Labor Ready

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Labor Ready is the largest temp agency specializing in general labor such as demolition, ditch digging, and warehouse work. Its founder, Glenn Welstad, wanted the company to become "the McDonald's of the temp industry."[1] It is the flagship brand of its parent company, TrueBlue Inc., which is the largest industrial staffing company in the U.S., serving around 130,000 customers per year.[2] TrueBlue is a public company, traded under TBI. TrueBlue also operates staffing services under the brands Spartan Staffing, CLP, PlaneTechs, and Centerline.[3]

In 2013, TrueBlue's revenues were $1.7 billion, up 20% from $1.4 billion in 2012.[4] TrueBlue had around 3,200 full-time employees and 375,000 temporary workers in 2013. It operates around 375 branches spread throughout all 50 U.S. states, Puerto Rico, and Canada.[3]

According to a 2014 report by the National Employment Law Project (NELP) and the National Staffing Workers Alliance (NSWA), the U.S. Department of Labor's Wage and Hour Division had found 293 wage and hour violations at TrueBlue companies since April 2008.[5]

History and Business Strategy

Labor Ready, Inc. was founded in 1989 by Glenn Welstad, who attempted to apply a fast food model to labor staffing with the goal of becoming "the McDonalds of the temp industry," in his own words.[1] While the company now promises to provide "meaningful work" and "a bridge to permanent, full-time employment" for its hundreds of thousands of temp workers,[3] Welstad admitted early on that turnover was part of the business model, according to Mother Jones: "We don't encourage them to stay here," company cofounder Glenn Welstad once admitted to a reporter. "If we paid them more money or if we provided them with benefits, they would have a tendency to stick around."[1]

Labor Ready became a public company in 1995. The company changed its name to TrueBlue in 2007, but continues to use the Labor Ready name for its general labor line.[3]

In its SEC filings, TrueBlue includes as "risk factors" to its business:

  • "Increased government regulation of the workplace or of the employer-employee relationship"
  • "Increases in the minimum wage"
  • The Affordable Care Act
  • Liability for "claims for personal injury, wage and hour violations, discrimination, harassment," and other claims. TrueBlue claims that it has "minimal control over our customers' workplace environments," while simultaneously claiming to "actively manage the safety of our temporary workers with our safety programs."

Somewhat ironically, the company also notes that "Outsourcing certain aspects of our business could result in disruption and increased costs."[3]

Replacing Middle-Class Manufacturing Jobs with Low-Wage Temp Work

As detailed by a 2014 report by the National Employment Law Project (NELP), one reason why manufacturing jobs in the US are now in the bottom half of all jobs in terms of pay is an increased reliance on temporary workers. According to NELP,

"About 14 percent of auto parts workers are employed by staffing agencies today. Wages for these workers are lower than for direct-hire parts workers. [...] Estimates based on U.S. Census Bureau data [...] indicate that auto parts workers placed by staffing agencies make, on average, 29 percent less than those employed directly by auto parts manufacturers."[6]

The report includes an example involving Manpower:

"Phillip Hicks explained to The Washington Post that his only option for a job at a Toyota plant in Georgetown, Kentucky was through the staffing agency Manpower, Inc. Manpower assured Hicks that he would be able to switch to Toyota payroll after a year or two, promising a doubling of his salary from $12.60 to $24.20 an hour and gaining benefits. But after four years, Hicks was still waiting for a permanent employee position, unable to afford health benefits for his family or take more than three days off per year without risking his job, because of a punitive leave policy that only applied to “temps."[6]

Flexibility for Customers, Unpredictability and Safety Risks for Workers

Labor Ready's appeal to client companies is not only that the staffing agency handles HR, training, worker's comp insurance, and makes it possible to avoid providing health insurance or vacation time. Labor Ready also provides "flexibility," meaning that workers can be hired for any length of time and can be let go for any reason, with no warning. "If you are unhappy with a Labor Ready worker "for any reason," the company will replace that worker free of charge. And temps quickly learn to neither expect, nor ask for, raises, health care, or job security of any sort," as Mother Jones reported.[1]

Another result of this "flexibility" is high worker turnover, which cofounder Glenn Walstad stated was part of his business strategy. Turnover poses a major challenge to unionization efforts. The AFL-CIO Building and Construction Trades Department had attempted to organize Labor Ready workers in the 1990s, but "workers were almost impossible to organize," Collette told Mother Jones. "They were angry, but didn't stick around. I've never seen a multinational company whose workforce turns over every 21 days."[1]

Required to Show Up at 7:30, But Only Paid at 8:00?

As at many temp firms, workers are often expected to arrive early in the day to wait for work to become available, and are not paid for time spent waiting or traveling to and from jobs. A Mother Jones reporter observed some Labor Ready workers being required to arrive at job sites half an hour early, but only being paid from the job's official start time. A spokesperson for the company initially told the reporter, "Our workers are owed money for every minute that they are asked to be on the jobsite. What you experienced is not prevalent because it's not acceptable," but later suggested that the situation might have been misinterpreted and stated that "we pay our workers for the work done."[1] Workers may also be required to return to the Labor Ready office at the end of the workday to be paid, but are not compensated for that travel time. The company has been accused of wage theft over such practices, which have also led to multiple lawsuits (see below).

Controversies and Legal Actions

Charging Workers for Their Own Pay

In 1998, Labor Ready founder Glenn Walstad and his son, Todd, patented an ATM to provide cash wages to their temp workers -- for a fee. In 2002, Mother Jones reported the fee as $1 plus any change, amounting to several percent of a typical daily wage. In 2000, Labor Ready's annual revenues from the cash machines were nearly $9 million, producing net profits of $5.2 million, or about half of the firm's profits for the year.[7] The practice led to lawsuits in multiple states alleging that the practice amounted to "illegally siphoning" workers' pay.[8][9] The company paid $250,000 in back wages in a 2006 settlement over the issue, according to the NELP/NSWA report.[5]

According to SEC filings, TrueBlue discontinued the cash machines in 2012,[3] replacing them with a new innovation: prepaid debit cards. TrueBlue works with Global Cash Card, which produces prepaid debit cards to be used for paying wages. In a February 2014 promotional video, Lisa Harris of TrueBlue stated that the company had already issued 115,000 cards "loaded" with $120,000,000.[10] In the video, Harris noted repeatedly that the use of reloadable prepaid cards meant that workers would not have to return to staffing offices at the end of the workday -- another practice that has been the subject of wage and hour lawsuits against the company.[11]

TrueBlue, like Global Cash Card, presents the debit cards as an "alternative" to check cashing outlets, which often charge high fees for cashing checks for those without bank accounts. Payroll cards have become increasingly common in low-wage industries in recent years, including at companies like Wal-Mart and McDonald's, sparking complaints about their relatively high cost to users, who are often charged fees for ATM use, balance statements, or even inactivity. The New York Times has noted that "For banks that are looking to recoup billions of dollars in lost income from a spate of recent limits on debit and credit card fees, issuing payroll cards can be lucrative — the products were largely untouched by recent financial regulations."[12] However, in September 2013, the Consumer Financial Protection Bureau issued a bulletin informing employers that the cards could not be the exclusive form of payment for workers, and that they were subject to certain regulations.[13]

At Least 5 Labor Ready Workers in Sanitation Died on the Job since 2010

As reported by Pro Publica, Mark Jefferson, a temp worker with Labor Ready in New Jersey, was assigned to a long shift collecting trash for Waste Management during a 2012 heat wave. Nine hours into the shift, Jefferson told the garbage truck's driver that he couldn't continue. The driver was given instructions by dispatch to throw water on Jefferson and finish the shift. But by then Jefferson had collapsed in convulsions. His body temperature was measured at over 106 degrees. Three days later, he died. Pro Publica found that Jefferson "was at least the fourth temp worker in 15 years to be killed while working for Waste Management, a company that over the years has been repeatedly warned by OSHA about its failure to train temp workers."[14]

Another Labor Ready worker at Waste Management in Pueblo, Colorado died in 2010, crushed between the garbage truck and a utility pole. An OSHA citation about the incident found "that Labor Ready had failed to ensure that its workers received proper training from WM," according to the NELP/NSWA report.[5] In 2011, Douglas E. Bell died on his first day as a sanitation worker in Harrisburg, Pennsylvania after falling from a truck. According to the NELP/NSWA report, "Labor Ready was aware that Bell had never worked as a trash collector on the rear of a truck before." Two other Labor Ready sanitation workers died in Florida in 2014.[5]

2012 Wage and Hour Suit over Uncompensated Waiting, No Breaks

In October 2012, a class action suit was filed by workers employed by Labor Ready Midwest and QPS Employment Group to staff Walmart stores in Illinois. The suit alleged that the companies "failed to follow federal minimum wage and overtime laws when they required temporary workers to appear early for work, stay late to complete work and work through lunches and breaks," according to the Chicago Sun-Times.[15]

2001 Wage and Hour Suit over Uncompensated Waiting, Travel

In 2001, construction workers in Oakland, California filed a class action suit against Labor Ready over complaints about its definition of "hours worked," arguing that these extra hours spent waiting and in transit should be paid.[16] According to one of the plaintiffs' legal firms, "The case was settled for monetary relief to the class and individual plaintiffs and an agreement was reached that required changes in Labor Ready’s dispatch, safety training, and glove charge practices."[17]

Labor Ready Compels Arbitration in 2000 Wage and Hour Suit

Labor Ready workers in West Virginia filed a class action suit against Labor Ready in 2000, alleging that the company's failure to pay for "call time, training time, travel time, [and] overtime" was a violation of wage and hour laws. In response, Labor Ready filed a motion to force the plaintiffs to arbitration. U.S. District Court Judge John Copenhaver ruled in favor of Labor Ready.[18] The practice of making workers sign binding arbitration agreements has been criticized for reducing workers' access to the courts and their choices in addressing labor issues.[19]

Charged $734,000 by Washington State for Misclassifying Workers

In March 2002, Washington state found that Labor Ready owed $734,000 to the state workers' comp system, in large part because it had misclassified construction laborers as grounds maintenance workers.[7]

Fines for Illegal Paycheck Deductions

According to Mother Jones in 2002, Labor Ready was repeatedly fined by the U.S. Department of Labor for making illegal deductions from workers' paychecks for things like drug tests and equipment required for jobs, which sometimes brought paychecks below minimum wage. In August 2001, New Hampshire fined Labor Ready $143,153 as a result of transit "fees" it charged workers.[7]

Lawsuits over Fees Charged for Workers' Pay

In 1999, the company was sued by workers in Georgia over fees charged by its ATMs, with workers claiming that the practice violated state laws banning the discounting of wages. Labor Ready's general counsel at the time, Ron Junck, told Businessweek that the suit was unfair, saying that the average $1.50 Labor Ready collected on each paycheck was "far less than what most cash-checking places charge."[20] The Georgia suit was followed by similar lawsuits filed in New York City and San Jose. The AFL-CIO joined in filing all three suits.[21]

The suit was put on hold by a judge in 2012. The judge's decision was not related to the merits of the case, but because he found the plaintiffs "had signed documents agreeing to settle disputes with the company through binding arbitration, not by going to court." The U.S. Supreme Court and the National Labor Relations Board have issued conflicting rulings on whether such arbitration agreements pre-empt workers' rights to collectively advocate for their interests.[22]

Influencing Politics

Federal Campaign Contributions

TrueBlue PAC reported $554,682 on political spending at the federal level between 2002 and 2012, and as of June had raised $95,143 and spent $64,623 in the 2014 election cycle. TrueBlue's contributions were concentrated on politicians in Washington state, where its headquarters is located, and slightly more was contributed to Democrats (55%) than to Republicans (45%). In U.S. House races, recipients of $2,000 or more from TrueBlue in 2014 included (as of June 2014):

  • Adam Smith (D-WA): $7,500
  • Dave Reichert (R-WA): $5,000
  • Cathy McMorris Rodgers (R-WA): $4,700
  • Derek Killmer (D-WA): $3,500
  • Steny H. Hoyer (D-MD): $2,500
  • Suzan DelBene (D-WA): $2,000
  • Jaime Herrera Beutler (R-WA): $2,000
  • Rick Larson (D-WA): $2,000

In U.S. Senate races, recipients of contributions from TrueBlue in 2014 were (as of June 2014):

  • Patty Murray (D-WA): $3,000
  • Kelly Ayotte (R-NH): $1,000
  • Mark Begich (D-AK): $1,000
  • Chris Coons (D-DE): $1,000
  • Jeff Flake (R-AZ): $1,000
  • Tim Scott (R-SC): $1,000
  • Pat Toomey (R-PA): $1,000[23]

According to data compiled by the Center for Responsive Politics, all donors of $200 or more to TrueBlue PAC in 2014 listed TrueBlue as their employer. A number of TrueBlue directors and senior staff made contributions to the PAC, including Joseph Sambataro ($1,000), James Defebaugh ($1,619), Kimberly Cannon ($1,547), and CEO Steven Cooper ($1,300).[24]

State Campaign Contributions

TrueBlue's various PACs spent $191,377 on state races between 2008 and 2014 (as of reports available in August). The bulk of TrueBlue's state spending has been in Washington state.[25] Top political committee recipients in that period were:[26]

  • No on I-1033 Committee ($20,000)
    • Opposed Washington Initiative 1033 in 2009,[27] a measure that would have tied state, county, and local tax increases to inflation and population increases, limited revenue collection.[28] It did not pass.[27]
  • Save Our Jobs WA ($10,000)
    • Supported Washington Initiative 1082 in 2010,[29] a measure that would have privatized the worker's compensation insurance program in Washington State. It did not pass.[30]
  • American Staffing Association PAC ($10,000)
  • Washington State Democratic Party ($5,250)
  • Washington State Republican Party ($4,599)

Top individual recipients in that period were:

  • Dave Reichert ($6,000)
  • Adam Smith ($5,500)
  • Robert M. McKenna ($5,200)
  • Jeff Flake ($5,000)
  • Cathy McMorris Rodgers ($5,000).[26]

Lobbying

TrueBlue spends several hundred thousand dollars per year lobbying at the federal level, working with the firm K&L Gates. As of August, True Blue had spent $140,00 lobbying in 2014. Its current issues include: Health; Labor, Antitrust, and Workplace; Taxes; and Immigration. 9 of TrueBlue's 11 federal lobbyists in 2014 had recently worked in government.[31]

  • 2010: $500,000
  • 2011: $370,000
  • 2012: $380,000
  • 2013: $290,000

TrueBlue has employed the firm K&L Gates in Washington State.[32][33]

Personnel

CEO, TrueBlue

TrueBlue CEO Steven C. Cooper

The President and CEO of TrueBlue is Steven C. Cooper, who has served as CEO since 2006 and as President since 2005. Cooper's former positions include Senior Consulting Manager at Arthur Andersen (from 1998-1999) and Senior Manager at Deloitte & Touche. Cooper's total compensation in 2013 was $2,437,545, including a $600,001 base salary and $1,448,860 in options.[34]

Senior Staff, TrueBlue

As of 2014:[35]

  • Kimberly Cannon, Executive Vice President, Human Resources - $749,855
  • Steven C. Cooper, Director, CEO, President - $2,437,545
  • James E. Defebaugh, Executive Vice President, General Counsel and Secretary - $773,106
  • Derrek L. Gafford, Executive Vice President and CFO - $969,759
  • Wayne Larkin, Executive Vice President of Branch Operations of TrueBlue and President of Labor Ready - $928,039
  • Billie R. Otto, Executive Vice President and CIO - not available

Board of Directors, TrueBlue

As of 2014:[35]
Compensation includes retainers, meeting fees, and equity grants.

  • Thomas E. McChesney - $179,993
  • Gates McKibbin - $182,493
  • Jeffrey B. Sakaguchi - $223,857
  • Joseph P. Sambataro, Jr. - $260,132
  • Bonnie W. Soodik - $223,857
  • William W. Steele - $296,496
  • Craig E. Tall - $235,102

External Resources on Temp Labor

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 Gabriel Thompson, "Everyone Only Wants Temps," Mother Jones, July 16, 2012. Accessed August 27, 2014.
  2. TrueBlue Inc, Homepage, organizational website, accessed August 27, 2014.
  3. 3.0 3.1 3.2 3.3 3.4 3.5 True Blue, Inc., 2013 Form 10-K, SEC filing, accessed August 27, 2014.
  4. Bloomberg Businessweek, TrueBlue Inc., company profile, accessed August 27, 2014.
  5. 5.0 5.1 5.2 5.3 Rebecca Smith and Claire McKenna, "Temped Out: How the Domestic Outsourcing of Blue-Collar Jobs Harms America's Workers," National Employment Law Project and National Staffing Workers Alliance, research report, September 2014. Accessed September 3, 2014.
  6. 6.0 6.1 Catherine Ruckelshaus and Sarah Leberstein, "Manufacturing Low Pay: Declining Wages in the Jobs That Built America’s Middle Class," National Employment Law Project, November 2014. Accessed January 5, 2014.
  7. 7.0 7.1 7.2 Christopher D. Cook, "Street Corner Incorporated, Mother Jones, March/April 2002, accessed August 27, 2014.
  8. Tricia Duryee, "Labor Ready sued in N.Y., San Jose," Seattle Times, October 4, 2000. Accessed August 27, 2014.
  9. "Labor Ready disputes lawsuit allegations," Puget Sound Business Journal, July 17, 2000. Accessed August 27, 2014.
  10. Global Cash Card, TrueBlue Case Study, corporate video, February 24, 2014. Accessed August 27, 2014.
  11. "A Temp Agency's Full-Time Legal Problems," Bloomberg Businessweek, March 19, 2001. Accessed August 27, 2014.
  12. Jessica Silver-Greenberg and Stephanie Clifford, "Paid via Card, Workers Feel Sting of Fees," New York Times, July 1, 2013. Accessed August 27, 2014.
  13. Consumer Financial Protection Bureau, "CFPB Bulletin Warns Employers Against Exclusive Use of Payroll Cards," government press release, September 12, 2013. Accessed August 27, 2014.
  14. Michael Grabell, Olga Pierce and Jeff Larson, "Temporary Work, Lasting Harm," Pro Publica, December 18, 2013. Accessed September 2, 2014.
  15. Allison Horton and Michael Lansu, "Temp workers file class-action lawsuit against Wal-Mart over wages," Chicago Sun-Times, October 22, 2012. Accessed September 3, 2014.
  16. Labor Ready Class Notice, Class Action Notice, Goldstein, Demchak, Baller, Borgen & Dardarian, February 23, 2003. Accessed August 27, 2014.
  17. Goldstein, Bergen, Dardarian, and Ho, "Ramirez v. Labor Ready," case description, accessed September 17, 2014.
  18. Adkins v. Labor Ready, case NO. CIV.A.2:00-0884., United States District Court, S.D. West Virginia, at Charleston. September 28, 2001. Accessed September 3, 2014.
  19. Stephanie Mencimer, "Have You Signed Away Your Right to Sue?, Mother Jones, March 2008. Accessed September 3, 2014.
  20. Robin J. Phillips and Taeyma Sapp, "A Day's Pay for a Day's Work?," Businessweek, August 7, 2000. Accessed August 27, 2014.
  21. Tricia Duryee, "Labor Ready sued in N.Y., San Jose," Seattle Times, October 4, 2000. Accessed August 27, 2014.
  22. Janell Ross, "Workers' Right To Sue Employers Over Pay, Other Conditions In Flux," Huffington Post, January 18, 2012. Accessed August 27, 2014.
  23. Center for Responsive Politics, TrueBlue PAC, recipients, accessed August 27, 2014.
  24. Center for Responsive Politics, TrueBlue PAC, donors, accessed August 27, 2014.
  25. National Institute on Money in State Politics, [{3|gro=y,d-ad-st TrueBlue PACs, Follow the Money Database, accessed August 27, 2014.
  26. 26.0 26.1 National Institute on Money in State Politics, TrueBlue PACs, Follow the Money Database, accessed August 27, 2014.
  27. 27.0 27.1 National Institute on Money in State Politics [No on I-1033], Follow the Money database, PAC report, accessed September 16, 2014.
  28. Washington Secretary of State, Initiative 1033, text of proposed initiative, filed January 9, 2009. Accessed September 16, 2014.
  29. National Institute on Money in State Politics [Save Our Jobs], Follow the Money database, PAC report, accessed September 16, 2014.
  30. "Initiative to privatize workers' comp rejected," Seattle Times, November 2, 2010. Accessed September 16, 2014.
  31. Center for Responsive Politics, TrueBlue, Inc., lobbying profile, accessed August 27, 2014.
  32. William Chapman, K&L Gates, Public Disclosure Form 2008, Washington State Public Disclosure Commission, government report, accessed September 17, 2014.
  33. Gary J. Kocher, K&L Gates, People, organizational website, accessed September 17, 2014.
  34. Bloomberg Businessweek, Steven C. Cooper, corporate profile, accessed August 27, 2014.
  35. 35.0 35.1 TrueBlue, Inc., 2014 Proxy Statement, SEC filing, accessed August 27, 2014.