Who’s Paid the Biggest Worker Abuse Fines? The Answer May Surprise You.

Phil Mattera Research Director , Good Jobs First

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.

Posted In: Allied Approaches

Union Matters

Uber Drivers Deserve Legal Rights and Protections

By Kathleen Mackey
USW Intern

In an advisory memo released May 14, the U.S. labor board general counsel’s office stated that Uber drivers are not employees for the purposes of federal labor laws.

Their stance holds that workers for companies like Uber are not included in federal protections for workplace organizing activities, which means the labor board is effectively denying Uber drivers the benefits of forming or joining unions.

Simply stating that Uber drivers are just gig workers does not suddenly undo the unjust working conditions that all workers potentially face, such as wage theft, dangerous working conditions and  job insecurity. These challenges are ever-present, only now Uber drivers are facing them without the protection or resources they deserve. 

The labor board’s May statement even seems to contradict an Obama-era National Labor Relations Board (NLRB) ruling that couriers for Postmates, a job very similar to Uber drivers’, are legal employees.

However, the Department of Labor has now stated that such gig workers are simply independent contractors, meaning that they are not entitled to minimum wages or overtime pay.

While being unable to unionize limits these workers’ ability to fight for improved pay and working conditions, independent contractors can still make strides forward by organizing, explained executive director of New York Taxi Workers Alliance Bhairavi Desai.

“We can’t depend solely on the law or the courts to stop worker exploitation. We can only rely on the steadfast militancy of workers who are rising up everywhere,” Desai said in a statement. 

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Make Father's Day Union Made!

Make Father's Day Union Made!