Employees at Modesto-based company seek nearly $400,000 in unpaid wage claims
Several former employees of a pallet manufacturing company based in Modesto have accused the employer of longstanding wage theft, claiming they are collectively owed more than $177,000.
Martinez Pallet Services filed for Chapter 11 bankruptcy and workers are intensifying their efforts to recover unpaid wages and ensure their claims are recognized during the restructuring process.
More than 10 employees have reached out to the North Valley Labor Federation with claims of wage theft spanning several months. Workers allege they started facing bounced checks and missed paydays, leading to financial stress and mounting bills.
The company specializes in pallet manufacturing, where workers repurpose scrap wood and damaged pallets to create new ones to sell to other businesses.
Last month, Martinez Pallets Services filed for Chapter 11 bankruptcy, a legal process intended to help businesses restructure their debts while remaining operational. However, the bankruptcy filing does not include any mention of the wages owed to workers.
At a creditors meeting held Tuesday, partial owner Adela Espinoza Sanchez acknowledged the company had bounced numerous paychecks, according to Will Kelly, executive director of the Northern Valley Labor Federation.
“If a worker steals money from their boss, they often go to jail. But when a boss steals money from their worker, they are filing complaints and going to hearings like this, and it is a long, drawn-out, difficult process,” Kelly said, referring to the wage theft claim process.
As of Aug. 1, six workers have filed formal wage theft claims with the Labor Commissioner’s Office. The former employees are seeking a little under $400,000 in claims, which include unpaid wages, penalties for late payments and fees for breaking contracts.
“I am so impressed and inspired by the way these workers are showing up, the way they’re working together, the way they’re supporting each other, and we as the North Valley Labor Federation are here to support them in any way we can and help make sure they get justice,” Kelly said.
Empty paychecks, mounting bills
The alleged wage theft has had severe personal repercussions for many former employees.
Arturo López, a 61-year-old who worked at Martinez Pallet Services for four years, said he and his colleagues repeatedly were promised their owed wages, only to receive partial payments or nothing at all.
“It started getting worse for us,” López said through an interpreter.
On payday, owner Jose Martinez would deliver only half or a portion of the owed amount. The wages owed began to accumulate each week, López said.
He said he would call Martinez four to six times a day to demand his full wages, but his calls went unanswered. The financial strain forced him to quit, and he still has not been paid for several months of work.
The stress of not being able to meet his financial obligations, such as rent and car payments, has been overwhelming, López said. He is three months behind on rent and, given his age, is struggling to secure a new job.
“All you’re thinking about is the next payment that you have to make, and there’s not enough money,” López said.
His daughter, Araceli López, described how the financial strain has impacted her family. Despite repeated attempts to collect the money owed to her father, they received only a fraction of the amount due.
“He owes my father a lot of money,” López, 39, said, fighting back tears. “Bills don’t wait.”
She added that while she’s seen Jose Martinez drive up with a new car, she’s seen her father have to wait in line for free food.
She expressed frustration that a Hispanic man would exploit Hispanic families, who make up the majority of the employees. “He knows that they’re hardworking people because he never got rid of them. He just abused them,” she said.
Pedro Peres, a former supervisor at the company, shared similar frustrations.
After working at Martinez Pallets Services for nine years, Peres had to take on side jobs to make ends meet as his wages remained unpaid.
The financial strain and stress have significantly affected his family, he said. There’s no dining out, and the children have been pulled from sports.
“Don’t let companies get that behind on your money because it’s gonna be harder for you to get back on your feet,” Peres said.
The NVLF is working to ensure that the workers’ claims are recognized and prioritized during the bankruptcy proceedings. Kelly said he believes that many more workers have also been exploited but have not yet come forward.
“These are the people who made the business what it was, did the work, earned the money, and it’s not fair for someone else to get rich off that and not even pay workers the wages that they earned,” Kelly said.
This story was originally published August 2, 2024 at 8:00 AM.
CORRECTION: The story has been updated to correctly identify the company representative who was present at a creditors meeting.
