WASHINGTON, D.C., Nov. 14, 2012—As the latest victory in a year-long fight by the National Guestworker Alliance (NGA) against supply chain labor abuse, warehouse operator Exel Logistics agreed with the Department of Labor (DOL) on Wednesday to new worker protections for Exel’s more than 300 U.S. warehouses.
Exel, which has $4.1 billion in annual revenue, operates warehouses for major U.S. retailers including Wal-Mart and Hershey’s. Wal-Mart is facing growing pressure and nationwide strikes over supply chain labor abuses as Black Friday approaches.
The DOL agreement came in response to a strike and legal complaints by the NGA over serious labor abuses in a Hershey’s Chocolate packing plant in summer 2011. In previous response to the NGA complaints, the U.S. State Department debarred Hershey’s labor recruiter CETUSA from the J-1 Summer Work Travel program, and overhauled J-1 program rules to add substantial protections for student guestworkers.
The new DOL agreement requires Exel, staffing agency SHS, and labor recruiter CETUSA to pay back $213,000 in illegal deductions from wages to student guestworkers who worked in the Hershey’s plant. It also requires Exel to pay $143,000 in fines for health and safety violations.
Exel additionally agreed to new protections for the tens of thousands of workers at its more than 300 warehouses, including:
- Taking responsibility for all subcontractors and temporary staffing agencies on its supply chain;
- Prohibiting misclassification of workers as independent contractors;
- Ending incentive programs that block worker complaints, where managers get a raise if there are no safety reports; and
- Protecting minimum wage from illegal deductions.
“The Department of Labor is forcing Exel to take direct responsibility for tens of thousands of workers currently trapped under layers of subcontracting and hidden behind misclassification schemes,” said Saket Soni. “Companies like Walmart and Exel have to be held responsible for transforming good, permanent jobs into subcontracted, dangerous, subminimum-wage jobs.”
Student guestworkers joined the NGA and went on strike from the Hershey’s plant in August 2011. Students revealed brutal working conditions and forced wage deductions that left them earning as little as $1/hour. Hershey’s chocolate packing jobs had previously been filled by union workers earning a living wage, before the company used a chain of subcontractors—including Exel, SHS, and CETUSA—to replace them with cheap, exploitable student guestworkers.
In recent weeks, members of Warehouse Workers United have gone on strike over brutal conditions at Wal-Mart contracted warehouses in California and Illinois. More workers walked off the job Wednesday to protest retaliation against workers who spoke up.
“Wal-mart and other multinationals who use Exel need to sit down with the NGA and our partners and agree to industry standards to protect workers across the supply chain,” Soni said.
NGA Legal Director Jennifer J. Rosenbaum said: “The student guestworkers’ strike at Hershey’s exposed how employers like Hershey and Walmart use subcontracting, outsourcing, and temporary staffing agencies to undercut basic minimum wage and health and safety standards. The Department of Labor is sending a strong message that employers are responsible for wage theft and health and safety violations on their supply chain.”
The former student guestworkers who exposed abuses at the Hershey’s plant celebrated the DOL’s action as a major victory.
“I feel deeply inspired today, because our strike has had the incredible result of exposing and addressing the fundamental problems facing so many workers,” said Chen Wen, a student and NGA strike leader from China. “This makes us feel even prouder of what we did.”
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