Some Labor Ready Lawsuits
Summaries of Recent Legal Challenges

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This is a short--and by no means comprehensive--review of recent cases involving Labor Ready, Inc. It does not include any legal claims that have not reached the courts, nor does it include any proceedings that may be underway in either Canada or the United Kingdom.  

Adkins vs. Labor Ready, Inc.

Curtis Adkins was a temporary employee of Labor Ready, who claimed that employees were entitled to payment for waiting time at the company's dispatch office, travel time between that office and the assigned workplace, and time spent undergoing required training and any other overtime pay

Adkins filed a class-action lawsuit in a federal district court, seeking the recovery of back pay.

In response to Adkins' lawsuit, Labor Ready pointed to an agreement that all potential employees signed as part of the job application that provided:
that states that Labor Ready is on a day-to-day basis. That is, at the end of the work day, employers are deemed to have quit unless they receive a work assignment at a later date.

Labor Ready also claimed they issued a contract, which states that any disputes, including any claims of discrimination, harassment or wrongful will be resolved by arbitration and not through court.

Adkins had to convince the Fourth Circuit that a valid agreement didn't exist or that it was so flawed that it couldn't be enforced.

The argument that Labor Ready had given the employee its promise that it would arbitrate any dispute between them, including claims that the company might have against him, was rejected.

Adkins argued that unfairness existed because the cost of arbitration would be so high that it would be unreasonable for him to pursue it, especially when his claim couldn't be grouped with other employees in a class-action lawsuit. The court rejected that argument, finding that he'd presented no real evidence of how much the arbitration would cost and whether that cost would be prohibitive.

Adkins also argued that because his employment expired after each day of work, the arbitration clause expired as well. The court rejected that argument, finding that the agreement was an ongoing provision that survived the termination of employment and was meant to govern any disputes that arose, even though they were filed after the actual employment

(Source: Steptoe & Johnson PLLC, “Arbitration agreement in job application binding on temporary employees” West Virginia Employment Letter, Lee Smith Publishers & Printers, December 2002, Volume 8, Issue 6.)

New Hampshire Department of Labor vs. Labor Ready, Northeast, Inc.

After a hearing, the DOL concluded that Labor Ready's practice of deducting $ 4 per day for transportation expenses and taking the money directly from the employees' paychecks violated the New Hampshire labor statutes, which prohibit withholding any portion of a worker's wages except for very specific purposes, none of which was involved here.

The total wage adjustment that the DOL imposed against Labor Ready for deducting transportation money from its many employees totaled more than $ 140,000.

Labor Ready didn’t challenge this claim but did challenge the DOL's statutory authority to initiate and pursue the wage claims at either the DOL or the superior court when no individual worker had come forward seeking a wage adjustment.

When analyzing Labor Ready's position, the court had to assess whether New Hampshire's wage statute provides a basis for the DOL to pursue claims on behalf of the many employees who lost relatively small amounts of money even though they didn't pursue the claims themselves.

The court decided that the statute's language allows the DOL to pursue claims only when individual workers assign their rights to the commissioner to pursue — on their behalf — the relief to which they're entitled.

The DOL argued that the supreme court's conclusion would make it extremely difficult for individuals to pursue very small wage claims since it would likely cost more to pursue the claim than an employee could ever recover.

(Source: Sulloway & Hollis, P.L.L.C. “DOL can't sue alone”
New Hampshire Employment Law Letter, M. Lee Smith Publishers & Printers, July 2002, Volume 7, Issue 6)

Arizona Attorney General Janet Napolitano vs. Labor Ready, Inc.

The Arizona Attorney General's Office filed a lawsuit against Labor Ready, charging its check-cashing fee violates Arizona law.

Labor Ready pays workers daily, offering payment by either check or cash. Workers who choose to be paid in cash get a voucher that must be cashed at a Labor Ready machine with a $1 "administrative expense." The machine offers no change so pay is rounded down to the next dollar

The lawsuit claims Labor Ready violates an Arizona law (The Check Cashier Act), which prohibits temporary-employment agencies from charging workers a check-cashing fee.

In 2000, Labor Ready Inc. generated $150,300 in fees from workers in Arizona.

If the lawsuit is successful, Labor Ready could be fined millions of dollars because each violation of the State Consumer Fraud Act can result in up to $10,000 in fines.

Labor Ready says workers can get paid without any fees if they choose to go to the bank. Spokeswoman Susan Burke says that workers have a choice of whether or not to use the service.

The Washington state Department of Labor & Industries has said that as long as workers can cash checks at a bank, Labor Ready's fees do not violate state law.

(Source: Jonathan J. Higuera, “Arizona State Attorney General Files Suit against Day Labor Firm for Extra Fee” The Arizona Daily Star, July 15, 2002.)

EEOC vs. Labor Ready Inc., Memphis, TN

Equal Employment Opportunity Commission filed a racial discrimination lawsuit against Labor Ready Inc. on behalf of eight employees in its Memphis and Jackson, Tenn., offices.

The lawsuit alleges the temporary employment Labor Ready failed to promote black employees into management positions since July 1999, retaliated against employees - black and white - for opposing the unlawful employment practice and terminated one employee who complained.

The lawsuit was filed in federal district court in Memphis on May 20.
According to the lawsuit, the black defendants claim they were overlooked for management promotions, which were given to equally or less qualified white employees.

The lawsuit seeks back pay, interest on back pay, compensatory damages for emotional and psychological harm and punitive damages.

(Source: Richard Thompson, Suit accuses Labor Ready of Discrimination, The Commercial Appeal ,Memphis, TN, May 28, 2003.)

Flynn vs. Labor Ready Inc.

Former Labor Ready employees filed a suit against the agency, alleging that the processing fees of its CDMs were unlawful deductions from their wages.

Labor Ready pointed out that prior to their employment with Labor Ready, workers each completed an Application for Employment wherein they agreed that “any disputes arising out of [their] employment … and all other employment related issues … will be resolved by arbitration as [their] sole remedy.”

Similar to the Adkins, workers stated that the costs of arbitration would far outweigh any potential recovery.

Labor Ready characterizes the arbitration fees as “reasonable, not excessive” and has agreed to “bear the costs of arbitration if the workers pay the initial arbitration filing fee.”

The workers agreed to arbitrate any dispute arising out of their employment and “all other employment related issues.”

The court granted Labor Ready’s motion for arbitration.

(Source: Justice Bonina, FLYNN v. LABOR READY, INC, New York Law Journal, November 26, 2002, . 228; Pg. p. 19, col. 5.)

Wilkerson vs. Labor Ready Inc., California

Wilkerson v. Labor Ready Inc., a union-backed suit against Labor Ready for its CDM fees and other abuses was filed.

On July 26, 2002, it was classified as a class action suit by California Supreme Court judge, who concluded that the workers share a common interest in their claims and thus certified the case as a class action.

(Source: PR Newswire, "State Files Lawsuit Against Labor Ready;
Southwest Center for Economic Integrity Seeks to Shed Light On Alleged Illegal Fees,” Financial News, July 15, 2002.)

Female Workers vs. Labor Ready Inc., Los Angeles, CA

Lawsuit claims that Labor Ready conspired to bar women from replacing striking workers at a South Gate window-frame factory.

The suit claims that The Tacoma company and International Aluminum used the code words "big hands" in daily phone calls to indicate only men should be hired for jobs at a South Gate during a 5-month strike.

About 300 women are seeking class-action status for a job-bias suit that demands compensation for lost wages and damages to punish the companies.

Labor Ready has yet to comment.

(Source: The Associated Press, “Women target Labor Ready in discrimination lawsuit Business Briefs, The Seattle Times, August 1, 2002.)

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