Skechers USA is under fire after a new report detailed abusive labor practices in the Manhattan Beach-based company’s supply chain involving two of its primary contractors.
Released by the Los Angeles Alliance for New Economy (LAANE) on June 25, the report titled “Out of Step: Skechers hires sweatshop labor to deliver its shoes” details exploitation, wage theft, labor law violations and unsafe working conditions at Green Fleets Systems, a Long Beach-based port trucking company, and Olivet International, a Mira Loma-based luggage producer and warehouse contractor.
The report’s findings are based on public records research and extensive interviews with current and former workers.
Under complaints made by the National Labor Relations Board, both companies will come before an administrative judge in August under allegations including retaliation against employees involved in labor union activity.
According to LAANE, Green Fleets truck drivers deliver 40 truckloads of Skechers products daily from the Los Angeles ports to Skechers’ distribution center in Moreno Valley. Of its 125 truck drivers, more than 25 percent of them are misclassified as contractors, the report says, robbing them of proper pay, overtime and health benefits.
Green Fleets pays employee drivers $35,000 a year on average. Independent contractors make an average salary of $28,800 and are required to pay for all truck-related expenses including fuel, maintenance and repair costs, accounting for nearly 40 percent of their pay.
Mateo Mares (far left) and his family. Courtesy of Mateo Mares
Mateo Mares, a 50-year-old Compton resident from Jalisco, Mexico, was among Green Fleet’s 35 illegally misclassified employees for over five years until this past January, when the company fired him and a coworker for not withdrawing their claims to the state Division of Labor Standards Enforcement (DLSE). Prior to his termination, Mares delivered shipping containers to Skechers’ Moreno Valley warehouse every day, he said.
His case was scheduled for Monday at the labor commissions office in Long Beach but has been indefinitely postponed. He hopes to be instated as a company employee and “be respected at (his) job.”
“My life has been stressful,” Mares told Easy Reader through a translator. “I have a wife and three kids. I want to go back (to Green Fleets) because I like the work that I do, but I’d like to see an improvement in my working conditions and get a union contract. I want to see the victory. I want to see the change in the company.”
Like Mares, nine other misclassified drivers have filed wage and hour claims with the DLSE to seek reimbursement of paycheck deductions. In early 2013, the DLSE ruled on four of the claims and determined the drivers had been illegally misclassified, ordering Green Fleet to pay $280,800 in wages and penalty. If the remaining misclassified employees file a claim, the company could face an additional liability of $4.8 million.
At both companies, misclassification and retaliation against employees who assert their rights is common, according to the report. At Olivet International, some 230 employees, mostly Latino, are responsible for packaging and dispatching Skechers’ luggage merchandise. The report found that many are still earning minimum wage with no benefits after working several years and are misclassified as part-time employees.
Basic working conditions at the warehouse are “way beyond what’s acceptable,” said the report’s author Sheheryar Kaoosji, director of the Clean and Safe Ports Campaign at LAANE. These conditions include blocked safety exits, forklifts with problematic brakes and excessive work hours with no breaks, often in extreme heat (in the summer, temperatures can reach 125 degrees).
Skechers and Green Fleet did not return Easy Reader’s requests for comment. Olivet International declined to comment.
LAANE, backed by over 25,000 supporters who have signed online petitions, is demanding that Skechers, whose revenues last year totaled $1.8 billion, stop hiding behind contractors to profit off the exploitation of a mostly immigrants workforce that transports, produces and handles Skechers merchandise.
“(Skechers) has been made aware of what’s going on,” Kaoosji said. “The question is what are they gonna do about it?”