The Corporate Marauder Undermining the Postal Service

Donald Trump got elected in part by selling the idea that his business experience would enable him to do a great job of running the government. We see how that turned out. And now we have another veteran of the private sector wreaking havoc on the United States Postal Service.

Louis DeJoy was named postmaster general after spending four decades in the trucking and logistics business, becoming wealthy enough in the process to join the ranks of Republican megadonors. He made his name and his fortune through the creation of a company called New Breed Logistics, which grew to prominence by securing contracts with large corporations such as Boeing as well as the Postal Service.

In 2014 he sold New Breed to the Fortune 500 company XPO Logistics, staying on to run the New Breed operation and serve as a director of XPO until 2018. If we want to get a sense of the management approach DeJoy is bringing to the USPS, we can look at the track record of New Breed and XPO.

As shown in Violation Tracker, XPO and its subsidiaries have racked up a total of $65 million in fines and settlements in more than 70 misconduct cases over the past two decades. Nearly two-thirds of that total comes from wage theft. Last year XPO paid $16.5 million to resolve allegations that for years it misclassified drivers as independent contractors to deny them overtime pay and paid breaks.

This year XPO paid another $5.5 million for wage and hour violations relating to workers at its Last Mile operations. Altogether, XPO and its subsidiaries have had to pay out some $40 million in wage theft lawsuits. Another $3.5 million settlement in a misclassification case brought against an XPO unit and the retailer Macy’s is awaiting final court approval.

Another problem area for XPO is employment discrimination. Two of the cases in this category relate to New Breed Logistics. In 2015 a federal appeals court upheld a $1.5 million jury verdict in a sexual harassment and retaliation case originally filed by the Equal Employment Opportunity Commission in 2010. Also in 2015, New Breed had to pay $90,000 to resolve allegations by the Office of Federal Contract Compliance Programs that it engaged in discriminatory practices at a facility in Texas.

XPO has also been called out for workplace safety and health deficiencies. It has been cited more than 20 times by OSHA for serious, willful and repeated violations.

Along with the mistreatment of workers, the rap sheet of XPO and its businesses includes allegations of cheating the federal government. This comes by way of Emery Worldwide, an air freight company that became part of Con-Way Inc., which was purchased by XPO in 2015.

In 2006 Emery paid $10 million to settle a False Claims Act lawsuit brought by the Justice Department concerning the submission of inflated bills to the Postal Service for the handling of Priority Mail at mail processing facilities during a multi-year contract.

Leave it to the Trump Administration to choose someone to head the Postal Service who was associated with a company linked to fraud committed against that same agency.

XPO continues to do business with the Postal Service, and DeJoy has continued to receive income from the company through leasing agreements at buildings he owns. Even if XPO had a spotless record, DeJoy’s ongoing dealings with it create a glaring conflict of interest.

DeJoy claims to be retreating, at least through the election, from the measures that threatened to create chaos for mail-in ballots.  Nonetheless, his corporate marauder’s approach to the management of the Postal Service still poses a grave threat to the future of a vital American institution.

The Paycheck Protection Program and Wage Theft

The Trump Administration’s reluctant disclosure of the names of more than 600,000 recipients of Paycheck Protection Program aid has shown that many of the loans went to firms that are well-connected and that otherwise don’t fit the image of mom-and-pop businesses we were led to believe would be the main beneficiaries.

There is another problem: many of the recipients previously engaged in behavior that amounts to paycheck endangerment. They failed to comply with minimum wage and/or overtime requirements and thus paid their workers less than what they were owed. In other words, they engaged in wage theft.

This comes from an analysis of data my colleagues and I have collected for the Covid Stimulus Watch and Violation Tracker databases. That includes the big PPP dataset and information on penalties imposed by the Labor Department’s Wage and Hour Division, one of the many agencies whose enforcement data can be found in Violation Tracker.

We are in the process of determining which PPP recipients are on the list of wage and hour violators, so we can highlight that in Covid Stimulus Watch along with other corporate accountability data.

As a first step, I looked at the 4,800 companies identified as receiving the largest PPP loans–$5 million to $10 million. So far, I have found 88 of those recipients that paid wage theft penalties since 2010. Their penalties averaged about $100,000—which is roughly double the amount paid in back pay and fines in a typical wage and hour case.

The largest wage theft penalty I’ve found for a PPP recipient is the $1.9 million paid by Hutco Inc., a marine and shipyard staffing agency based in Louisiana. In announcing the penalty, the U.S. Department of Labor said the company had utilized improper pay and record-keeping practices, resulting in “systemic overtime violations” affecting more than 2,000 workers.

PPP recipient National Food Corporation, a major egg producer, paid $435,000 in penalties for wage and hour violations at its operations in Washington State. The company also paid $650,000 to settle a sexual harassment lawsuit filed by the Equal Employment Opportunity Commission.

Hearth Management, a PPP recipient that manages assisted living facilities in four states, paid a total of $383,000 in wage theft penalties at several locations. At a facility in Tennessee, the Labor Department reported that the company made deductions from timecards for meal breaks even when employees worked through those breaks, and it failed to include on-call and other non-discretionary supplements when calculating overtime rates.

Other PPP recipients with substantial wage theft penalties include the publisher O’Reilly Media, the electronics company Sierra Circuits, the restaurant chain Legal Sea Foods, and Erie County Medical Center in Buffalo, New York, which has also been penalized for overbilling Medicaid.  Apart from the PPP money, the Erie County Medical Center has received more than $75 million in grants and loans from other federal programs related to covid relief.

We will undoubtedly find many more companies with similar track records as we analyze the other hundreds of thousands of PPP recipients.

It was not illegal for employers with a history of wage theft penalties to apply for and receive PPP assistance, yet the presence of these companies in the recipient list points to dual risks.

First, there is the possibility that these firms will “cook the books” when it comes to reporting on their use of PPP funds and submitting their requests to have the loans forgiven. Second, these firms may feel that the current economic crisis will give them cover for returning to their old practices of wage theft. At a time of massive unemployment, these firms may assume that workers will not dare to complain about being shortchanged on their pay.

For these reasons, PPP employers with a history of wage theft penalties should be subject to additional scrutiny both by the Wage and Hour Division and the Small Business Administration. Paycheck protection must mean not only the preservation of jobs but also the defense of fair labor standards.

Bloomberg’s Wage Theft Problem

Michael Bloomberg was pummeled during the Democratic debate in Las Vegas over the treatment of women at his media and data company. Yet that is not the only blemish on the employment record of Bloomberg L.P. The company also has a serious problem with wage theft.

Violation Tracker lists a total of $70 million in penalties paid by Bloomberg for wage and hour violations, putting it in 32nd place among large corporations. Yet many of the companies higher on the list – such as Walmart, FedEx, and United Parcel Service – employ far more people than the roughly 20,000 at Bloomberg.

The bulk of Bloomberg’s penalty total comes from a 2018 collective action lawsuit in which it agreed to pay $54.5 million to resolve allegations that the company violated the federal Fair Labor Standards Act and state law in New York and California by failing to pay overtime to employees responsible for assisting customers using the proprietary software on Bloomberg financial data terminals.

The 2014 complaint in the case alleged that the employees were required to be at their desks before their shifts began, were required to use parts of their lunch hour to finish requests, and were required to work past the end of their shifts to finish jobs – all of which could cause them to work more than the 40 hours for which they were paid. Yet they received no additional compensation for the extra time, which the complaint said should have been paid at time-and-a-half.

For the next few years, Bloomberg’s lawyers fought the case both on substantive and procedural grounds, but they lost in their effort to prevent the certification of a class by the court. Whereas most employers who experience that setback agree to settle, Bloomberg wanted its day in court. The trial finally began in April 2018. After about a week of proceedings, the company apparently did not like the way things were going and entered settlement talks with the plaintiffs. A deal soon followed.

What makes the company’s aggressive posture in this case surprising is that it had previously settled four other wage and hour lawsuits for amounts ranging from $346,000 to $5.5 million.

Bloomberg’s wage theft litigation troubles expanded after the company had been cited twice for wage and hour violations by the U.S. Labor Department, paying a fine of $522,683 in 2011 and $547,683 in 2013.

In addition to all these cases, Bloomberg recently agreed to pay $3 million to settle another overtime lawsuit involving call center workers (the case is not yet in Violation Tracker).

Bloomberg is not the only tech company to have run afoul of the Fair Labor Standards Act. Google’s parent Alphabet, Intel, Apple, Adobe Systems, Microsoft, and Oracle are also high on the list of those companies that have paid the most in wage theft settlements and fines.

Yet Bloomberg LP is the only one on the list whose founder, majority owner and CEO is seeking to be the presidential nominee of a political party deeply concerned about the treatment of workers.

The 2019 Corporate Rap Sheet

While the news has lately focused on political high crimes and misdemeanors, 2019 has also seen plenty of corporate crimes and violations. Continuing the pattern of the past few years, diligent prosecutors and career agency officials have pursued their mission to combat business misconduct even as the Trump Administration tries to erode the regulatory system. The following is a selection of significant cases resolved during the year.

Online Privacy Violations: Facebook agreed to pay $5 billion and to modify its corporate governance to resolve a Federal Trade Commission case alleging that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information.

Opioid Marketing Abuses: The British company Reckitt Benckiser agreed to pay more than $1.3 billion to resolve criminal and civil allegations that it engaged in an illicit scheme to increase prescriptions for an opioid addiction treatment called Suboxone.

Wildfire Complicity: Pacific Gas & Electric reached a $1 billion settlement with a group of localities in California to resolve a lawsuit concerning the company’s responsibility for damage caused by major wildfires in 2015, 2017 and 2018. PG&E later agreed to a related $1.7 billion settlement with state regulators.

International Economic Sanctions: Britain’s Standard Chartered Bank agreed to pay a total of more than $900 million in settlements with the U.S. Justice Department, the Treasury Department, the Federal Reserve, the New York Department of Financial Services and the Manhattan District Attorney’s Office concerning alleged violations of economic sanctions in its dealing with Iranian entities.

Emissions Cheating: Fiat Chrysler agreed to pay a civil penalty of $305 million and spend around $200 million more on recalls and repairs to resolve allegations that it installed software on more than 100,000 vehicles to facilitate cheating on emissions control testing.

Foreign Bribery: Walmart agreed to pay $137 million to the Justice Department and $144 million to the Securities and Exchange Commission to resolve alleged violations of the Foreign Corrupt Practices Act in Brazil, China, India and Mexico.

False Claims Act Violations: Walgreens agreed to pay the federal government and the states $269 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them.

Price-fixing: StarKist Co. was sentenced to pay a criminal fine of $100 million, the statutory maximum, for its role in a conspiracy to fix prices for canned tuna sold in the United States.  StarKist was also sentenced to a 13-month term of probation.

Employment Discrimination: Google’s parent company Alphabet agreed to pay $11 million to settle a class action lawsuit alleging that it engaged in age discrimination in its hiring process.

Investor Protection Violation: State Street Bank and Trust Company agreed to pay over $88 million to the SEC to settle allegations of overcharging mutual funds and other registered investment company clients for expenses related to the firm’s custody of client assets.

Illegal Kickbacks: Mallinckrodt agreed to pay $15 million to resolve claims that Questcor Pharmaceuticals, which it acquired, paid illegal kickbacks to doctors, in the form of lavish dinners and entertainment, to induce them to write prescriptions for the company’s drug H.P. Acthar Gel.

Worker Misclassification: Uber Technologies agreed to pay $20 million to settle a lawsuit alleging that it misclassified drivers as independent contractors to avoid complying with labor protection standards.

Accounting Fraud: KPMG agreed to pay $50 million to the SEC to settle allegations of altering past audit work after receiving stolen information about inspections of the firm that would be conducted by the Public Company Accounting Oversight Board.  The SEC also found that numerous KPMG audit professionals cheated on internal training exams by improperly sharing answers and manipulating test results.

Trade Violations: A subsidiary of Univar Inc. agreed to pay the United States $62 million to settle allegations that it violated customs regulations when it imported saccharin that was manufactured in China and transshipped through Taiwan to evade a 329 percent antidumping duty.

Consumer Protection Violation: As part of the settlement of allegations that it engaged in unfair and deceptive practices in connection with a 2017 data breach, Equifax agreed to provide $425 million in consumer relief and pay a $100 million civil penalty to the Consumer Financial Protection Bureau. It also paid $175 million to the states.

Ocean Dumping: Princess Cruise Lines and its parent Carnival Cruises were ordered to pay a $20 million criminal penalty after admitting to violating the terms of their probation in connection with a previous case relating to illegal ocean dumping of oil-contaminated waste.

Additional details on these cases can be found in Violation Tracker, which now contains 397,000 civil and criminal cases with total penalties of $604 billion.

Note: I have just completed a thorough update of the Dirt Diggers Digest Guide to Strategic Corporate Research. I’ve added dozens of new sources (and fixed many outdated links) in all four of the guide’s parts: Key Sources of Company Information; Exploring A Company’s Essential Relationships; Analyzing A Company’s Accountability Record; and Industry-Specific Sources.

Being Mindful of Paycheck Abuses

It turns out that yoga instructors are mindful about more than poses and breathing. They also make sure they are paid properly for their work. A group of instructors in Illinois who sued CorePower Yoga for violating federal labor law recently reached a final settlement of $1.5 million to resolve allegations that the chain failed to pay them for mandatory out-of-studio work such as class preparation and communicating with students.

The yoga instructors’ case is just one of a remarkable series of settlements that continue to emerge from the courts despite the efforts by employers to thwart collective action against workplace abuses. I keep an eye on these developments as part of my work on Violation Tracker and am amazed at the quantity and variety of wage theft litigation. Here are some other examples I have been collecting to include in the next update of the database.

PetSmart agreed to pay $2.4 million to a group of dog groomers in California who alleged they were shortchanged on overtime and mandatory rest breaks and meal periods.

Zocdoc, an online medical appointment booking service, agreed to pay $1.4 million to resolve a lawsuit filed in New York alleging that the company mistakenly classified sales personnel as exempt from overtime pay.

Safelite agreed to pay $8.2 million to windshield replacement technicians in California who claimed they were not properly paid for administrative duties and time spent traveling to jobs.

Great American Financial Resources agreed to pay $1.25 million in Ohio to settle a dispute involving commissions for insurance agents.

Here are some other cases in which the parties have reached a settlement that is awaiting final court approval:

Morgan Stanley agreed to pay more than $10 million to resolve a lawsuit alleging it improperly refused to reimburse its financial advisers for work-related expenses such as client entertainment.

Pongsri Thai Restaurant in New York agreed to pay $3.7 million to a group of workers to resolve allegations that the company violated overtime and minimum wage regulations.  

FedEx agreed to pay $3.1 million to settle a suit brought by a group of drivers in western New York claiming they were misclassified as independent contractors and subject to improper pay deductions.

Not all these cases are resolved through a settlement. For example, a federal jury in Florida recently awarded $1.2 million to a group of forepersons employed by the tree service company Asplundh who alleged they were improperly denied overtime pay. It is not yet clear whether the company will appeal.  

A federal appeals court recently upheld a $4.6 million verdict won by a group of exotic dancers who had alleged that the Penthouse Club in Philadelphia misclassified them as independent contractors and thus denied them minimum wage and overtime protections.

Two things are made clear by this list. The first is that the problem of wage theft is pervasive. It is present in both old economy and new economy companies and in both highly paid and low-wage occupations. The culprits are both large employers and small ones, and the problem can be found all over the country.

The second conclusion is that, despite adverse rulings from the U.S. Supreme Court and efforts by employers to make it as difficult as possible for workers to sue, there is no sign yet that the flow of successful collective action wage and hour lawsuits is receding.

This is vital at a time when the Trump Labor Department has been seeking to replace federal enforcement with a dubious program promoting voluntary compliance by employers. For now, workers are holding their own in the ongoing battle over paycheck abuses.

The Continuing Battle Over Workplace Rights

The claim that everyone is entitled to his or her day in court is supposed to be one of the bedrock principles of the U.S. legal system. This notion, as it applies to workplace abuses, took a big hit in the Supreme Court last year, and now the National Labor Relations Board is making matters worse.

In its controversial Epic Systems ruling in May 2018, the high court held that employers can compel their workers to sign agreements waiving their right to sue over issues such as wage theft and discrimination and limiting their redress to arbitration actions. Because these actions are individual rather than collective and are not part of the public record, arbitration makes it much easier for corporations to avoid paying out substantial damages for their misconduct.

The pro-business majority on the NLRB just pushed through a decision that gives employers an additional opportunity to implement a mandatory arbitration system. The board ruled that companies may impose such a system after a Fair Labor Standards Act collective action lawsuit has already been filed, in order to prevent additional employees from signing on to the suit.

The board also affirmed the right of an employer to discharge a worker who refuses to sign a mandatory arbitration agreement.

This patently unfair decision is another indication of the lengths that the corporations and their advocates will go to circumscribe the rights of workers. We should expect to see more of these moves, because the Epic Systems ruling has not yet put a major dent in class action lawsuits.

There has not been a significant decline in the number of cases filed, and there continues to be a steady stream of settlement announcements, especially for cases filed in California, which gives workers additional legal tools to deal with wage theft in particular.

Here are some recent examples of these settlements:

Wells Fargo agreed to pay $35 million to a group of 38,000 bank employees who alleged they were improperly denied overtime pay.

Kraft Heinz agreed to pay $3 million to settle a suit brought on behalf of 4,000 workers alleging that the company violated California labor law by failing to pay overtime.

The operator of hundreds of Panera Bread restaurants agreed to pay $4.6 million to settle allegations that it improperly classified assistant managers as executives to deny them overtime pay.

A group of drivers and their assistants who delivered Best Buy merchandise signed a $3.25 million deal to settle a lawsuit alleging they were misclassified as independent contractors and consequently shortchanged on pay.

A Massachusetts court gave preliminary approval to a $3.9 million settlement of a class action brought by former commission-only salespeople at the mattress retailer Sleepy’s who argued they should receive overtime pay.

If corporate interests get their way, these settlements will disappear, and workers who are cheated on the job will have to settle for the crumbs they may get through individual arbitration filings.

Trump’s Wage Theft Vulnerability

Donald Trump may have Bill Barr’s Justice Department in his pocket, but the president is on much shakier ground in his home state. And that’s not only because New York Attorney General Letitia James is seeking his tax returns and investigating his business deals.

Trump also has to contend with the fact that the New York AG’s office is one of the most aggressive prosecutors of wage and hour violations by employers in the state. One of those employers is the Trump Organization, whose Trump National Golf Club in Briarcliff Manor, New York is reported to be rife with wage theft.

The Washington Post has just published a detailed account of the ways in which employees at the golf club, especially undocumented immigrants, have been required to work off the clock at no pay. Workers are reported to have been explicitly told by managers to clock out but continue to perform tasks such as vacuuming carpets and polishing silverware.

The Post article states that nearly 30 former employees of Trump golf courses have met with state prosecutors and have provided them documentation such as W-2 forms and pay stubs. One of those workers, Jose Gabriel Juarez (photo), told the Post: “It was that way with all the managers: Many of them told us ‘Just clock out and then stay and do the side work.’”

This does not bode well for the Trump Organization. According to data contained in Violation Tracker, the New York AG’s office has brought more than 60 successful cases against companies for wage theft and has collected more than $38 million in penalties. The largest recovery was $4.8 million paid by the utility company National Grid in 2013.

Yet those are only the cases in which the defendants were corporations. The New York AG’s office is one of only a few law enforcement agencies that also bring cases against individual corporate executives and business owners for labor violations. In other words, it takes the phrase wage theft literally and has on numerous occasions filed criminal charges against those individuals. Here are some examples:

In May 2016 Lalo Drywall, Inc. and its owner Sergio Raymundo, were sentenced in Manhattan Supreme Court after a conviction related to wage theft for underpaying workers at a mixed-use, commercial, and low-income residential project in Harlem. Raymundo pled guilty to one count of Falsifying Business Records in the First Degree under New York State’s Penal Law, a class E felony, as well as to one count of Failure to Pay Wages under New York State’s Labor Law, an unclassified misdemeanor.

In September 2017 Arthur Anyah, owner of Mical Home Health Care Agency, Inc. in Peekskill, New York was sentenced to one year in jail for defrauding 67 employees out of over $135,000 in wages. Anyah had pled guilty to engaging in a scheme to induce health care workers to provide home health care services to the agency’s clients without pay, as well as falsifying business records, failing to pay wages, and defrauding the state unemployment insurance contribution system.

These and other wage theft cases, as well as many other kinds of prosecutions, can be found in the press release archive of the New York AG’s office. The Corporate Research Project is in the process of compiling these cases and similar ones from the other state AGs for an expansion of Violation Tracker that will be released later this year. By that time there may very well be a new entry for the Trump Organization to include.

Mistreating Customers and Workers

For a long time, the corporation that stood out as America’s worst employer was Walmart, given its reputation for shortchanging workers on pay, engaging in discriminatory practices and ruthlessly fighting union organizing drives. Today, Amazon.com seems to be trying to take over that title, at least for its blue-collar workforce.

Yet when we look at the corporations that have been paying the most penalties for workplace abuses, there is another contender for the top, or really the bottom, spot among U.S. employers: Bank of America. In Big Business Bias, a report just published by the Corporate Research Project of Good Jobs First, we found that BofA has paid more in damages, settlements and fines in workplace discrimination and harassment cases than any other large for-profit corporation.

In Grand Theft Paycheck, a report we published last year on wage theft, BofA ranked third (after Walmart and FedEx) in total penalties paid in private wage and hour lawsuits and cases brought by the U.S. Labor Department.

BofA’s position in these tallies is to a significant extent the result of cases brought against its subsidiary Merrill Lynch, which the federal government pressured it to acquire during the financial meltdown in 2008. Merrill accounts for 95 percent of the $210 million in penalties BofA has paid in discrimination cases and more than one-quarter of the $381 million paid in wage theft cases.

Merrill brought with it problems beyond questionable personnel practices. In 1998 it had to pay $400 million to settle charges that it helped push Orange County, California into bankruptcy with reckless investment advice. In 2002 it agreed to pay $100 million to settle charges that its analysts skewed their advice to promote the firm’s investment banking business (plus another $100 million the following year). In 2003 it paid $80 million to settle allegations relating to dealings with Enron.

This track record was similar to that of BofA before the merger. For example, in 1998 the bank paid $187 million to settle allegations that in its role as bond trustee for the California state government it misappropriated funds, overcharged for services and destroyed evidence of its misdeeds. BofA later paid to settle lawsuits concerning its dealings with Enron ($69 million) and another corporate criminal, WorldCom ($460 million).

In the wake of the financial crisis, BofA had to enter into several multi-billion-dollar settlements concerning the sale of toxic securities and various mortgage abuses. It is for all these reasons that BofA tops the Violation Tracker ranking of the most penalized parent companies, with payouts of more than $58 billion.

BofA is not unique in this respect. Another major bank is also one of the ten most penalized corporations overall as well as high on the lists of those with the most penalties related to workplace discrimination and wage theft. That bank is Wells Fargo, which ranks sixth on the Violation Tracker list with over $14 billion in penalties, ninth in the discrimination tally with $68 million and fourth in the wage theft tally with $205 million.

Wells Fargo, of course, is notorious for creating millions of bogus accounts to generate illicit fees and other deceptive practices. Last year, the Federal Reserve took the unprecedented step of barring the bank from growing any larger until it cleaned up its act. The agency also announced that the bank had been pressured to replace four members of its board of directors.

Bank of America and Wells Fargo demonstrate all too clearly that mistreatment of customers can go hand-in-hand with mistreatment of workers.

A Not-So-Fond Farewell to Sears

The bankruptcy filing, store closings and general uncertainty surrounding the future of Sears have prompted a spate of nostalgic business-page articles about the history of the once dominant retailer. Whether or not the chain survives, it is important not to sugarcoat its past.

Sears, along with Montgomery Ward, brought the joys of mass-produced merchandise to rural America. Yet its mail-order operations undermined local merchants and initiated the long-term decline of traditional main street life. Sears’ hyper-efficient system for fulfilling mail orders, using conveyor belts and pneumatic tubes, was said to have helped inspire Henry Ford’s automobile assembly line with its mixed blessings.

Sears began opening retail stores in the 1920s, and in the postwar period it played a major role in automobile-focused suburbanization and its attendant social and environmental impacts. The company would later extract a $242 million subsidy package to relocate its headquarters from downtown Chicago to exurban Hoffman Estates after threatening to move out of state.

In the 1980s Sears was one of the prime examples of wrong-headed diversification as it acquired the Dean Witter brokerage house and the Coldwell Banker chain of real estate agencies, and then introduced the Discover credit card. During the 1990s Sears had to dispose of all those businesses, along with its Allstate insurance operation.

In 2005 Sears suffered the indignity of being combined with Kmart by private equity operator Edward Lampert, who believed he could solve the longstanding problems of the two chains but instead ended up simply stretching out their death spiral.

Sears had long resisted unionization of its stores, but it adopted paternalistic practices such as profit-sharing that partly substituted for collective bargaining. During the Lampert era there has been little paternalism. Instead, workers at Sears and Kmart have frequently found themselves the victims of abusive labor practices.

Since 2007 the two chains have been implicated in nine collective action wage theft lawsuits and have had to pay out more than $56 million in settlements and damages – more than any other broadline retailer except Walmart.

During the Lampert era the two chains have also been cited more than 50 times by OSHA for workplace safety and health abuses, paying some $600,000 in fines. They have also been involved in five cases with the Equal Employment Opportunity Commission, including one in which Sears had to pay $6.2 million in 2010 to settle allegations of widespread violations of the Americans with Disabilities Act.

Sears has also gotten into trouble in its dealings with the federal government. In 2017 Kmart had to pay $32.3 million to resolve allegations that its in-house pharmacies violated the False Claims Act by overbilling federal health programs when filling prescriptions for generic drugs.

Sears has played a significant role in the history of American retailing, but it has not always been a positive one. Now that its days appear to be numbered, we can focus our attention on the newer generation of bad actors, such as Amazon, that now dominate the system in which we obtain the necessities of everyday life.

Trump’s Law and Order Campaign Skips the Workplace

The Trump Administration has left little doubt that one of its main missions is to roll back the regulatory initiatives of the Obama years, especially the Clean Power Plan and the Consumer Financial Protection Bureau. Although Trump has been less overt about it, his corporate-friendly approach also includes weakening rules that have been around for decades.

An important case in point concerns the Fair Labor Standards Act, the key federal wage and hour law that was signed into law 80 years ago by President Franklin Roosevelt. The culmination of decades of struggle over excessive workweeks, inadequate pay levels and child labor, the FLSA put the federal government in the business of combatting wage theft and other forms of workplace exploitation.

It accomplished that through a system of workplace investigations and the imposition of financial penalties on employers large and small. In a move that has received limited attention, the Trump Labor Department is seeking to replace rigorous enforcement with a system called Payroll Audit Independent Determination (or PAID) that puts employers on the honor system. Beginning with the dubious premise that wage and hour violations mainly derive from inadvertent mistakes made by managers, PAID will encourage employers to report irregularities on their own. When they do they will still have to pay back wages but will not be assessed damages or penalties.

Such a system makes a mockery of real enforcement. What makes matters worse is that PAID, which is being billed as a pilot program for now, is being pursued right after the U.S. Supreme Court’s disastrous Epic Systems ruling. That decision affirms the right of employers to compel workers to sign mandatory arbitration agreements that would severely curtail their ability to bring collective action lawsuits. As my colleagues and I at the Corporate Research Project and Jobs With Justice Education Fund showed in a recent report, these lawsuits have allowed workers to recover billions of dollars from large corporations.

PAID was featured in a recent NBC News feature on how the Trump Administration is relaxing regulatory enforcement in numerous areas. This prompted a group of Democratic Senators to express concern about PAID to the DOL, whose spokesperson responded that it was “premature to comment” on the program.

The controversy over PAID comes amid growing concern about the prevalence of wage theft. Some of those abuses apparently exist right inside the federal government. The Labor Department, which has not yet left the investigation business, is reported to be examining the practices of a company called Seven Hills, which manages the food court at the Pentagon.

Faced with the prospect of diminished DOL enforcement and restrictions on lawsuits, activists are looking to other solutions. Some of the most encouraging work is happening at the local and state levels. For example, Centro de Trabajadores Unidos en la Lucha (Center for Workers United in Struggle) is pressing Minneapolis Mayor Jacob Frey and the City Council to pass an ordinance dealing with wage theft.

In some parts of the country, law enforcement officials are taking the term wage theft literally and treating it as a criminal offense. For example, after a joint investigation by the Washington State Attorney General’s Office and the Department of Labor & Industries, a construction company and its owner pled guilty last month to a criminal charge of first-degree theft. Earlier this month, the New York Attorney General and the Inspector General of the Port Authority announced the arrest of a contractor for failing to pay prevailing wages at a publicly-funded construction project at LaGuardia Airport.

While it would be terrible to see DOL’s wage and hour enforcement system dismantled, there are other ways rogue employers can be brought to justice.