Privatization Leads to Fraud, Mismanagement, and Employee Abuse at Wackenhut

The three words that best describe the private security business these days are “racism”, “corruption”, and “profits”. Wackenhut, the largest private security provider to the Federal govt and the military outside of Iraq, would appear to be awash in all three.

Wackenhut, which has ties to the GOP and the Bush Administration that go almost as deep as Halliburton’s, is currently under investigation:

  • in Alaska by the GAO for “inadequate training and incomplete background checks that led to employment of officers with criminal records”, “poor” record-keeping that included falsified training records, and a near-total lack of any kind of monitoring or oversight on the program, as well as for illegally obtaining security contracts that were supposed to go to minority businesses;
  • in Miami (scroll to bottom) by Dade County for fraud – overbilling, billing for services not provided, falsifying records of guards’ hours, and violations of labor laws for working guards in some cases 20 hrs/day, 7 days/week;
  • by the Homeland Security Committee for “problems at Wackenhut-guarded facilities nationwide that lead to high employee turnover, low morale and ineffective security” at US nuclear sites;
  • by the House Govt Reform Committee “to examine charges of racism, discrimination and poor performance;
  • at a Tennessee Army ammunition plant where inspectors found holes in the perimeter fences, and where “two teenage runaways were found wandering around the 6,000-acre property after getting dangerously close to explosives” after the number of guards had been cut “in response to higher gas prices”;
  • by the Nuclear Regulatory Commission for security violations “at Wackenhut-guarded Three Mile Island, Seabrook Station, St. Lucie, and Turkey Point nuclear power plants”;
  • and by the Dept of Energy for “shorting the protective force on combat training; excessive overtime; caught cheating during one security drill and involved in a near-friendly fire incident in another” at its Y-12 (Oak Ridge) nuclear weapons plant.

And that’s only a partial list of domestic investigations.

Continue reading

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Card-Check Bill Passes House

To no one’s surprise, the Employee Free Choice Act passed in the House yesterday.

The measure would represent one of the most significant revisions of federal labor law in 60 years. It is the top legislative priority of the labor movement, which represents a record low 12 percent of the workforce, compared with 35 percent in the 1950s. Major business lobbies have mobilized against it to a level not seen since the fight over Bush’s 2001 tax cuts, according to a Chamber of Commerce official. Yesterday’s 241 to 184 vote was largely along party lines, with 13 Republicans voting for the measure and two Democrats opposing it.

The real fight will come in the Senate where Republicans, representing the corporatocracy as always, have promised to filibuster to prevent its passage. Their primary argument for public purposes is that the EFCA would eliminate the secret ballot, “a cornerstone of democracy”. It’s by far the best argument they could make against the law even though it’s bogus. In what has become a standard GOP tactic, it makes them sound as if they’re protecting workers’ rights even as they vote to take them away.

The irony here is that if the Bush Administration, particularly its Labor and Justice Depts, were doing their jobs, which they’re not, this bill wouldn’t be necessary. Continue reading

Judge Allows Class-Action Suit for Unpaid Overtime

By Maura Dolan and Lisa Girion, LA Times Staff Writers

SAN FRANCISCO — In a closely watched labor law case, the California Supreme Court cleared the way Thursday for a class-action lawsuit brought by Sav-on Drug Stores workers who say they were misclassified as managers and improperly denied overtime.

The unanimous ruling overturned a lower-court decision that would have discouraged such suits.

Plaintiffs’ attorneys maintain that many workers — despite being given titles such as “store manager” or “team leader” — spend most of their day on non-managerial tasks such as stocking shelves or tending a cash register, rather than overseeing any aspect of the business.

Companies had hoped that the lower court’s position would slow a wave of overtime litigation that has swept the state in recent years, costing firms hundreds of millions of dollars in judgments and settlements. A broad swath of corporate California has been hit, including Farmers Insurance Group, Bank of America Corp., RadioShack Corp., Rite Aid Corp., Starbucks Corp., Taco Bell Corp. and United Parcel Service Inc.

As a result of the high-court ruling, experts said, California businesses can expect a renewed surge of class-action litigation seeking overtime pay.

“There are probably a fair number of these lawsuits waiting in the wings for the court to clarify what the standards are,” said Steven Katz, a Los Angeles lawyer who wrote a friend-of-the-court brief for other businesses in the Sav-on case. “Now that that has happened, I think we’re going to see those suits being filed.”

A spokeswoman for Sav-on, which has about 300 stores in California, declined to comment on the ruling. Rex S. Heinke, a Los Angeles attorney who represented the drugstore chain, said he couldn’t comment because the litigation was ongoing.

The California Supreme Court ruling came the same week that new federal overtime regulations took effect. Those rules, which are expected to reduce the amount of overtime paid to workers and reduce litigation, were opposed by organized labor and embraced by the business community.

The federal regulations, however, are expected to have little effect in California, which has its own labor laws.

Under the state statutes, workers who spend more than 50% of their time performing the duties of hourly workers, even if they’re called managers, are eligible for overtime pay. Eligible workers who put in more than eight hours a day on the job are supposed to be paid for the overtime at time-and-a-half — 1.5 times their usual hourly rate.

Under federal law followed in most other states, managers may be exempt from overtime pay if their primary duties are supervisory.

The state high court’s decision stemmed from a lawsuit brought by two Sav-on managers who contended that the chain misclassified its assistant managers and operating managers as exempt from the state’s overtime wage laws.

Lawyers in the case have estimated that 600 to 1,400 Sav-on workers may be entitled to back pay if the lawsuit succeeds.

(emphasis added by me)

Employers have tried to use this trick for decades. First, back in the late 60’s, they started giving executives titles in lieu of pay raises (up until then, titles always came with raises attched–you got the raise by earning the title). That worked so well that by the 70’s it had come down the food chain: secretaries started to be called ‘administrative assistants’, even ‘executive assistants’–but no raise. In the 80’s it got picked up by Wal-Mart who took it right to the bottom: grunts were now ‘associates’ and told they were ‘in charge’–of shirts, toiletries, cat food, whatever.

But it didn’t stop there, oh no. Manufacturers tried calling their line workers ‘independent contractors’, and instead of paying everybody at the same scale, they ‘negotiated contracts’, hiring the lowest bidders and pitting worker-against-worker. The ‘independent contractor’ scam had the added attraction that they didn’t have to do withholding or pay their share to the unemployment fund: ‘independent contractors’ were legally considered self-employed and thus responsible for their own unemployment payments. The Duke–Michael Dukakis was Gov then–put an end to that scam, thankfully, but it was just one in a long line of anti-labor tricks designed to push down wages and shove all their responsibilities onto their workers.

That’s why the new overtime rules are evil: it took years of lawsuits and investigations and fines to get corporations to quit playing these games on their employees; the Imperial Overtime Decree basically puts us all back to Square One, and we’re going to have to fight the same damn battles all over again.

Labor Dept Does Something–May Be a First

Elaine Chao’s tenure at Labor hasn’t exactly been known for its aggressive treatment of illegal corporate labor practices, despite the inconvenient fact that that’s what it was created to do, and as the head of it, that’s her job. She has usually supported whatever lame legal excuse or maneuver corporate attorneys came up with to justify their clients’ behaviour, and been exceedingly lax in enforcing labor laws; when she bothered to enforce them at all, it was normally because lawsuits or outside pressure forced her to. So we are only too happy to note that DoL investigators responded to information from a small watchdog group in LA and busted a Target contractor’s Wal-Mart-style treatment of its janitors: wages below minimum, a 7-days/wk work schedule, hiring 15 and 16-year-olds as full-time employees, 50 and 60-hr/wk work schedules without overtime, non-payment of taxes, particularly Social Security–you know the drill.

Labor Department Wins $1.9 Million in Back Pay for Janitors
By STEVEN GREENHOUSE

Published: NYT, August 26, 2004

The United States Department of Labor announced yesterday that it had reached a $1.9 million settlement with a contractor for the Target Corporation after finding that the contractor had not paid overtime to hundreds of immigrant janitors who often worked seven nights a week cleaning Target stores.

Several janitors said in interviews that the Target contractor was doing much the same as contractors for Wal-Mart had done before an immigration raid at Wal-Mart stores last October – making late-night janitors work nearly 365 days a year, without paying overtime or Social Security and other taxes.

The Labor Department announced its back-pay settlement with Global Building Services of Newhall, Calif., after a two-year investigation found that Global had not paid overtime to 775 immigrant janitors who cleaned Target stores in California, Arizona, Nevada, New Mexico and Texas.

The Labor Department was tipped off to the violations by a Los Angeles group, the Maintenance Cooperation Trust Fund, that monitors whether employers are breaking the law when they use janitors.

“We investigated 50 Target stores, and we saw that janitors were being paid in cash, a flat rate with no overtime, no payroll taxes, no workers comp,” said Lilia Garcia, the trust fund’s executive director. “It’s a cancer in the industry; too many of these big retailers are using problematic contractors.”

Ms. Garcia said her group found that a half dozen of the late-night cleaners were only 15 or 16 years old. She said Global Building Services fired them soon after the federal inquiry started largely because state law bars teenagers so young from working so late at night and so many hours a day or a week. California officials participated in the inquiry.

Last October, federal agents raided 60 Wal-Mart stores in 21 states to arrest 250 cleaners who they said were illegal immigrants. The immigrants were employed by various Wal-Mart contractors, and as at the Target stores, they usually worked seven nights a week and were paid in cash without receiving overtime.

Labor Department officials declined to say whether they were investigating Wal-Mart or its contractors, although Wal-Mart has acknowledged that a federal grand jury in Pennsylvania is investigating whether it illegally cooperated with its contractors to use illegal immigrants as cleaners. Lawyers in New York have filed a class- action lawsuit against Wal-Mart charging various labor violations on behalf of what they estimate are thousands of illegal immigrant janitors.

Felipe Aguilar, who said he cleaned at five Target stores in Southern California, said in a telephone interview: “In my three years there, they gave me very few days off. And when I came back after being out injured for two weeks, the company said, ‘We can’t take you back. Someone else is working in your place.’ ”

Mr. Aguilar said that he worked about 80 hours a week, from 10 p.m. to 8 a.m. daily, and was paid $525 or $625 every 15 days. That came to less than $4 an hour, well below the federal minimum wage of $5.15.

His wife, Claudia, who also worked at Target, said, “We felt bad about the pay; sometimes we felt rage, but we were scared to complain because we needed the job.”

In a statement, Global Building Services said that after these problems were brought to its attention in November 2002, it cooperated fully with the investigation and changed its pay practices.

“We are pleased that we were able to reach an agreement with the Department of Labor to compensate our employees,” Global said. “The company is fully compliant, and we look forward to serving the needs of our retail customers. We feel this is all behind us now.”

Uh-huh. How could Global Building Services not know that something on this scale was happening? Don’t they handle the paychecks? Didn’t they notice the discrepancies, the lack of withholding? If you believe GBS’ absurd statement, you probably also believe that Saddam was responsible for 9/11 and the Easter Bunny wears tennis shoes and delivers eggs doing an impression of Tom Jones singing ‘Delilah’.

And we must add that while we’re all in favor of the Labor Dept actually doing something it wasn’t forced to do, we must in fairness note that: a) a $2Mil settlement is peanuts to a company that’s handling Target’s janitorial services in 5 states–5 huge states–and is hardly going to prevent them doing the same thing again when nobody’s looking, so it is effectively little more than the standard wrist-slap; and b) the DoL has yet to charge Target for complicity. It was Target, after all, who hired GBS and then didn’t bother to supervise them.

Oh, I forgot–‘But we didn’t know!’ Yeah, right. Ever notice that if you spend 25 cents on paperclips that wasn’t authorized, there’s a note on your desk from the comptroller the next day? How is that Target can track every expenditure to the penny except what they’re paying a contractor? How come if a buyer overpays $2 for an item their job is in jeopardy, but if they’re paying a contractor $$$MILLIONS$$$ less than the minimum he should be paying his employees, this they don’t notice?

The simple fact is, if you cost them a buck they’ll be all over you like white-on-rice, but if you save them a buck, they don’t give a damn how you did it. Steal it, extort it, exploit it–they don’t know, they don’t care, and they’ll never ask any questions.

From an old Bob & Ray routine–Wally Ballou (Bob) is interviewing a paperclip manufacturer (Ray) about how he san sell his product so cheap (10 cents a gross):

Wally Ballou: But how can your employees survive on $1.15 a week?

Ray: Oh, we don’t delve into the personal lives of our employees. That would be a wanton invasion of their privacy.

Wally: But where do they live? You can’t rent a room for a dollar a week.

Ray: Well, I understand a lot of them live in caves in the hills outside town and forage for food. They make their clothes out of tree bark and I’ve noticed, myself personally, that they don’t wear shoes. I call it ‘self-reliance’.

That routine dates back to the 50’s. Nothing much has changed, it would seem.

Budget Impasse in CA Linked to Labor Law

We’ve written about some of the predatory practices of corporations toward their employees, and even though we’ve only scratched the surface so far–doctoring records in order to avoid paying workers for all the hours they worked; the threats, intimidation, even blackmail when workers try to unionize; the rising demand that we work part-time without pay, and so on (there’s a lot more)–it’s probably clear by now that too many employers can’t be trusted either to be fair to their employees or to obey the law.

Well, in California they passed a law that allows employers to be sued by workers diectly for violations and mistreatment. At least in part, it seems the budget battle is hung up over this law.

By Marc Lifsher, LA Times Staff Writer

SACRAMENTO — As the struggle to pass a state spending plan drags on, legislative leaders are trying to negotiate changes to a new labor law that Gov. Arnold Schwarzenegger and business groups have linked to the budget battle.

The governor claims that the law, which the California Chamber of Commerce derisively calls the “sue your boss” statute, has unleashed a torrent of frivolous litigation over alleged labor code violations. At the recent shopping center rally where the governor called Democrats blocking his proposed budget “girlie men,” he also denounced the law as a job killer that “chases businesses way from California.”

The law allows private lawyers to sue employers for labor law violations. Proponents say it addresses a need for increased enforcement of the state’s workplace regulations.

“Wage and hour disputes are serious allegations and, if proven, worthy of penalties being leveled against employers,” said state Sen. Joe Dunn (D-Santa Ana), the law’s author.

A survey of lawsuits filed since the law went into effect in January shows that many of the approximately 50 pending cases involve basic, lunch-bucket issues such as claims for back pay and overtime pay. One Los Angeles attorney has filed about 20 suits seeking back double-time pay for off-duty Los Angeles police officers who provided security on movie, video and commercial shoots.

“This legislation helps level the playing field,” said Alan Harris, a Los Angeles lawyer who has used the law to sue a number of major movie studios and their payroll service contractors. “In Hollywood, we’re dealing with multinational corporations that have limitless assets, and the employees have no one to stand up for them.”

Dunn said he was willing to fine-tune the law but stressed he “won’t even discuss a repeal or a de facto repeal.”

This year, Dunn introduced a follow-up bill to ban suits for “technical violations” such as small print on posters. His bill, which passed the Senate and is currently before the Assembly Appropriations Committee, would authorize judges to reduce or eliminate awards that are arbitrary or unfair.

“I don’t want to clog up the court system,” he said.

Republicans, so far, have rejected Dunn’s second bill. But that steadfast position may be beginning to ease. For the last two days, Dunn and Senate Minority Leader Dick Ackerman (R-Irvine) have been negotiating a possible middle ground that would be “reasonable for business” and still give workers protections for serious labor law violations, Ackerman said.

Schwarzenegger and his allies complain that the law, signed last year by then-Gov. Gray Davis, gives attorneys a license to sue deep-pocket companies for minor infractions of state labor regulations. As evidence, they point to a recent suit seeking six-figure damages from a company accused of using overly small type on posters listing workplace rules.

“It’s ludicrous. The penalties simply don’t fit the infractions,” said Jeanne Cain, senior vice president of the California Chamber of Commerce, which is leading the repeal fight.

Backers of the labor law, mainly labor unions, contend that years of budget cuts have hamstrung the state labor commissioner’s ability to protect workers’ rights. They stress that 75% of civil penalties collected by successful lawsuits would go into state coffers to finance general programs and additional labor enforcement activities.

“Our state does not have the resources to put into labor law enforcement that we used to have,” said Barry Broad, a lobbyist for the International Brotherhood of Teamsters.

I find the concept that business would be ‘chased away’ from CA by a requirement that they obey the law or face legal penalties in the form of lawsuits protecting workers’ rights to be telling. They want a pass on the responsibilities eveyone else has to follow the law on the basis of paranoia over frivolous litigation that will likely not go anywhere. The example they cite hasn’t even gotten to court yet, and if it’s as silly as it sounds (it may not be) it could well be thrown out; many–in fact, most–such cases are. And the ones that aren’t turn out to be a lot less frivolous than coporations and their allies try to make them seem.

You may remember the infamous case of the woman who sued McDonald’s because their coffee was too hot. Conservatives and corporate lobbyists used–and are still using–that case as a prime example of the kind of ‘frivolous lawsuit’ from which business needs protection. Oh, really?

The manager of that McD franchise had been warned repeatedly by inspectors that the coffee his stores were serving was overheated to the point of causing potential physical damage either to a customer or employee. The wornings were ignored. For over a year. The woman who brought the suit was so badly burned she had to be hospitalized, and needed three skin-graft operations to repair the damage to her legs.

That’s the nature of the ‘frivolous’ lawsuits they want protection from. If CA wants to take a step to protect workers’ rights and well-being, this law is a definite step in the right direction. If they let blatant scare-tactics from corporations seeking to evade their responsibilities deter them, they should be ahamed of themselves.

Why Does The Right Hate Workers?

NLRB Unrolls Assault on Labor Rights, a post by Nathan Newman I found via Seeing The Forest, highlights another anti-non-rich people decision by the right wing extremists. Cute part is, they even managed to drag in the War on Terra as an excuse for refusing to follow the plain meaning of the law. Rule of law my rancorous rear end.

If you also feel the need to read section 7 of the NLRA, you can find it, and the rest of the act, here.

Labor Law in Reality: A Personal Experience

Shortly after I graduated high school (and had gotten thrown out of my first college–UNH–after the first semester), I got married. Naturally, I needed a job. I found one in the warehouse at a company called Booth Fisheries that had just opened a plant in Portsmouth. The Home Office was in Brownsville, Texas, and they brought their Texas management style with them.

# The minimum number of breaks the law required were given and for the minimum amount of time–10 mins–even though most NE companies had moved to 15 or even 20 by then. These breaks were rigidly enforced, to the point where women who had to pee outside break-time weren’t allowed to leave the line long enough to go to the bathroom. This created health problems for a number of them.

# Workers were regularly stopped on their way out the door to go home and accused of stealing stock or equipment, not only without any proof that they had done it but without any proof that anything had been stolen. Some had to submit to personal searches of themselves and their clothes. No one was ever found to have stolen anything; the company considered that proof that the searches had stopped employee thieving even though nothing had been stolen to begin with, so they kept doing it despite employee protests.

# Managers had been told to yell at people without reason on the theory that intimidation would keep employees ‘on their toes’, and did so most of the day. The smallest infraction or mistake was enough to get you hauled ino the line manager’s office and yelled at so loud we could hear it over the machines. Two mistakes and they would cut your pay rate; three and you could be fired. Some were.

# ‘Orientation’ for new employees consisted largely of a video of lies about unions stealing from their members and a lecture on the general evils of unions.

# When the company was negotiating for the contract to provide McDonald’s with the patties for its fish sandwiches (a contract worth $$millions$$ to Booth), in order to prove that they could handle the size of the order they sped the line up so fast that none of the workers could keep up with it and the machines kept breaking down. Supervisors roamed the lines verbally abusing anyone who had trouble keeping up. One woman whose machine kept breaking down was accused of deliberately sabotaging it and slapped across the face by a manager. Another was fired because she dropped a box of fish sticks.

# Workers were often berated, sent home early without warning or kept late without choice as punishment for a mistake or talking back to a supervisor. If they balked, they were disciplined or even fired. One woman who was ordered to stay 3 hrs after her usual quitting time was fired when she insisted on leaving the line to call her husband to tell him–he was driving ten miles to pick her up.

As things went from bad to worse, anger began to build up. A couple of us began to say we needed the protection of a union, and when enough people agreed we called a representative of the Amalgamated Meat Cutters. We had several meetings at various employees’ homes, circulated a petition in secret, and when there were enough signatures, the AMC rep presented the petition to management and demanded a vote.

From that point on, things got nasty. The company found various pretexts to prevent union reps from talkimg to us on-site before the vote, sometimes by force. They identified the people they thought were behind getting the union and harrassed them–threatening phone calls in the middle of the night, black cars with burly men in them following us wherever we went, anonymous death threats by mail and hand-delivered. Some of us who were careless were even beaten when they could catch us alone. One guy suffered a broken arm and cracked ribs, and quit both the union effort and the company. Companies where spouses worked were called by Booth reps and told to stop their wives from working for the union or Booth would get them fired.

The union protested these actions to the State Labor Board, but the NHLB was composed of businessmen who hated unions and they did nothing. The threats and beatings were reported to the police, but they said that unless we–we–could prove that Booth was behind them, they couldn’t do anything. I said to one of them ‘Isn’t that your job?’ and he ordered me out of the station under threat of arrest for ‘disturbing the peace’.

The union reps did what they could to keep us calm but as the vote approached, the company switched tactics. The brass from Brownsville–the President, a few VP’s, a couple of corporate lawyers–arrived and took over. One-by-one we were each taken into the cafeteria and made to sit before a table full of glowering suits who demanded to know how we were going to vote. They said they had a right to do this. They didn’t. It’s illegal. But the low-income folks they’d concentrated on hiring didn’t know that.

We were asked what our complaints were and they were dutifully written down. They told us in detail the changes they planned to make to address those complaints; those promises were NOT written down and from what people said when they came out of the cafeteria, it seemed they had promised a lot of people a lot of different things. After the promises of improvements, the suits turned to threats. Run down the list in the previous post–they did or promised to do all of them, one after the other. Plus one that isn’t there: we had a lot of women working in that plant, so the suits told the married workers that if they voted for the union they’d see to it their husbands lost their jobs.

When I went in, they told me right off the bat that they had me tabbed as a ‘troublemaker’ and that whether the union won or lost, I was going to be fired as soon as the vote was over. Then they dismissed me. They didn’t ask me how I was going to vote. They didn’t care.

The threats and promises worked. The union was voted down, though not by much despite all the heavy-handed tactics; that meant that the union threat was still in the air. Within a month, all the ‘troublemakers’ were gone. They got rid of me by having a young supervisor hide behind a crate in the warehouse. When I passed by on my forklift, he jumped out from behind the crate and threw himself against the side of the fork lift claiming I had ‘run him down.’ He then fired me for ‘recklessness’.

I protested first to an unemployment inspector and then to the Labor Board. The inspector let me and my witnesses speak our piece, then found for the compoany without their having to say a word in their own defense. The NHLB was exactly the opposite: they listened to the company and upheld their action without letting either me or my witnesses say a word in defense.

The company, needless to say, kept none of its promises to improve conditions and they continued to deteriorate. Employment at the plant was like a revolving door–as one was going in, two were coming out. The company complained that it was constantly understaffed and couldn’t keep workers. A year or so later, they closed the plant because, as an executive explained to the local paper, ‘People in New Hampshire don’t want to work.’

I know the law gives us rights on paper, but where’s the reality?

It’s a good question. Paper law may favor the worker but practical law sides with the owners. When it comes to labor law–

In the halls of justice, the only justice is in the halls.–Lenny Bruce