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Workers Claim C&S Wholesale Grocers Cheats its Warehouse Workers out of Millions in Weekly Wages

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Case ID: 4746 | Employment | 04/06/2006

According to four employees, C&S Wholesale Grocers, Inc., the nation's 8th largest privately held corporation, routinely cheats thousands of its piece-rate warehouse workers out of millions of dollars in weekly wages. The four employees filed a nationwide class action in U.S. District Court for the Southern District of New York. The workers seek $750 million from C&S in unpaid wages and overtime under the Federal Fair Labor Standards Act and state labor laws in each of the 14 states where the company operates warehouses. The case applies to workers who have been employed by C & S since 2000.

The lawsuit details how C&S, the second-largest wholesale grocery store supplier in the U.S., violates federal and state laws by illegally chopping workers' wages as punishment for mistakes on the job; failing to pay overtime; failing to pay for time worked in excess of 10 hours; failing to pay employees their agreed hourly rates; and encouraging employees to work off-the-clock and through lunch without pay.

"To make matters worse," explains the lead attorney for the workers, "C&S punishes an entire team of workers for one person's mistake. C&S employees work in 4-8 member 'selection' teams. If one team member makes an error, for example selecting a case of apple juice instead of grape juice, C&S collectively punishes everyone on that team and cuts their pay."

"Collective punishment echoes the employment practices of a labor camp, and there's no place for these kinds of tactics in 21st Century America" adds one lawyer from the legal team representing the employees.

Although C&S not quite a household name, most Americans are well familiar with the large supermarket chains that C&S supplies with grocery and freezer products, including A&P, Pathmark, Shaw's, Safeway, Big Y, Foodtown, Giant, Grand Union, Super Stop & Shop and BJ's Warehouse Club. According to the company's website, C&S has more than 20,000 employees and operates over 50 warehouses in New York, New Jersey, Connecticut, Pennsylvania, Massachusetts, New Hampshire, Vermont, Ohio, Maryland, South Carolina, Tennessee, Alabama, California and Hawaii. The warehouses have storage capacity in excess of 15 million square feet.

"C&S is punishing its low-income workers at the same time the company is projecting record revenues of $18 billion this year," said the co-lead counsel in the case. "Meanwhile, the hard-working employee making those profits possible has little choice but to keep quiet about the company's sweatshop practices or lose his job."

The plaintiffs' legal team notes that although C&S makes its employees carry ID cards announcing that its warehouses are staffed by "Braggingly Happy Team Members," quite the opposite is true. "C&S warehouse team members go to work not knowing how much they will earn because of hourly wage deductions that occur at the whim of supervisors," said one of the co-lead attorneys. "Such underhanded labor tactics are not exactly a recipe for worker satisfaction," adds one of the attorneys for the employees. "The only team bragging about 'happiness' is management, which is boosting profits on the backs of its illegally-underpaid workforce."

Community advocate Javier Andrade, who has been active in Orange County, NY where these four plaintiffs work, observes that minority employees, who comprise the bulk of the company's workforce, bear the brunt of C&S' unfair and rampant labor practices. "C&S and other big companies like it need a loud wake-up call," suggests Mr. Andrade. "C&S makes large profits exploiting its warehouse workers, most of whom are Latino and African American. This lawsuit sends a message that C&S can't get away with business as usual, and can't trample on the rights of its employees."

The four New York plaintiffs, Armando Hernandez, Michael Wands, Michael Rodrigues and Joseph Alvarez, seek class certification for all C&S "piece-rate incentive warehouse employees" under Rule 23 of the Federal Rules of Civil Procedure and similar laws in each of the 14 states where C&S warehouses are located.

The grocery supplier boasts on its website that the "quality bonus" it pays workers instills high morale on the warehouse floor. According to plaintiff Michael Wands, however, the only "bonuses" the company hands out are on the order of a company mug or key chain.

"A $3 carnival trinket is not exactly your typical morale booster," remarks one lawyer for the employees. "Unless this case is certified as a class action," he adds, "this grocery behemoth will continue its unlawful labor practices with impunity. Unfortunately, that would help C&S fill its coffers even more at the expense of workers."

On the current company website, C&S touts its piece-rate incentive program as a "huge success," crowing that within six months of the program's implementation the company increased total volume shipped by 35%, while decreasing labor costs by more than 20%. But it is precisely the company's illegal wage-cutting, explains Mr. Andrade, that led to the lower labor costs.

The suit maintains that C&S owes thousands of dollars to each plaintiff and the other class members -- which include the company's warehouse selectors, lift operators, backhaulers and slot cleaners. In addition to back pay and overtime compensation, the class action asks for punitive damages, prejudgment interest, attorney's fees, costs and other restitution.

The lawsuit is open to any current or former employee of C&S whose paychecks were not properly calculated to include overtime pay.


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