Is Irvine Industrial Launderer Prudential Overall Supply Cheating Workers Out of a Living Wage?
Taken to the Cleaners
Is an Irvine-based industrial-laundry company cheating workers out of a living wage? Three California cities say yes
The toxic chlorine-gas mist rose from the floor drains around 7 a.m. on May 11, 2007, at an industrial-laundry facility owned and operated by Prudential Overall Supply of Irvine. The night before, an employee had mistakenly poured sulfuric acid from the hazardous-materials storage area through a wash pipeline normally used to feed bleach to the 800-pound washing machines at the plant.
The next morning, several hours after the 35 or so women and a few men had filed into work at the laundry in the northern San Diego County town of Vista, a mysterious cloud hovered over them like a dense coastal fog. Plant managers had noticed the sulfuric-acid mistake the night before and had stopped washing garments, but they didn't wash out the pipeline before the 4 a.m. shift started. Sometime early that morning, water was flushed through the pipe before bleach was reintroduced. But it wasn't enough to keep the two chemicals from mixing, and a cloud erupted when the bleach interacted with a residual amount of sulfuric acid. What followed among a majority of the workers in the factory-like facility were coughing spells, nausea, dizziness and a few cases of fainting.
Eloina Solano was in one corner of the plant, surrounded by towels and the usual loud conveyor-belt buzz. She was working on the 1,000 or so towels she needed to fold that hour. "I said to a co-worker that it really smelled like Clorox. I thought maybe the clothes had been washed with too much bleach," she says. "I turned and looked, and I noticed a woman coughing and coughing. But by then, you couldn't see much anymore. Everything was white."
Solano and a handful of other employees from the Vista facility who spoke to the Weekly say they didn't hear an alarm or an announcement to evacuate, so most kept working. The emergency alarm buttons at the facility had not been pressed. But the workers say they had never been told those existed. They had never been informed of any evacuation plan, they say, so some kept on working, while others whispered to one another to get out.
"I turned around and didn't see many people," Solano says. "I told my co-worker, but we decided to keep working. Finally, I turned around, and even she was gone. By then, my face and my throat were burning."
"We were being poisoned," says Sergio Rosales, who requested a small mask and was not told to evacuate. The mat washer had been with the company for four years. "We'd never been trained for what we were supposed to do in case of an emergency."
Remedios Lopez fainted, as did a few other women. "After an hour, they wanted us to go back inside," she says. But some workers insisted they needed to see a doctor; managers eventually authorized a call to the fire department, she says. Twenty-one employees were taken to the hospital and released the same day. Hazardous-materials units arrived once the fumes had dissipated and declared the work environment safe. No accident-related citations were immediately issued by the California Occupational Health and Safety Administration (Cal/OSHA), which conducted on-site interviews that day.
At the time, vice president and company spokesman Jerry Martin told the San Diego Union-Tribune that the "safety procedures that we have in place at Prudential were acted upon." Recently, Martin told the Weeklythat the incident was minor and that the company had not been cited by Cal/OSHA, which, he said, only found minor labeling infractions when it conducted a subsequent investigation.
But according to Cal/OSHA, that investigation found that employees administering the vats of bleach, sulfuric acid and other wash chemicals had never been trained on potential toxic interactions and that the pipes used to transport such chemicals weren't labeled; they found that the company did not have an effective emergency-evacuation plan and that employees were not familiar with the company's injury- and illness-prevention program. Cal/OSHA cited the company, fined it $1,950 in November 2007, and required that it implement a proper prevention program, label its pipelines, and train employees on hazardous materials.
The accident certainly reveals the dangers inherent to this little-known industry. But Prudential's response to the incident also shows that, when it comes to its workforce, the 75-year-old, Irvine-based company—the state's largest industrial launderer—has a tendency to say one thing and do another. Martin says this dour image of the company is nothing but a targeted smear campaign by UNITE HERE, the union that represents laundry workers and has contracts at eight of Prudential's 16 California facilities, including Vista, workers of which voted for union representation this April.
But safety is only one aspect of the union's two-pronged effort on behalf of the workers at Prudential's facilities. The other is to ensure that its members are aware of their rights to higher pay under "living-wage" contracts that the company holds with cities throughout the state and the military, says Laura Moran, one of two UNITE HERE researchers in California who have investigated Prudential.
The second, legally stickier effort is the result of a landmark million-dollar living-wage case in Hayward, won by workers against the country's biggest industrial launderer three years ago. There, hundreds of workers filed a class-action suit when it was discovered, after initial probes by the union, that Cincinnati-based Cintas Corporation had reneged on its contractual promise to pay employees that city's living wage, which is generally several dollars more per hour than the federal or state minimum wage. After that case was won, says Moran, the union began conducting audits of living-wage contracts held by Prudential and other industrial launderers.
Between 2002 and 2006, Prudential signed contracts with Los Angeles, San Diego and Oakland, specifically agreeing to pay its workers the higher mandated wages under those cities' living-wage ordinances. Investigations by city officials and city attorneys from all three cities, prompted by a series of union complaints filed on behalf of workers last year, have revealed that Prudential repeatedly either failed to pay or chose not to pay workers those wages, and the company effectively owes employees tens of thousands of dollars.
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Isabel Peña lights a cigarette and stares out at the highway from a coffee shop in Riverside. Her hand shakes a little, but she straightens up when she starts to speak, her eyes as black as her thick bob. She pulls her sleeves back and reveals a series of soft brown lines etched into the underside of her forearms. The almost ritualistic markings are the result of years of working with large, hot presses at Prudential, she says in Spanish.
Like other industrial laundries, Prudential is in the business of renting, selling and cleaning uniforms for biotech companies, city governments, hospitals, school districts, hotels, restaurants and hundreds of other types of companies. Prudential, founded by John Clark in 1932, has 1,700 employees and 32 facilities in seven states, plus one in Mexico and one in Malaysia. Last year, the company made $150 million in sales; it has contracts with 110 Fortune 500 companies and developed the first dust-free, contaminant-free garments. Although Martin says less than 1 percent of the company's contracts are with governments, those agreements represent millions of dollars.
Etched into her memory, Peña says, are the logo and the smooth, thick buttons on the beige and soft-green uniforms of the Ontario International Airport. For the past five years, the 18-year company veteran would place the uniforms, one by one, on headless mannequins, snap a pin to the bottom, close each button shut, and then send the dummy high above her head to a massive industrial steamer for an instant press.
What she and 72 other employees at Prudential's Riverside plant didn't know in 2002, when they first began laundering the airport uniforms, was that their employer had entered into the contract with Los Angeles World Airports under the city's strict living-wage rules, which required that Peña and all the other employees be paid a little bit more for every hour they spent with those particular uniforms.
"They never said anything. And we all cleaned those uniforms for years," says Peña.
Last July, Peña, who was elected to be a shop steward by her compañerasat the unionized Riverside facility, filed a complaint with the city of Los Angeles, alleging Prudential owed its employees thousands of dollars in back wages for the Los Angeles World Airports contract.
"We're all asking for the living wage that the law says they must pay us. The city pays so that workers will get that salary, and he pockets it," says Peña of company chairman Don Clark, son of founder John. "We've never ever been paid that salary."
* * *
The epicenter for the living-wage movement was Baltimore in the mid-1990s. It was there, in 1994, that the first local ordinance was passed requiring companies who leased public land or held contracts with the city to pay a minimum wage higher than the federal standard.
Advocates of the ordinances, which are often aggressively opposed by the business community, have sought the increases so that workers can afford to live in the cities where they toil. Victories and losses have come after long campaigns and much controversy. Many of the ordinances have included mandates for health-care coverage or equivalent pay, something the federal minimum wage has never required.
Los Angeles passed one of the first living-wage ordinances in California in 1997; Oakland followed in 1998, San Diego in 2005. To date, 140 cities, counties and universities around the country have passed similar laws. Although the new wage rules haven't significantly increased the cost to cities, they are proving a bit messy to keep track of. It is up to the employers to determine how they will document the work done on living-wage contracts and pay their employees accordingly. Every year, the wage increases on July 1; employers holding living-wage contracts must likewise adjust their payrolls.
Three years ago, the first and biggest living-wage class-action lawsuit involving an industrial launderer was won by workers in Hayward, who demanded back wages from Cintas, the country's largest industrial launderer. The company appealed the decision, which was overruled June 1. A California appeals court upheld Hayward's ordinance and ordered the company to pay $1.4 million in back wages, interest and penalties to more than 200 workers. Cintas was beset by negative press last year when its repeated safety violations culminated in the death of an employee who fell into an industrial, 300-degree dryer and was buried beneath hundreds of pounds of jeans.
* * *
Los Angeles began investigating Prudential's contracts with Los Angeles World Airports last fall, after Peña filed her complaint. Through the contracts, the Ontario International Airport uniforms were cleaned at Prudential's Riverside facility. Prudential signed an agreement to abide by Los Angeles' living-wage ordinance; the company's bid on the contract would have factored in the additional costs to the city for those higher wages, says Mario Interiano, acting supervisor of enforcement for the city's Bureau of Contract Administration.
"One of our questions to Prudential [during the investigation] was: Were they able to identify or isolate employees who would be working on the city contract?" Interiano says, "They said, no, because the nature of the operation would make it difficult for them to isolate those employees and determine how much time they're spending on the contract."
After trolling through payroll documents, Interiano and his small staff determined that since there was no way for Prudential to show they were paying the living wage to their workers, they were still liable for those wages. After conducting a several-months'-long investigation, the city determined late last year that Prudential owed its Riverside employees tens of thousands of dollars in back wages, but did not have an exact amount at that time.
On Dec. 14, 2007, the Bureau of Contract Administration issued its first letter of demand, requesting the company determine how much it owed its workers in living wages for the five-year duration of the city contract and pay them immediately (within 10 days) or request a hearing or an extension. Prudential spokesman Martin says he has never seen the letter sent by Interiano to Prudential's vice president of finance, John Thompson.
When the company did not respond to Interiano's request for corrective action, the city began the tedious task of trying to determine the amount owed. When asked why the city had continued to renew contracts without ever verifying whether Prudential was complying with the ordinance, Interiano said the small staff assigned to manage city contracts could not afford to audit companies it held contracts with. "We've switched over to a complaint-based system," he says.
Interiano has determined that Prudential now owes its Riverside workers $509,105.25. On June 13, the city sent another demand letter, giving Prudential 10 days to pay the back wages. If the company fails to respond by June 26, says Interiano, the city will consider one or all of the following options: filing suit, fining Prudential $100 per employee for every day that person was not paid the correct amount, and/or barring Prudential from bidding on future city contracts for three years.
"Part of the reason we're asking them to pay the employees is it guarantees the city that the contractor doesn't pocket the money and that it goes to the rightful owners," says Interiano. Prudential, he says, has not yet responded to the city's demand letter.
Martin said he could not comment whether the company would pay the back wages. "We will respond in a timely manner," he says. "And we believe the dispute can be amicably resolved."
LA's demand for back wages is the third in less than a year. Oakland asked for a total of $124,000 late last year. San Diego sued Prudential last fall for violating its living-wage ordinance; the case is currently in litigation.
* * *
Prudential signed a two-year, $400,000 contract with Oakland in May 2005, agreeing to comply with the city's living-wage ordinance. Prudential's Milpitas plant in Northern California handled the city's soiled garments. The city independently investigated the complaint filed last July by the union and found that Prudential could not provide proof of how it had documented or segregated the work done specifically for Oakland's contract. Since there was no way to identify who had worked on the contract, city officials decided all employees needed to be compensated for time spent on the contract.
Oddly, when asked about the company's living-wage policy, spokesperson Martin told the Weekly, "When there's a side agreement, you have to segment that work. When you're not able to properly segment that work, it can get complicated when executing the contract. That's why Prudential would not enter into these types of contracts in the first place. . . . Prudential's charter is not to enter into living-wage contracts."
But Prudential did enter into these contracts, signing specific agreements that outlined the provisions for the three cities' living-wage rules, according to documents obtained by the Weekly.
Martin says employees were actually segregated at the Milpitas plant, but he could not explain specifically how or when. "Local operators handle how they segregate the laundry," he says. "I don't get that micro." Requests to speak with the plant manager were denied. The Weeklywas told questions for the plant manager would need to go through Martin. When pressed for responses from the plant manager, Martin said, "It's just not our policy to comment on further pending or past litigation."
Oakland says Prudential could not provide proof that it had indeed segregated employees in the past. "In November 2007, Prudential submitted documentation for the first time showing they were segregating employees," says Oakland deputy city attorney Doryanna Moreno. "Prudential documents indicate that the segregation effort started after the city notified Prudential of living-wage violations."
Oakland determined that Prudential owed workers at its Milpitas plant nearly $40,000 in back wages, which Prudential initially paid. After further investigation and submission of more company documents, the city determined that Prudential owed an additional $78,000 in back wages to 52 workers. Oakland calculated a total of $124,000 owed to employees over a two-year period. After initial protest, the company agreed to settle for that amount this past April, but admitted no wrongdoing in the settlement.
In San Diego, where Prudential had been doing business with the city for 15 years before the ordinance passed, problems arose during contract renewals in 2006, before the union became involved. Prudential argued that its wages-and-benefits package—which included a 401(k) plan and company "profit sharing"—was competitive enough to override the new living-wage requirement.
In e-mails between Prudential officials and city employees from the purchasing division, the city seemed to accept Prudential's logic and asked repeatedly for the documents demonstrating employee benefits. Prudential's Vista plant manager, Bryan Harris, signed two contract renewals, specifically agreeing to abide by the living-wage ordinance, in July and November of 2006.
In January 2007, however, Harris crossed out the living-wage sentence, stating in a fax to the city that he was "not authorized to verify" the company's compliance with the ordinance. He sent an e-mail to the mayor expressing his disappointment over the city's new requirements, saying Prudential would not be able to comply in the future.
When UNITE HERE filed their complaints with the city last summer, San Diego immediately canceled its contracts with Prudential and proceeded with an investigation. The city made requests for payroll documentation and proof of living-wage payments, and then determined the company had not complied with the contract. Prudential said it did not owe back wages and rejected the city's request.
The city attorney's office filed a lawsuit against the company last September, alleging Prudential violated its contractual agreement; the suit, currently in litigation, asked for $1.8 million in back wages and fines. Prudential spokesman Martin would only say, "We deny all allegations, and we're fighting the lawsuit filed with the city, and depositions in this case have commenced." Now, the company's policy is for facility managers to turn over possible living-wage contracts to corporate offices in Irvine for review. "If we can't comply with the ordinance, then we won't enter into the contract," Martin says.
* * *
On a recent, hot morning at the Riverside Prudential plant, the mostly female band of workers are huddled at breakroom tables for a safety-training luncheon. Just beyond them are the hulking washing machines, conveyor belts, wet floor mats and carts full of towels. A slightly bleachy, sudsy smell hangs in the air.
Plant superintendent Robert Elkins says the taco lunch is to thank employees for having completed the training sessions, which were spurred by employees and the union after the sulfuric acid accident in Vista.
Like their co-workers in Vista, Peña and the women around the table say this is the first they've ever received in the way of tailored safety training. The instruction consisted of four 15- to 30-minute sessions that hardly touched on the work that she and her co-workers do, she says. Initially, the videos the women were shown were in English with a Spanish interpreter on hand to translate. But, Peña says, because they felt the interpreter was inadequate, she and others asked that the videos be subtitled, which happened for the next training session.
"The second week of training, they took us to see the washing-machine stations and the drying stations. But we didn't go to our stations," she says of the rest of the facility, which includes the pant- and shirt-press stations, the distribution stations, where clean uniforms are sorted, areas where dirty uniforms are received and towel stations. "Four people out of 72 use the washing machines. . . . I agree we need to be aware of them, but we never went to our area, and we're the biggest group."
"This lunch we had today is because we're done with the safety training. But what did they teach in safety training? Nothing that had to do with what we're doing," says Lupe Valle, a distribution-station worker. "They trained us on rooftop safety, but that's work the mechanic does, not us. They didn't give us training that pertained to our jobs."
Peña and other workers have pressed Elkins and other managers for training that involves the repetitive-stress-related injuries that can often lead to other injuries or accidents, she says.
"We've seen a lot of accidents happen, the death of this señor at Cintas, the chlorine gas accident last year, things that have made us say, caramba, I thought I worked somewhere where these things don't happen, but they do happen at laundries, and we want to feel safe," she says.
Lupe Ortegon, who folds towels and has worked in Riverside for nine years, sits on a safety committee that meets monthly. "We don't have a first-aid kit, and they've promised us one for several years," she says. "We have to stay on top of them for anything to get done."
The least the company could do, says Peña, is pay her and her co-workers the money they were—and are—supposed to be earning under the living-wage ordinances. "It might make the rest of this a little bit more bearable," she says. After nearly 19 years, she makes $9.11 per hour. She says she will no longer tolerate the yearly 10-cent raises she's always received. "We live with constant worry, from paycheck to paycheck, and all the while, I've watched the company grow and grow over the years," she says. "It's good that it grows, but not if it's at our expense."
People ask her if she's afraid, Peña says, if she worries that something will happen to her because she has become so adamant and vocal. "A lot of people are still afraid to say something, and I understand that," she says. "But I've gotten to the point where I am saying, 'Enough.' Maybe because I'm older. I'm alone now, my husband has died, my kids are grown. I've lost that fear. Sometimes I get looks and I see anger in people's eyes, but it's okay. I don't care anymore."
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