Silicon Valley Start-Up Paid Workers $2.66 Per Hour...In Pesos

By Elisabeth Parker

“It wasn’t right what they were doing. It’s not the way to treat people,” an anonymous former contractor told San Jose Mercury News Reporter Eric Kurhi on February 7th, when asked why he blew the whistle on Bloom Energy. As previously reported by Kurhi, the leading Sunnyvale, CA clean energy start-up had been underpaying 14 Mexican contract workers for two years, at the equivalent of $2.66 per hour in pesos. Not only does this compensation fall below California’s minimum wage of $8.00 per hour, it’s also far below the $11.48-$24.01 per hour welders — like these workers — earn in the Golden State. Oh, and the workers often toiled over 50 hours per week and received no overtime pay. Kurhi’s colleague Brandon Bailey also reports that the workers were here on visitors’ visas, “which generally don’t allow [visa] holders to work while they are here.”

The U.S. Department of Labor’s Wages and Hours division — via signed court order from U.S. District Judge Lucy Koh — ordered Bloom Energy to pay $31,922 in back wages, $31,922 in damages, and $6,160 in civil penalties ($70,004.00 total). The Department of Labor requires minimum wage and overtime to be paid regardless of the workers’ immigration status. Ruben Rosalez, a regional Labor Department administrator told reporters in a press release:

“This investigation has remedied illegal pay practices for a group of workers subjected to substandard wages. It is appalling that this was happening right in the heart of Silicon Valley, one of the wealthiest per capita areas in the U.S.”

Bloom Energy released a statement promising not to let this happen again, but not explaining why they thought they could get away with such blatantly illegal and abusive practices:

“We take full responsibility for this and have paid back wages, damages and fines … Furthermore, we are correcting and strengthening our internal processes to ensure that this does not occur again.”

The whistleblower — who remains anonymous so as not to risk future employment opportunities — also told Kurhi, that he had overheard workers complaining amongst themselves, including one who lamented, “I don’t know why I came up here. I could be down there making the same money and be with my family.” The workers had been transported back and forth between Bloom Energy’s factory in Chihuahua, Mexico and the Silicon Valley plant. When staying in Sunnyvale, the workers were put up in a hotel and provided with a $50 a day per diem for meals, but were required to return any money they didn’t use. The workers’ sub-standard wages were wired to their bank accounts in Mexico.

Susana Blanco, director of the U.S. Department of Labor’s wage and Hour Division in San Francisco told Nadine Natour from NBCLatino that “We were surprised that it was happening in the heart of the Silicon Valley, which is known for its high-paid salaries.” Yet she also seemed to enjoy playing a part in creating a much happier kind of surprise. When asked how the workers responded to the court decision, Blanco responded, “They were surprised … they were very surprised, because they thought they didn’t have any protection in the United States.”

Bloom Energy launched in 2002 cutting-edge, energy-efficient fuel cell batteries for high-profile corporate customers, including Walmart, Staples, AT&T, FedEx, Coca Cola, Kaiser Permanente, Adobe, ebay, and Google. The celebrated venture capitalist John Doerr, and former Secretary of State and Retired General Colin Powell serve on their board of directors.