San Jose Considers Controversial Wage Settlement with Republic Services, Newby Island Landfill

San Jose may be close to resolving a drawn-out legal fight with its recycling contractor over how to enforce the city’s living wage policy. At the heart of the dispute is the question of how to define “employee” in the modern workforce.

But the City Council on Tuesday may ask for more time before it makes a decision about how to settle the case with Republic Services, the $9 billion company that runs the Newby Island landfill on the border of Milpitas.

According to San Jose’s Office of Equality Assurance, Republic Services shortchanged 193 workers nearly $2.6 million in 2012 and 2013. That’s because the multinational corporation insists that its subcontracting temps from Leadpoint Business Services weren’t named in a franchise deal signed with the city, thus making them exempt from San Jose’s living-wage policy.

The federal National Labor Relations Board (NLRB) took an expansive view of joint liability in 2015 when it ruled that a company could be considered an employer if it has even indirect control over workers. The U.S. Court of Appeals is mulling that decision, which stemmed from a lawsuit brought by Teamsters against Leadpoint.

Meanwhile, San Jose has to decide whether to settle a separate complaint that those same contractors weren’t cheated out of a living wage.

The proposed agreement before the council this week would affirm Republic’s claim that the workers are not employees, but subcontractors for a third-party waste hauler. City Attorney Rick Doyle said the settlement allows the workers to get some of the money they were owed while avoiding another legal battle.

“First, the sorters and housekeepers at the recyclery will receive some restitution in wages sooner rather than later,” Doyle wrote in a memo to the council. “Long and protracted litigation would have thwarted this goal. Second, the sorters and housekeepers will earn more than the minimum wage in the near term. This goal would likewise have been thwarted by long and expensive litigation.”

Council members Don Rocha, Raul Peralez and Sergio Jimenez asked for further analysis on the matter.

“As a City Council we must continually preserve our living wage policy by emphatically opposing attempts to circumvent it,” they wrote in a shared memo.

In a sharply worded letter, Rome Aloise, president of Teamsters Joint Council No. 7, warns the city that accepting the settlement as presented would allow Republic to sidestep the local wage ordinance and the NLRB’s landmark precedent. As proposed, the settlement would allow Republic to get away with confirmed violations without having to pay any fines and only paying partial restitution.

It would allow the company to continue classifying trash haulers as subcontractors exempt from the city’s living wage standards. It would also align San Jose with President Donald Trump, he added.

“With this settlement, San Jose is taking a giant step backwards and bringing itself out of sync with the new state laws and Obama-era federal rulings that establish Republic Services as being jointly liable for these workers,” Aloise wrote. “In fact, your settlement will align the city with Republican-led Congress, the National Chamber of Commerce and Trump appointees to the National Labor Relations Board.”

Under San Jose’s living wage policy, companies that work with the city have to pay their workers about $21 an hour if they get no health benefits. The settlement would require the Newby Island haulers to make about $17 an hour and kick two-thirds of the tab onto the rate-paying public.

Ruth Silver-Taube, head of Santa Clara County’s Wage Theft Task Force, warned that the settlement would create a two-tier workforce and reward a proven violator for finding a way around the city’s wage laws.

“If the city makes an exception in this case, there will be pressure in [the] future to make further exceptions, and the living wage provisions will be seriously compromised,” she wrote. “And make no mistake, it is an exception.”

More from the San Jose City Council agenda for August 22, 2017:

  • Internet of Things. As part of its rollout of internet-connected devices atop streetlights and other public infrastructure, the city plans to hire a firm to help a detailed strategy for building a viable “Internet of Things.” The council will vote on a $200,000 contract with PricewaterhouseCoopers (PwC) to draft a policy and roadmap for realizing its goal of becoming a digitally connected “Smart City.”
  • Park ranger pay. City park rangers may get a pay raise. The council will vote on whether to bump up the top of the salary range to up to $94,099 for supervisors, $85,571 for senior rangers and $77,771 for rangers. A District 1 resident named Doris Livezey wrote in support of the pay raises. “Rangers are important to our parks,” she wrote to the council. “They interact with the public and hopefully develop a communication with the young people. They are able to report concerns in a timely manner. Improved salaries are important to retain the trained rangers. They earn less than the competition at nearby cities. We’ve seen what happens when police are trained and then leave for higher salaries, We don’t want Park Rangers leaving for better pay. Thus, a career ladder will give them something to strive for and allow them to grow professionally.”

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

2 Comments

  1. Fundamentally this about moving the goal posts after the game as started. Republic wouldn’t care if CSJ agreed to reimburse them for retroactive pay to those not covered under the living wage ordinance. Both entered into a contract on July 1, 2012 with an understanding of the definition of an employee. Then the NLRB changed its interpretation as did the City. The “wage theft” charge falls squarely on the CSJ – they are attempting to extort money from Republic.

    None of us would be happy to pay a retroactive invoice 3 years after work was completed.

  2. For the record, the landfill is entirely in San Jose, NOT Milpitas! The access road to the landfill, Dixon Landing is from Milpitas. Please update the article. Thanks.

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