Investigative Reporter: Temp agency workers detail pressure to discriminate at Alabama-based temp ag
By AL.com
Editor's note: This story was written and produced by Reveal, a national public radio show, podcast and website dedicated to investigative reporting. Reporter Will Evans can be reached at wevans@cironline.org. Follow him on Twitter: @willCIR. Learn more about Reveal at revealnews.org and subscribe to the podcast on iTunes.
By Will Evans, Reveal
By all accounts, Automation Personnel Services Inc. aims to please its customers.
For just over a quarter-century, the Alabama-based temp agency has provided temporary workers to industrial companies and warehouses in the South, and its dedication to clients shines through its motto: "We built our success helping you succeed."
But that focus on customer service can be treacherous. When its clients wanted to hire temp workers based on race, sex or age, Automation was happy to oblige, according to dozens of former employees.
Often, the practice was blatant. A manager at a Georgia manufacturing plant asked Christie Ragland not to send him "any black thugs," she said. Ragland, a former Automation office manager until early 2015, said her boss told her to give the client what he wanted. And in Memphis, Tennessee, Josie Hernandez said her branch manager would comment, "Don't hire that damn nigger," and ordered her to send only Latinos to a flower delivery company.
Other times, Automation staff members used veiled language. At the company's Chattanooga, Tennessee, branch, a request for white men was known as an order for "country boys," according to three former employees.
Whether it was a preference for Latino workers or for whites only, the people on the losing end usually were black, according to former employees at branches in six states.
Automation would send out black workers – to the employers who would accept them, former employees said. Sometimes, they were channeled into inferior positions. And if there wasn't an opening at willing companies that day, black workers would be out of luck.
As tensions mount over racial injustice in America, Reveal from The Center for Investigative Reporting found a pattern endemic to the temp industry of racist, sexist and otherwise discriminatory hiring – a practice the top federal regulator acknowledges is growing and difficult to combat.
In Baton Rouge, Louisiana, former Automation recruiter Vicki Anselmo said employers always got what they wanted, whether it was clean-cut white men or black men without tattoos or skinny women.
At an Automation branch in Houston, Jaime Herrington said she was told to have workers come into the office under the ruse that they needed to pick up a map to the job location. In reality, it was to find out the job seeker's skin color.
"If they were black," Herrington wrote in a LinkedIn message, "we had to tell them the job was cancelled or already filled by another recruiter."
And near Dallas, Vicky Parker said male managers looking for administrative staff often would ask for a woman – specifically a white woman, preferably in her 20s, unmarried and without children. Parker said her boss at Automation readily would consent.
"Whatever the customer wanted, we did," said Candie McDermott, who oversaw a team of recruiters as office manager of the Huntsville, Alabama, branch until November 2014. "And you didn't ask questions, you just did it."
Temp agencies like Automation Personnel Services are booming. The industry is at an all-time high of nearly 3 million workers a month, up from just over 1 million in 1990. In terms of jobs, it's among the fastest-growing sectors in the country, according to a government analysis.
Reveal found similar accounts of systemic discrimination at two dozen other temp agencies across the country, in government and whistleblower lawsuits and in interviews with people who worked at many levels: as recruiters, sales representatives and managers.
Researchers and government officials say hiring discrimination is a particular problem in the industry. Temp agencies face financial pressure to please their customers. Employers sometimes think they can get away with it if a temp agency does the dirty work for them. Temp workers, replaceable on a whim, are especially vulnerable. And with multiple companies intertwined, it's hard to prove claims of discrimination.
"Staffing agencies are refusing to place African American employees based on their race," said Jenny Yang, chairwoman of the Equal Employment Opportunity Commission, "and they are terminating employees when they complain about that, as well as limiting assignments that individuals may have."
For many temp workers, though, it's impossible to know why they didn't get placed, so they rarely file complaints.
Tim Cooper was desperate for a job – any job – when he applied at Automation's Chattanooga branch a few years ago. He was crushed, he said, that he never got a call back. It came as a complete surprise when Reveal told him that a former Automation recruiter said Cooper was rejected because he's black.
"It's very shocking, because you would think those days are over with," he said. "When they toss them résumés, they toss a whole lot of families out. It just don't hurt that person, it hurts the people who are connected with them."
In the industrial sector in which Automation specializes, low-paid temp workers toil on assembly lines, pack consumer products at giant warehouses, build concrete structures or clean equipment. The blue-collar positions can be jobs of last resort or a foot in the door for people with a weak résumé or criminal record.
Stephen Nordness founded Automation Personnel Services in Birmingham, Alabama, in 1990. He's expanded the private company to 32 branches across the South, from Texas to Florida, with one offshoot in San Diego. The company places some 30,000 temp workers a year and brought in $180 million in revenue in 2014, according to the firm.
After declining repeated requests for an interview, Nordness responded with astatement that said: "We have a very strict, zero tolerance policy against discrimination. It isn't just illegal, it's immoral."
Nordness calls his policy "Steve's Rule." If any employee gets caught discriminating, the entire office is subject to termination.
In a speech he gives to new employees, Nordness claims to have fired a whole branch once. It's something of a legend at Automation. When asked for details of that mass firing, however – date, location, reason fired – company Vice President Randy Watts said he couldn't recall.
Automation provided statistics showing that more than half of its overall workforce is black, as much as 57.4 percent in 2015. Aggregate numbers, however, don't address the crux of the issue described in detail by former employees: that the company is blocking workers – based on race – from specific positions.
Around the country, other temp agencies have used code words to filter workers by race, age and gender, according to interviews and lawsuits brought by former employees.
In New Jersey, blacks were called "number 2s." In Illinois, "Code 3" meant a Latino worker. A Texas temp agency called whites "blue eyes." An Ohio agency called them "vanilla cupcakes," "hockey players" or someone "like you and me." Another agency owner in Alabama was accused of running her finger along her own white cheek to indicate a preference for whites.
At Automation, many former employees said they didn't use codes for race at all. But in the Chattanooga branch, at least, one supervisor tried to be subtle.
Anastasya Istomin worked as an Automation staffing coordinator from 2013 until last May. Her job was to interview applicants and find a good fit when an order came in for temp workers.
But an Automation sales rep, who would get requests from customers and pass them to Istomin, had a particular way of calling in the orders.
"She called me on the phone ... and said that they wanted, you know, the usual – country boys," Istomin recalled.
Istomin said the sales rep, Teresa Clark, told her "that they liked white guys over there and not to send anybody black."
Istomin, her sister Oksana – who also worked as a staffing coordinator – and a third colleague, Keara Parks, said Clark often requested "country boys" for her clients.
When Anastasya Istomin assigned a black worker to a job Clark told her was reserved for "country boys," she said she had to call the man back and tell him the order was canceled.
Reached by phone, Clark said, "I have no idea what you're talking about," and hung up.
Automation's corporation counsel, Kelly Breckenridge, said she spent more than 30 hours investigating Reveal's findings and did not uncover any evidence of discrimination at any of Automation's branches.
"I'm not an easy person to get around, believe me," Breckenridge said. "I can say with confidence that (Automation) does not discriminate."
After this story was published online earlier this month, Automation provided a statement to an Atlanta radio station, stating, "Now, that we have more information, we will launch another neutral and voluntary investigation."
Job seekers filtered out
Workers know when they're being harassed on the job, but it's much harder to figure out why they didn't get hired in the first place.
Like a lot of applicants for temp work, when Tim Cooper walked into Automation's storefront office in Chattanooga and filled out an application, he had some serious counts against him.
Cooper said he had been struggling to pull himself out of trouble in the streets, which included a felony conviction for extortion. He learned welding at a community college, but said he dropped out before getting his certificate. He had two children, living with different mothers, to support.
"I was broken," said Cooper, now 30. "I felt like, 'Hey, it's time to work, it's time to provide the right way.' "
Cooper said he checked back with the Automation office a couple of times but never got an assignment. The rejection, he said, was a breaking point.
"If you're not strong enough to rely on God, then you just go back to the streets," he said. "At that time, I wasn't strong enough."
Keara Parks says she knows why Cooper didn't get a job. Parks, a recruiter at the Chattanooga branch at the time, knew him from their hometown and considered him a friend.
Parks also knew about Cooper's criminal record, but she said it didn't disqualify him from a basic welding position she had to fill for a construction company in 2013.
So Cooper was included in a handful of qualified résumés Parks says she took to Clark, the sales rep. Before she left, Parks said, the sales rep asked her if any of them were black. Parks said yes, identifying Cooper. She said Clark threw away his résumé.
"It was like a smack in my face," recalled Parks, who also is black.
Automation's lawyer disputes Parks' account. Breckenridge said she found no evidence that it happened. The job order Parks described didn't exist, and the company normally doesn't fill welding positions at construction sites, she said.
Parks, though, is adamant that in this case, a qualified worker was eliminated based on his skin color alone. Parks was fired in 2014.
The Istomin sisters remember how upset Parks was as she told the story just after it happened. Parks was in tears, Oksana Istomin recalled.
It was 2013 when Oksana Istomin decided to force the issue. She got a last-minute order for a worker to package ammunition at Chattanooga Shooting Supplies. The weapons wholesaler was one of the businesses that wanted "country boys," according to the Istomin sisters and Parks.
But on that day, the only person willing and ready to go on short notice was not white, Oksana Istomin said.
"He had the experience, he was dressed appropriately and he could go right then and there," she said. "He fit the perfect criteria for what they were looking for except for one thing – he was Indian."
Istomin said her branch manager, Tammy Gross, called her into an office. She said Gross told her, "I don't think it's a good idea to send him. ... They prefer somebody, you know, who's white."
Istomin said she told Gross that she would send the man anyway unless she received orders in writing. She said she even invoked the company owner's explicit policy against discrimination: Steve's Rule.
Gross relented and let her send the man, Istomin said. Within a week, she said, Gross came up with an unrelated excuse to fire her – supposedly for not showing up at a worksite.
"I learned a lot in this industry," Istomin said. "And I know exactly what I'm willing to do and what I'm not willing to do, and it took me working there to realize that."
Jeff Autry, a manager at Chattanooga Shooting Supplies, said he didn't request white workers and repeatedly referred all questions to Automation. Gross said in an interview that her branch never discriminated.
"You're chasing a dead horse," she said. "It's not true at all."
It wasn't the first time Gross had been accused of such things, however. In 2012, Yolanda Wade, who worked as a staffing coordinator in Chattanooga, filed suit against Automation, accusing the company of creating a racist, sexually offensive workplace. Among many other accusations, Wade said Gross told her to send only white workers to one customer. Wade lost her lawsuit after a judge determined in 2014 that her allegations didn't rise to the legal standard for a hostile work environment.
Discrimination in the name of customer service
Temp agencies are service providers. They handle payroll, workers' compensation claims and dismissals when workers no longer are wanted or needed.
But some employers look to temp agencies as a convenient way to discriminate as well, said Marc Bendick, a Washington economist and consultant who studies discrimination.
"They know the workforce they want, but they don't themselves want to violate workplace discrimination laws. They want clean hands," he said.
A study Bendick conducted in the 1990s found discrimination against black job applicants two-thirds of the time at temp agencies. That was nearly twice as high as when the testers applied directly with employers.
Stephen Dwyer is general counsel for the industry's trade group, the American Staffing Association. He said discrimination is not more common at temp agencies and is bad for business because it narrows the pool of qualified candidates.
"I think that it's very much a small minority of the industry that engages in this practice," he said. "Certainly, the majority of our members act, or strive to act at least, in a law-abiding manner."
At Automation, the pressure to bring in new business and hit sales goals was brutal, according to Sandra Swearingen, who was a branch manager in Decatur, Alabama, in 2012 and 2013. Swearingen said she always turned down requests to discriminate and once lost a customer over it. But, she said, an ambitious manager with less integrity might not make the same call.
"You have plenty of opportunity to make the wrong decisions," she said.
When it comes to gender, code words pop up at some Automation branches and other temp agencies around the country. A "heavy" or "heavy lifter" is a man, while a "light" is a woman. "Small hands" denotes a woman's job.
Tammy Gross, the Chattanooga branch manager, wrote her staff an email in 2013 requesting "4 people (small hands) to pack boxes and fold leaflets," according to an email provided by a former employee. The recruiters submitted four women's names. Asked about the email, Gross said "small hands" means "you don't have to be a heavy lifter ... it has nothing to do with gender."
The Equal Employment Opportunity Commission has filed at least 10 lawsuits in the past decade accusing temp agencies of systematically filtering out workers based on sex, race or age.
One, filed in 2014, said Nakia Sanford went through a Memphis temp agency to get a position at a FedEx distribution center across the Mississippi state line. Temps were supposed to be picked on a first-come, first-served basis, so she showed up early in the morning to sign in. But the temp agency supervisor, according to the suit, prefilled the sign-in list with Latino names and sent out Latino workers who arrived after Sanford, who is black. That lawsuit is ongoing.
Employment commission's secrecy
There are no federal criminal penalties for participating in employment discrimination. And beyond the lawsuits, figuring out exactly what the Equal Employment Opportunity Commission is doing about the problem is hard to assess. By law, every complaint the commission receives, and its investigation, is secret unless it goes to court. Less than 1 percent of all complaints it receives make it that far, commission statistics show.
In fact, commission officials can face criminal charges for disclosing information about even confirmed cases of discrimination. In contrast, other federal labor agencies routinely release information about their investigations and findings.
The confidentiality, commission officials say, can encourage companies to resolve problems quicker. But the upshot for a company is that as long as it settles before litigation, it's as if nothing happened.
The commission never has sued Automation Personnel Services. The number of complaints filed against the company and whether the commission found problems is all confidential.
But federal officials have known of problems at Automation since at least 2011, when a former recruiter named Daniel Brown filed a complaint with the commission's Atlanta office. It shows up in a lawsuit he brought against the company.
Brown, who is white, notified the commission in 2011 that his manager in Automation's Morrow, Georgia, office instructed him to send only young white men to a concrete manufacturer.
Later, a black worker complained in writing that he was subjected to racist taunts at an airline warehouse where he was placed by Automation. Brown's manager threw the complaint in the trash and told him only whites should be sent there, according to Brown's complaint.
Instead of taking up the case, the commission granted Brown his own right to sue. Automation denied discrimination, claimed Brown was fired for inappropriate office behavior and settled in 2013 under confidential terms.
'We need some more Mexicans'
While Automation serves many regional companies, one of its biggest customers in Huntsville, Alabama, is the multinational LG Electronics Inc. It's such a big client for Automation that the company assigns a staffing coordinator to work on-site.
LG's operation there is a series of giant, flat buildings that occupy an industrial park next to the Huntsville International Airport.
Through Automation, LG wanted temp workers for its warehouse – but not just any workers.
"They had to be Hispanic," said Candie McDermott, the former Automation office manager.
Four other former Automation employees also said LG specifically wanted Latinos.
Requests were coming directly from an LG warehouse manager, said Sandra Keith, who occasionally filled in for the on-site coordinator during her time as an Automation recruiter.
"He would just flat out say, 'Hey, we need some more Hispanics,' or 'Hey, we need some more Mexicans over here, you guys got any?' " Keith said.
Qualified black and white job seekers didn't get jobs there as a result, said Keith, who left in 2013 and now works as a medical assistant.
Both Keith and McDermott said the branch manager, Allison Bevelheimer, brushed off their concerns.
Automation denied any discrimination and praised the two firms' 14-year partnership in a statement from Bevelheimer and company President Stephen Nordness.
John Taylor, LG's vice president for public affairs and communications, said the electronics giant investigated in response to Reveal's inquiry and found no evidence of a problem.
"It's just not true," he said. "If we did find that this was going on, it would be dealt with swiftly and strongly."
Taylor did say the warehouse workforce of about 100 temp workers is predominantly Latino. Automation pegged it at 75 percent Latino and 18 percent black. Both companies pointed to a large number of Latinos in the area.
"That particular customer you're referring to is in an area that's demographically more Hispanics than any other," said Automation's attorney, Kelly Breckenridge.
There are specific neighborhoods with a high concentration of Latinos in Huntsville. But census figures from 2010 show that less than 5 percent of the area's overall population was Latino.
That indicates a problem, according to Cedric Herring, who studies workplace diversity as a professor of sociology and public policy at the University of Maryland, Baltimore County. It is "extremely unlikely that you could have those kinds of numbers without there being some pattern of discrimination," he said.
Keith was upset by her branch's discriminatory hiring and said her manager was in on it. But she didn't know what to think of Nordness, the company president. He would insist that he didn't tolerate discrimination, and he seemed serious, she said. But what if he wasn't?
There was a time a few years ago when Nordness visited her branch, Keith recalled. The workday over, staff gathered in the lobby where job seekers fill out applications. Nordness told them that he would fire the whole branch if he discovered any discrimination.
As Nordness spoke, Keith found herself wondering, "Is he just saying this to cover his butt, or does he not understand what's going on?"
The next day, Keith said, a supervisor assured the rattled staff that no one was going to come in and fire everybody. And no one ever did.
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