the company got extra bonuses for increasing company productivity.

To sum it up, with inflation at about 4% this year, all employees at this company got a 3.5% pay cut despite the fact that the company itself had a very profitable year due in large part to the fact that many employees have given up spending time with their families. In the meantime, the upper managers who already have salaries in the seven digits, received a king’s bounty off the labor of their minions.

The next day, everyone came to work and re-dedicated themselves to finding new and better ways of doing their jobs in the hope that next year their efforts will be noticed by management.

The employees of this company are not stupid. Most have college degrees and/or MBAs. They understand the rules of the game and can quote ԓline and verse of what upper management is doing to them, yet they put up with it.

Debt Slavery

The reason why most of us are willing and active participants in this cruel treatment by upper management is because we are convinced that we have no choice. The choices we had to make to put ourselves into our cubical careers have made us into de-facto slaves of our upper management masters.

Student Loan Debt

The average student debt load is $20,000 to $50,000 depending on the level of education the student received. For doctors, the debt load can be as high as $100,000. Since student loan debt is protected from Bankruptcy laws, this is a debt you will carry with you for the rest of your life. If you refuse to pay it, your wages can be garnished, your tax refunds can be withheld, and your heirs can be held liable for the debt after your death. In order to pay that debt off, you need to have a job.

Home Debt

A home is more than a place to live. If you are paying a mortgage on your home, it’s your biggest liability. If the roof leaks, you need to pay to get it fixed. If the water heater goes, or termites are found in the basement, it is your responsibility to get it fixed. Home Equity ԓlines of credit, reverse mortgages, and other home re-finance products ensure the economy that you will remain in debt to your home long after the terms of the original mortgage is passed. In order to pay for all of that, you need to have a job.

At-Will Employment

With the decline of unionism, most of us are what are called “At-Will” employees of the companies we work for. In other words, we work at the “will” of the employer, and our tenure of employment can end without prior notice. In practice, it is a lot more complicated than that, but its impact on the culture of the workplace is that it promotes a climate of fear that prevents employees from voicing ethical or legal concerns about how they do their jobs for fear that by doing so they will be fired.

Financial-Based Performance

Every six months or every year, most white collar employees must undergo a stressful performance review by their superiors. On the top of most management’s list of priorities are financial performance factors. Were you able to do your job at a superior level of performance despite a decreased level of compensation or resources at your desk? Were you able to find ways to reduce the company’s overhead expenses by increasing productivity or cutting back on customer service? If you answered ԓyes to both of those questions, you will receive a “favorable” or “outstanding” performance review. This will have little or no impact on your annual raise because that was determined months before your review began, but what you hope it will do for you is that if a layoff is coming, your superiors will view you as a “good: worker and they will decide to lay off your “not-so-good” co-workers instead.

One of the major casualties of Financial-Based Performance reviews is customer service and ethics. If an employee’s annual bonus is measured entirely on financial benchmarks, then they have a disincentive to provide superior customer service to the company’s clients. Another casualty is a disincentive to work as a team with your co-workers. If your goal is to “outshine” your co-workers, why would you want to share your innovational ideas with them? In many cases, employees will “throw under the bus” an employee they feel is underperforming in the hope that management will punish that employee and reward them for bringing the unproductive worker to managment’s attention.

Rule By Fear

In short, we do the bidding of our corporate masters because we fear the consequences of refusing to do so. Despite advanced degrees and specialized knowledge our jobs demand, we believe that we are easily replaced if we should step out of line. If we step too far out of line and become a “whistleblower” to state or Federal authorities, not only will we be out of a job, but we will need to find another career altogether as we spend the next six to ten years of our lives fighting in the courts to restore our reputations and receive our lost compensation.

It is far easier to simply do your job, not to question your superiors (except for ways to do your job more efficiently) and hold onto the vain hope that you will earn enough to pay your bills and pay down your debt, which you know in your heart is difficult, if not impossible to do.

Your Little Secret

Despite the culture of fear that surrounds most workplaces, your corporate masters cannot do what they do without you. As a white-collar worker, you possess specialized knowledge and training in the inner workings of your organization. If you work to educate yourself about the industry, you will also gain an understanding of how your knowledge and experience can benefit society as a whole. Your secret is that if you are no longer afraid, and that if your co-workers are no longer afraid, then perhaps things can be changed for the better.

We’ll just leave it at that.



The Culture of Fear in the Workplace: Part 2

By Bill Gee
The Nolan Chart
June 3, 2011

n the first column that I wrote on this topic, I briefly mentioned the insidious nature of “At Will Employment” as a tactic that employers use to instill a culture of fear in their employees. After all, if an employee feels as though they can be fired at any time for any reason, then they will be more willing to tolerate and/or remain silent about clear ethical and financial misconduct of their bosses or the company as a whole. But what happens when the ethical or criminal violations are directed against the employee themselves? What recourse or remedy can an employee, who can be fired for whatever reason, seek?

Title VII of the CIVIL RIGHTS ACT OF 1964 bars discrimination on the basis of race, color, sex or national origin. Since the Acts passage, the courts have expanded Title VII protections to also include sexual orientation and it has also added HARASSMENT to the definition of discrimination. (Barnes v. Train, 1974) Therefore, if an employee feels as though they are either being harassed by their boss or they were fired for any reason under Title VII of the Civil Rights Act, they have the right to hire a lawyer and sue their boss or employer in Civil Court, right?

Mandatory Arbitration

In an effort to reduce the overall number of cases filling up Court dockets across the country, employers started to employ in-house arbitration panels to resolve employee complaints. These were so successful that soon employers started to make arbitration mandatory for all new hires.

Employers routinely require employees to enter into pre-employment contracts wherein the employee gives up the right to pursue any claims against the employer, including Title VII and other statutory claims. These are largely “take it or leave it” employment contracts and the employee has little to no bargaining power. Often, the signing of a mandatory arbitration agreement is a condition of employment, and in some cases, it is included in the employment application. Applicants who are limited in employment options are essentially required to sign such agreements. (Source: Landry & Hardy, 2008, MANDATORY PRE-EMPLOYMENT ARBITRATION AGREEMENTS: THE SCATTERING, SMOTHERING AND COVERING OF EMPLOYEE RIGHTS, UNIVERSITY OF FLORIDA JOURNAL OF LAW & PUBLIC POLICY, Vol. 19)

The practice of mandatory arbitration was upheld by the Supreme Court in Gilmer v. Interstate/Johnson Lane Corp. (1991), which has since created an entire industry of arbitration panels across the country. With the expense of a single in-court litigation easily costing millions of dollars, it is no wonder why employers have embraced the arbitration process in order to resolve employee disputes.

How it Works

Let us say that something happens at work that you believe violated your Title VII rights. Let us also say that what happened was the result of a direct action by one of your superiors and this action had an adverse effect on your ability to do your job effectively.

If you signed a Mandatory Arbitration Clause in your employment contract, you have no choice but to schedule a hearing for binding arbitration. Larger companies have in-house arbiters who tend to be lawyers who are on the same payroll you are. Smaller companies usually hire an arbitration firm or they have one available on retainer. At the meeting, you explain your side of the argument and your boss gets to explain their side. In the end, the arbiter makes a ruling that is binding on both sides. Both you and your boss have already agreed via the contract that whatever the arbiter decides cannot be appealed and you have already agreed to not take your case into the court system. The only loophole available to you to sue in the civil court system is if other people in your office have suffered the same injustice and therefore you can present yourselves as a class. Unfortunately, this loophole may have just been closed by the Supreme Court in April. (ATT Mobility v. Concepcion, 2011)

Another problem with Mandatory Arbitration is that the Rules of Evidence traditionally observed in the civil and criminal courts are generally ignored. Under traditional rules of evidence, both sides are obligated to share any and all evidence they have gathered to build their case prior to the hearing date. That way, both sets of attorneys can examine each case and decide on the best defense. In arbitration, your boss is under no obligation to provide you with the evidence against you prior to the hearing, which gives you no chance to mount a reasonable defense. Since employees are often representing themselves, they generally have no idea how to legally defend themselves if the evidence presented by their bosses are misinterpretations of actual events or outright lies.


Your boss may be a wonderful person and a joy to work for. You may find that your company does good work and that you enjoy coming to work each day. But the Civil Rights Act was designed for those firms where this is not the case. According to Susan Antilla, the culture of sexual harassment is still alive and well on Wall Street and that arbitration is partly to blame for that. When you feel as though your dignity and your rights are being compromised at your job, and you have already signed away your ability to receive a fair hearing, what options are left to you? If you quit, you will not be eligible for unemployment compensation. If you take your boss to the company arbiter, you may have just made a bad situation worse. If you manage to find enough other victims to form class, you may find your case thrown out in appeal.

In the end, if you want to continue paying your bills, you will just take the abuse, do what you are told, and keep your mouth shut.

Take Your Power Back

Your other option is to take your power back. Use the blogosphere to tell your horror stories and join movements that will work to end this culture of wage slavery that feeds the power of the Corporate Ruling Elite.

Believe it or not, we are in the majority and their days are numbered now that We the Peopleԓ are onto them.



The Toxic Workplace: Avoiding the Culture of Fear

Strategic Inventory Management
June 17, 2011

The economic loss created by fear in the workplace is immeasurable. Employees who labour within a command-and-control management hierarchy are frequently motivated by threat and coercion. Not only does fear destroy any sense of team spirit and pride, but it also shuts down important communication channels, inhibiting the flow of creative, constructive, and corrective ideas upstream. 

Just how might the front-line employee fall victim to fear at the workplace? In the 1992 classic movie Glengarry Glen Ross, Alec Baldwin masterfully portrays the character Blake, who motivates a small real estate sales staff through fear and intimidation. The results of Blakes sales contest, where salesmen placing below second place get fired, are tragic. Indeed, failure is guaranteed and engineered into the process. The characters endure humiliation, desperation, deceit, theft, and scandal as they grasp at dignity and struggle to salvage their jobs, by any means necessary.

Workplace fear and intimidation might not play out as dramatically as it did in Glengarry Glen Ross. Nevertheless, it is real and equally menacing. The weapons of fear include threats, harassment, exclusion, and unattainable goals. The fearful employee worries that he will lose his job, be demoted, be denied salary increases, be assigned menial tasks, or otherwise be constructively dismissed. Working in a constant backdrop of a fearful environment, the employee may become withdrawn, vengeful, depressed, abusive, or even violent.

Quality Management guru, the late Dr. W. Edwards Deming, included ӔDrive Out Fear as one of his famous ғFourteen Points for achieving total quality in business. Deming was concerned mostly about the kind of fear that prevents the average worker from finding out how to do the job correctly. He worried about the fear that prevents employees from asking questions, from rocking the boat, from suggesting new ideas, and from challenging the status quo. “Fear takes a horrible toll,ԓ said Dr. Deming. Fear is all around, robbing people of their pride, hurting them, and denying them a chance to contribute to the company.”

In the 1960’s, Douglas McGregor of MITs Sloan School of Management developed what came to be known as “Theory X” of organizational behaviour. The Theory X manager has little respect for employees. He considers them to be lazy, work-averse, and motivated only by self-interest. He feels threatened by the employee who asks too many questions. As such, the Theory X manager institutes a system of close supervision and tight controls, bolstered by a culture of blame. Within this punitive environment, employees learn to mistrust management. They keep quiet. Such a tyrannical manager may be successful in the short term, but fails dismally in the long haul, leaving behind him a trail of destruction and shattered lives. McGregor found that this approach is a major cause of diseconomies of scale in large businesses, and proved it to be counter-effective.

Valuable employees may simply leave the toxic workplace. This is terribly costly to any enterprise. Human Resources expert Susan M. Heathfield of Michigan State University offers advice in her “Top Ten Ways to Retain Your Great Employees.” Gathering data from exit interviews, Heathfield proposes antidotes. She has concludes that in order to retain great employees, firms should:

Ensure employees know clearly what is expected of them every day.

Provide high quality of supervision.

Ensure that employees feel that they may speak their minds freely within the organization, without fear of recrimination.

Utilize employees’ talents and skills.

Promote fairness and equitable treatment.

Provide opportunities for staff to grow in career, knowledge, and skill

Never allow employees to feel anonymous or alone.

Never threaten a persons job or income.

Encourage reward, recognition, and appreciation. 

The enlightened manager encourages participation and input. She fosters an environment of learning and interaction. She is self-confident, but not narcissistic. She puts the welfare of the company ahead of her personal aspirations. She is a team leader. She treats her staff’s opinions with respect. She entrenches processes that allow suggestions for continuous improvement initiative.  She knows how to answer questions about methods and procedures, or knows how to get the answers. She takes great joy in seeing her employees grow, get promoted, and get raises in pay. She builds enduring teams of people who love their work. She will succeed.



Forced into debt. Worked past exhaustion. Left with nothing.

By Brett Murphy
USA Today
June 16, 2017

Los Angeles Samuel Talavera Jr. did everything his bosses asked.

Most days, the trucker would drive more than 16 hours straight hauling LG dishwashers and Kumho tires to warehouses around Los Angeles, on their way to retail stores nationwide.

He rarely went home to his family. At night, he crawled into the back of his cab and slept in the company parking lot.

For all of that, he took home as little as 67 cents a week.

Then, in October 2013, the truck he leased from his employer, QTS, broke down.

When Talavera could not afford repairs, the company fired him and seized the truck—along with $78,000 he had paid towards owning it.

Talavera was a modern-day indentured servant. And there are hundreds, likely thousands more, still on the road, hauling containers for trucking companies that move goods for Americaגs most beloved retailers, from Costco to Target to Home Depot.

These port truckers—many of them poor immigrants who speak little English—are responsible for moving almost half of the nations container imports out of Los AngelesҒ ports. They don’t deliver goods to stores. Instead they drive them short distances to warehouses and rail yards, one small step on their journey to a store near you.

A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.

If a driver quit, the company seized his truck and kept everything he had paid towards owning it.

If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Then they turned around and leased the trucks to someone else.

Drivers who manage to hang on to their jobs sometimes end up owing money to their employers essentially working for free. Reporters identified seven different companies that have told their employees they owe money at week֒s end.

The USA TODAY Network pieced together accounts from more than 300 drivers, listened to hundreds of hours of sworn labor dispute testimony and reviewed contracts that have never been seen by the public.

Using the contracts, submitted as evidence in labor complaints, and shipping manifests, reporters matched the trucking companies with the most labor violations to dozens of retail brands, including Target, Hewlett-Packard, Home Depot, Hasbro, J.Crew, UPS, Goodyear, Costco, Ralph Lauren and more.

Among the findings:

Trucking companies force drivers to work against their will Ֆ up to 20 hours a day by threatening to take their trucks and keep the money they paid toward buying them. Bosses create a culture of fear by firing drivers, suspending them without pay or reassigning them the lowest-paying routes.

֕To keep drivers working, managers at a few companies have physically barred them from going home. More than once, Marvin Figueroa returned from a full days work to find the gate to the parking lot locked and a manager ordering drivers back to work. ғThat was how they forced me to continue working, he testified in a 2015 labor case. Truckers at two other companies have made similar claims.

ԕEmployers charge not just for truck leases but for a host of other expenses, including hundreds of dollars a month for insurance and diesel fuel. Some charge truckers a parking fee to use the company lot. One company, Fargo Trucking, charged $2 per week for the office toilet paper and other supplies.

Drivers at many companies say they had no choice but to break federal safety laws that limit truckers to 11 hours on the road each day. Drivers at Pacific 9 Transportation testified that their managers dispatched truckers up to 20 hours a day, then wouldnՒt pay them until drivers falsified inspection reports that track hours. Hundreds of California port truckers have gotten into accidents, leading to more than 20 fatalities from 2013 to 2015, according to the USA TODAY Network’s analysis of federal crash and port trade data.

Many drivers thought they were paying into their truck like a mortgage. Instead, when they lost their job, they discovered they also lost their truck, along with everything theyՒd paid toward it. Eddy Gonzalez took seven days off to care for his dying mother and then bury her. When he came back, his company fired him and kept the truck. For two years, Ho Lee was charged more than $1,600 a month for a truck lease. When he got ill and missed a week of work, he lost the truck and everything hed paid.

ҕRetailers could refuse to allow companies with labor violations to truck their goods. Instead theyve let shipping and logistics contractors hire the lowest bidder, while lobbying on behalf of trucking companies in Sacramento and Washington D.C. Walmart, Target and dozens of other Fortune 500 companies have paid lobbyists up to $12.6 million to fight bills that would have held companies liable or given drivers a minimum wage and other protections that most U.S. workers already enjoy.

Since 2010, at least 1,150 port truck drivers have filed claims in civil court or with the California Department of Industrial RelationsҒ enforcement arm, known as the labor commission.

Judges have sided with drivers in more than 97% of the cases heard, ruling time after time that port truckers in California cant legally be classified as independent contractors. Instead, they are employees who, by law, must be paid minimum wage and canҒt be charged for the equipment they use at work.

The rulings stop there. They do not address specific allegations of abuse by drivers, including whether trucking companies physically barred them from leaving work or ordered them to work past federal fatigue limits.

But allegations like those have been made in sworn testimony in hundreds of the cases, virtually all of which ended with trucking companies ordered to repay drivers for truck expenses and lost wages. The USA TODAY Network found that at least 140 trucking companies have been accused by at least one driver of shorting them of fair pay or using threats to squeeze them to work longer hours.

Prominent civil rights leader Julian Bond once called California port truckers the new black tenant farmers of the post-Civil War South. Sharecroppers from that era rented farmland to make their living and regularly fell into debt to their landlords. Widespread predatory practices made it nearly impossible for the farmers to climb out.

Through lease contracts, Californias port truckers face the same kinds of challenges in ways that experts say rarely happen in the U.S. today.

ғI dont know of anything even remotely like this,Ҕ said Stanford Law School Professor William Gould, former chairman of the National Labor Relations Board and one of the nations top labor experts.

ғYoure working to get yourself out of the debt. You just donҒt see anything like that.

Reporters tried to contact owners and managers at more than 30 trucking companies. Many did not respond or declined to comment.

Those willing to answer questions said they have never used truck leases as a way to mistreat drivers. Several insisted that truckersԒ allegations have been manufactured as part of a union organizing campaign by the Teamsters. The union has for years helped drivers file labor complaints and lawsuits.

IӒm not going to say that there were no violations out there, said Weston LaBar, executive director of the Harbor Trucking Association. But, he added, they were ԓunintentional, the result of market pressures that threatened to bankrupt trucking companies.

LaBar said he wasn’t aware of companies still drawing up leases as more trucks get paid off. But drivers all over the industry are still locked in contracts they signed years ago.

Some company owners said their lease-to-own programs were a favor to truckers who might otherwise have been out of work. And there are drivers who make it through the contract to own their trucks, something thatԒs grown more common with time and a rebounding economy. Drivers who can’t make a living aren’t working hard enough, many company executives say.

Our owner very generously went out and purchased a fleet of clean trucks,Ӕ said Marc Koenig, a vice president at Performance Team, which has lost cases to 21 drivers at the California labor commission. ThatӒs what really frustrated our owner. He really reached out and helped these guys.

Koenig answered questions while traveling to Massachusetts to meet with TJX, the $49-billion parent company of retailers T.J. Maxx, Marshalls, and HomeGoods.

“We take these concerns very seriously at TJX,” the company said in a statement, citing its vendor “code of conduct” that requires contractors on its supply chain to follow the law.

CaliforniaԒs port truckers make it possible for the Walmarts and Amazons of the world to function. Even so, most of the two dozen retail companies contacted by the USA TODAY Network declined to comment, some saying they had never heard of the rash of labor violations at their primary ports of entry.

Only Goodyear said it took immediate action. Spokesperson Keith Price said in a statement that the tire giant dropped Pacific 9 in 2015, within two weeksӔ of California labor commission decisions in favor of dozens of drivers.

The few others that issued statements said it was not their responsibility to police the shipping industry. Retailers don’t directly hire the truckers who move their goods at the pier. They generally hire large shipping or logistics firms that line up trucking companies through a maze of subcontractors.

“We’re not trying to wash our hands of this issue,” said John Taylor, a spokesman for LG Electronics, “but it’s frankly far afield and really very disconnected from LG Electronics.”

When asked about labor violations by trucking companies in Target’s supply chain, spokeswoman Erika Winkels wrote: “Target doesn’t have anything to share here.”

A Critical Change

For decades, short-haul truckers at the nations ports relied on cheap clunkers to move goods to nearby warehouses and rail yards.

With little up-front investment, drivers Җ most of them independent contractors who owned their own trucks could make a decent living squeezing the last miles from dilapidated big rigs that weren֒t suited for the open road.

In October 2008, that changed dramatically in southern California, home of the nations busiest ports, Los Angeles and Long Beach. State officials, fed up with deadly diesel fumes from 16,000 outdated trucks, ordered the entire fleet replaced with new, cleaner rigs.

Suddenly, this obscure but critical collection of trucking companies faced a $2.5 billion crossroads unlike anything experienced at other U.S. ports.

Instead of digging into their own pockets to undo the environmental mess they helped create, the companies found a way to push the cost onto individual drivers, who are paid by the number and kinds of containers they move, not by the hour.

There are 800 companies regularly operating at the LA ports. Almost all of them turned to some form of a lease-to-own model, some without thinking through the consequences, said industry consultant and lobbyist Alex Cherin.

ғFlying by the seat of their pants and making it up as they went along, he said of the scramble to find trucks for drivers. ԓUltimately what they were trying to do was survive in a business with very thin margins.

Truckers at dozens of companies describe the same basic scene. They were handed a lease-to-own contract by their employer and given a choice: Sign immediately or be fired. Many drivers who spoke little English said managers gave them no time to seek legal advice or even an interpreter to read the contract.

It was “take it or leave it,” according to Fidel Vasquez, a driver for Total Transportation who said he couldnԒt read the contract because it was in English.

Jose Juan Rodriguez owned his own truck and drove primarily for Morgan Southern, where two dozen drivers have filed claims for back pay at the California labor commission and civil court. Like many drivers, Rodriguez said he didnt understand what he was signing, but felt he had no choice.

His wife has stage three breast cancer and his adult son has severe brain damage requiring frequent doctor visits.

ғWhere do I sign? Rodriguez recalled asking right away. ԓThe only thing I had to worry about is work, because I have a family.

One-sided contracts

The contracts work like sub-leases. Knowing drivers could not qualify for their own loans or leases, trucking companies arranged to finance their fleets. Then they had drivers sign up for individual trucks.

Drivers gave their old trucks Ԗ many of which they owned outright to their company as a down payment. And just like that they were up to $100,000 in debt to their own employer. The same guys would have had a tough time qualifying for a Hyundai days earlier.

As far back as August 2008, a trucking finance firm warned Port of Long Beach board members that 40% of drivers were likely to default on truck leases. But no one stopped the deals, which place almost all of the financial risk onto the workers.

Drivers’ names were not on the truck titles. And many contracts effectively barred drivers from using their truck to work for other companies.

The companies also retained the power to decide how much work to give their drivers. They decide who gets the easiest and most lucrative routes—and who gets to work at all.

That leaves drivers in constant fear of upsetting managers, who can fire them for any reason, or simply stop sending them business, a process some call ֓starving them out of the truck.

On a five-year lease, drivers could pay in for four years and 11 months. If they got sick, fell behind on the lease or were fired in the last month, they could lose everything - as if they had never paid a dime.

 image: labor contract

The truck was never his,"” one California labor commission hearing officer noted in a March, 2014 ruling. And he has nothing to show for all the time and money he spent.”

Its a lesson Leocadio Lopez learned the hard way.

A former house painter and father of two, Lopez lost all his money after pouring his savings into a truck at Total Transportation Services, where more than 80 drivers have said they were cheated out of fair pay or charged for equipment their employer should have covered.

Lopez had to borrow cash just to keep up with his bills. Christmas and birthdays came and went without gifts for his children. His family had to get groceries from food pantries.

After making payments for six years, about $700 a week for the lease and maintenance, he lost the truck and the tens of thousands of dollars he had scraped together to keep it.

:I cried,” Lopez told reporters, still incensed. “They do what they want and you cant do anything.”

Lopez was one of dozens of drivers who filed claims against Total Transportation between 2013 and 2014. Most of the men were pulled into a conference room one week by company president Vic La Rosa and fired, according to 24 sworn complaints filed with the NLRB.

“There are no rules,” one driver recalled La Rosa saying when he took the trucks. “No law or politicians will help you.”

La Rosa denied committing labor violations and said the sworn statements made by his former drivers are false.

Tha’s not the way it went down, he told reporters, declining to elaborate.

Without admitting guilt, La Rosa settled the driverse cases with the NLRB, paying $200,000 in fines and agreeing to rehire some of them as employees.

Working for free

For years, Rene Flores regularly has driven 20 hours a day, six days a week, hauling pistachios and medical equipment into the desert from the Port of Long Beach.

“If I don’t work,” Flores says, “my kids will starve.”

He keeps a log book of fake hours in the glovebox and the real one hidden beneath his seat in case of a surprise inspection.

Flores rarely sees his two sons, because he spends his one day off trying to catch up on lost sleep.

“Of course they know,” he told reporters when asked if his managers realize how much he works. “But the company doesn’t care.”

Morgan Southern did not answer questions about drivers’ claims. But spokesperson Robert Milane said in a statement, “We follow all DOT regulations and guidelines with respect to HOS (hours of service) and logs.”

Drivers who signed up for leases watched their take-home pay plummet and often had no choice but to work longer hours.

After emigrating from Nicaragua in 1992, Samuel Talavera Jr. drove a truck at the Los Angeles harbor and made an honest living. Since 9/11, all truckers working at ports of entry must be legal residents.

Talavera bought his wife, Reyna, a house and took his daughters to Disneyland.

But everything changed in late 2010, when he went into the QTS warehouse and his boss told him he needed to trade in his truck and sign a lease-purchase contract.

For the next four years, he worked mind-numbing hours to pay the bills.

To save commuting time, he slept in his truck at work. To avoid bathroom breaks, he kept an empty two-liter bottle by his side. He became a ghost to his family.

Still, he had to drain his savings to survive.

A stack of weekly paychecks he keeps in a drawer at home shows his worst weeks. He grossed $1,970 on June 3, 2011, but it all went back to QTS. After the lease and other truck expenses, he took home $33.

On February 10, 2012, he took home $112 after expenses.

The next week, he made 67 cents.

Reyna got two office cleaning jobs and a third taking care of the elderly to try to make ends meet. Even so, when her father died, she couldnt afford to fly home for the funeral.

Talavera was working so much, she said. “We didn’t understand why there was hardly any money left over.”

Through interviews and court records, reporters catalogued more than 120 drivers who say they regularly worked past exhaustion, 12 to 20 hours straight behind the wheel.

Federal law prohibits commercial truckers from driving more than 11 hours at a time, and they cant work at all after 14 hours, until they have had 10 hours of rest. Government studies show that for every hour past 11 that someone drives, the chances of crashing increase exponentially.

Many drivers feel they have no choice but to take that risk.

On bad weeks - when Flores hits traffic or gets assigned a low-paying delivery - he says he takes home $300 or less for 100 hours of work. That translates into $3 an hour, less than a third of what he could make washing dishes at California’s minimum wage.

Drivers could quit and find new work. But many, like Flores, say they’ve stayed on hoping things would improve. Then they realized if they quit, they would lose thousands paid toward their truck. “They’re captive,” Teamsters international vice president Fred Potter said.

Truck payments can cut so deep into wages that drivers actually owe their employer come Friday.

“Working for free,” one driver called it in a court statement.

Paychecks read instead like weekly invoices: Faustino Denova, negative $9.64. Germen Merino, negative $92.50. Jose Covarrubias, negative $280.

For some truckers, the debt stacked up week after week, until they borrowed against their house or from friends, used their savings to pay it off or until their company fired them.

“The company didn’t care whether I took a gallon of milk to my home or not,” one driver testified in a civil court case. “The company would take everything. “

Enough weeks like that put truckers into a hole they can’t escape.

Like many drivers, Talavera and his wife fell behind on their mortgage, and then stopped paying it altogether. They filed for bankruptcy to save their home.

James Kang, former president of the now-defunct QTS, declined to comment and then hung up on a reporter.

We are not human

In ways that happen in virtually no other workplace in America, port trucking companies in Southern California wield enormous power over their workers.

Through interviews and a review of sworn statements, the USA TODAY Network identified more than 100 drivers who reported threats and retaliation. Managers punish drivers most often for turning down the lowest-paying routes, missing work or refusing to work past federal hour limits.

At least 24 companies have fired drivers outright under those circumstances, according to interviews and a review of court, NLRB and California labor commission records. In each case, the driver lost his truck and what hed paid into it.

Arcadio Amaya said he refused to work 15 hours straight one night at Pacgran Inc. and was fired the next day. He lost $26,400 he had paid toward a truck.

Armando Logamo, a former driver at RPM Harbor Services, said he saw other drivers bribing dispatchers for better-paying assignments, so he told his supervisor. The next week, Logamo was fired. He lost the truck, along with all the payments he had put into it.

ғThey fired me because I was one of the ones that was speaking up, he said. ԓIt was pretty devastating because I was with them for two plus years.

Eddy Gonzalez once missed a day when he was called to court to testify as a witness. As punishment, he said his boss at Seacon Logix didn’t let him work the next day.

Then, a few months later, he missed a week to bury his dead mother. When Gonzalez came back, he said, his boss cleaned out his truck and fired him on the spot while he pleaded to keep his job.

“He just took the keys and left,” Gonzalez testified in court.

Representatives from all three companies denied their drivers’ accounts.

It’s all f---ing bulls---, said Edwin Merino, a former operations manager at Pacgran, which has since gone out of business. Merino said Amaya wasnԒt fired. He said he quit because he had fallen so far behind on truck payments that he wasnt making money when he worked.

Drivers say they are always one wrong step away from the street. Companies dangle that threat Җ on pain of ӑdiscipline or termination,Ҕ as one judge put it in a labor case ruling to force drivers to work around the clock.

Some companies have physically barred their workers from going home at night.

Eduardo Garcia, 57, remembers pulling into the Tradelink Transport truck yard exhausted after almost 15 hours behind the wheel one night in October 2010.

He was ready to go home to his family, but as he approached the Tradelink parking lot, he realized his day wasn֒t over.

His said his boss was standing at the gate again, waving drivers back to the docks and refusing to let them into the spaces where they were required to park for the night.

“If you say no, Garcia said, then the next day, don’t come in. No work for you So he went back to the docks.

Drivers at two other companies tell similar stories. They said it would happen regularly, especially if their employer was on the verge of missing a shipping deadline.

Jovanni Castillo said he worked every waking hour, six days a week, at Imperial CFS. If he was not driving 20 hours a day—from 7 a.m. to 3 the next morning—his company fined him $200, he said.

“We are not human,” Garcia told reporters inside his small, cluttered house tucked behind an alley in Los Angeles. “We are machines for making money for these people.”

Rigoberto Cea, president of Tradelink, said hed go into the parking lot, but only to encourage drivers to keep working. “We would go out there and ask and beg,” he said in an interview. “Their interpretation was that they were slaves to us.”

An attorney for Imperial CFS denied the violations, saying the company has never punished its drivers. Imperial CFS, like many of the trucking companies, appealed labor commission rulings to civil court and later settled with drivers without admitting guilt.

At Pacific 9, 20 drivers testified at the California labor commission that they had to work up to 19 hours a day, violating federal fatigue laws for truckers.

They said dispatchers ordered them to doctor their driving logs every Friday to hide the overtime from regulators.

“We were told to write12 hours on the log sheet,” former driver David Figueroa testified in a 2015 labor commission case. “They said they would withhold our checks.”

The California labor commission has ruled that 40 Pacific 9 drivers were inaccurately classified as independent contractors. They were awarded a combined $6.8 million for lost wages. Judges did not rule on whether specific allegations of mistreatment actually occurred, but factored that testimony into the decision to rule them employees.

Alan Ta, the company’s chief operating officer, denied the drivers accounts.

ԒWe could never have functioned if our drivers were put through that environment, Ta said. ӔI mean who can physically even do that?

But the USA TODAY Network found evidence suggesting California port truckers, including many at Pacific 9, regularly worked too many hours.

Using Californias open records law, reporters obtained a port authority database that records the exact time a truck enters or exits the gate at the ports of Long Beach and Los Angeles.

From 2013 through 2016, trucks passed through the gates 23 million times, leaving a trail of which truck was on the road, when and where. The USA TODAY Network identified hundreds of thousands of instances where a truck was in operation for at least 14 hours without the required 10-hour break.

Not all of these instances are violations because two drivers might divide time behind the wheel of a single truck. But many companies ban that practice.

Pacific 9 is one of them. At least 7,500 times over three years, Pacific 9 trucks were on the clock for more than the 14 hour maximum, the port data shows. Almost all of the company’s 160 trucks exceeded the time limit at least once.

One Pacific 9 truck regularly operated through the night, more than 100 hours a week. Another went 35 hours without the proper break almost once a week for three years, according to the data.

When reporters shared the data with Ta, the executive said he couldn’t explain those circumstances and stopped responding to interview requests.

The role of retail

The scale of what comes through the ports of Los Angeles and Long Beach each year is hard to imagine.

If you laid the containers end to end, they would wrap around the Earth more than twice.

Most car parts manufactured across the Pacific come through Southern California. Same with electronics from China, Thailand or Indonesia. If youӒve bought anything from Walmart, Amazon, JCPenney, or any other store at the mall, theres a good chance it started its trip across the U.S. with the port truckers around Los Angeles.

Using records from court hearings and labor cases and shipping log data provided by the trade research firm Panjiva, the USA TODAY Network identified the brands whose goods were moved by trucking companies with multiple violations. ItҒs not clear if the companies hired them directly. But retailers often dont, relying instead on shipping and logistics companies to arrange trucking services from U.S. ports.

Hewlett-Packard, Costco and Hasbro have moved containers through Pacific 9. Fargo Trucking, with 45 violations, has moved Bissell vacuum cleaners, UPS packages and Nautica apparel.

Steve Madden shoes and Neiman Marcus have used Imperial CFS, which has lost seven labor cases to date.

None of those retailers would comment for this story.

JCPenney spokesperson Daphne Avila said in an email that the company Ғrelies on its third-party transportation vendors to comply with all applicable laws and regulations.

JCPenney, which once hailed the lease purchase program as Ӕinnovative and cost-effective” in a press release, has moved shipments through Pacer Cartage, part of a family of XPO Logistics companies accused by at least 140 drivers of labor violations in both civil court and the California labor commission.

John Taylor, a spokesman for LG Electronics, said the company hires steamship lines that provide door-to-doorӓ shipping services, so it is not involved in hiring or managing trucking companies. LG believes our responsibility starts when the goods arrive in our own warehouses,ԓ Taylor said in an email.

Driver contracts and shipping records show that Total Transportation Services and QTS, two of the most heavily cited companies in the harbor, have moved containers with LG goods.

Public pressure and new laws in recent years have forced retailers to monitor their international supply chains.

Target, for instance, takes a strong stance against forced labor in the cotton factories of Uzbekistan. It says it sends auditors to screen the companies that turn cotton into t-shirts sold in its stores.

The retailer promises to drop any vendor found exploiting workers with debt, according to its corporate responsibility policy. It wont use companies that punish workers Ԓphysically or mentally. It orders a 60-hour maximum on work weeks, with fair wages and benefits.

But Target has ignored the labor commission rulings in California and continued to allow companies found to have violated workersӔ rights to move its goods. Company spokesperson Erika Winkles declined to comment.

Jeffrey Klink, a former fraud prosecutor and corporate ethics professor at the University of Pittsburghs Graduate School of Business, said it’s easy for retailers to dodge accountability because they can argue they dont directly hire port trucking companies.

“This is a classic case where the little guy gets screwed,” he said.

Put another way: “Nobody cares about us,” said trucker Gustavo Villa, “because we are living in the dark.”


Posted by Elvis on 06/18/17 •
Section Dying America • Section Workplace
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