Employees at Modesto company seek nearly $629K from owner in unpaid wages. More come forward

[Pelican Press 0]

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Employees at Modesto company seek nearly $629K from owner in unpaid wages. More come forward

When Araceli Lopez noticed her father, Arturo, would come home from work without his paycheck, she started to worry.

The 39-year-old and her mother imagined the worst. Was he living a double life? Was he secretly spending his money somewhere?

She decided to follow him to work one day to see what was going on. When she finally confronted him, he told her he was getting paid half in cash and half in checks that bounced.

“My dad never lied to us. He was always saying the truth,” Lopez said.

Arturo Lopez is one of several former employees of

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who have accused the company and its owner, Jose De Jesus Mora-Martinez, of years-long wage theft. Lopez alone said he is owed $109,646 in unpaid wages and penalties in the four years he worked at the company.

Since August, more former employees have come forward, filing formal wage theft claims with the Labor Commissioner’s Office. In total, nine employees are seeking $628,695 in unpaid wages from Martinez Pallet Services.

The company has since filed for Chapter 11 bankruptcy and submitted a reorganization plan, laying out how it intends to continue operating while paying off its debts. Under the plan, Martinez Pallet Services will remain in business and repay creditors—including former employees claiming wage theft—over the next five years, relying on its operational profits to meet those obligations and avoid liquidation.

The workers, through the help of the North Valley Labor Federation, have rejected the plan, claiming it is unfeasible and fails to account for the company’s “significant civil liabilities resulting from its ongoing and willful pattern of labor law violations.”

At a U.S. Bankruptcy Court hearing Feb. 20, the former employees urged Judge Ronald H. Sargis to clarify the timeline of their case and asked for assistance. Some shared how they’ve struggled to find work since leaving the company.

Because the former employees rejected the initial reorganization plan, a revised plan is not expected until June or July.

An attorney representing Martinez Pallet Services said that, due to the active bankruptcy filing, the company is reserving comment at this time.

“We’re keeping the people on track. But again, nothing in the court system moves rapidly,” Sargis told the group. He also suggested the former employees consider finding an attorney and splitting the cost among themselves.

Will Kelly, executive director of the Northern Valley Labor Federation, said they are working to secure legal representation, but finding an attorney has been challenging. Few lawyers specialize in cases like this, and those who do can be costly.

The workers are hoping to find an attorney willing to take the case pro bono.

“I know it’s taking so long, and I hope everyone’s really proud of what you all have accomplished, like sticking with this, working as a team. If it wasn’t for what you all have done, they would have just skated through this,” Kelly told the group in the NVLF office after the Feb. 20 hearing. “They’d have their plan confirmed. They’d be onto the next thing, they’d be stealing from more people.”

Caitlin Vega, general counsel for the California Federation of Labor Unions, submitted a

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in January expressing support for the workers and accusing Jose Martinez of committing widespread violations of state labor law, including the misclassification of workers as independent contractors.

“In addition to penalties available for unpaid wages, Labor Code Section 226.8 also provides penalties of up to $25,000 per violation for employers engaging in a pattern and practice of willful misclassification,” reads the letter.

Vega’s letter was included in the objection exhibits filed with the court.

More employees continue to file claims, including some as recently as February. One such employee, Felipe Barcenas Zuniga, alleges he was fired in retaliation for requesting his overdue paycheck. He also claims he was never informed that he was classified as an independent contractor, as he does not operate an independent pallet-making business.

Another employee, Ismael Peres, claimed Martinez offered him a notarized letter promising to pay off his claim in $1,000 weekly installments if he withdrew his claim from bankruptcy. Martinez never provided him with a copy of the letter or made any payments, Peres stated.

Kelly said some of the workers, for immigration reasons, have trouble finding other jobs. He said he believes Martinez knows that and preys upon it.

Lopez noted that many of those Martinez has exploited are older individuals who never refused to work overtime, even in harsh weather conditions with some of the work being done outside.

Worker experiences

Lopez said her father used to spoil her mother, but that’s no longer the case. As much as she tries to support her parents, she also has two daughters of her own to care for.

Martinez “put my family in a bad situation, and I hate him for this. I really do hate him. Like, how can he harm somebody like that? How can he harm so many families?” she said.

Sergio Larios began working at Martinez Pallet in February 2020. By March 2023, he started noticing that his pay became inconsistent.

He said he would confront Martinez, but each time he was given an excuse.

As a result, Larios maxed out two credit cards and drained his savings to cover his living expenses. Fortunately, he was eventually able to find a new job and regain control of his finances. However, the experience has made it difficult for him to trust future employers.

Many of his former coworkers are still struggling to find work, he said.

“Something else that’s really important that I want to see come out of this is that he doesn’t do this to anyone else. That would be very important for this case,” Larios said in Spanish, through an interpreter.

Felicitas Molinas said she has been unable to find another job since leaving and is on the brink of losing her home. In the meantime, her children have been helping support her as she continues to search for work. She noted that applying for jobs online has been a challenge for her.

“I’m used to paper applications, and I would go in and ask for one, fill it out and wait for a call. But it’s not like that anymore, and that’s difficult for me,” Molina said through an interpreter.

She said she had been hearing about people not getting paid for some time, with checks bouncing regularly.

From this experience, she’s learned the importance of coming together, finding support and staying united. She remains hopeful that former employees eventually will get the money they are owed.

Pedro Davalos said there were times when he would receive consistent pay, followed by stretches with no payments at all.

After leaving, he found work driving trucks for a tomato company, but only seasonally.

Diana Diaz, lead organizer of NVLF, asked if his perspective had changed now that he had learned more about his rights as a worker.

“Yeah, I won’t be working with Jose Martinez anymore,” Davalos said, through an interpreter.

The Stanislaus County District Attorney’s Office told The Bee on Friday that the matter has since been referred to its Bureau of Investigations.

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