I currently work at the only local lab left in our area. I can certainly attest to poor treatment of the level described or even worse. However, not all of it can be blamed on the employees.
The first issue at hand is the size of our work space. Two people are crammed into a tiny retail space in our local mall - approximately half the size of our previous location that was swallowed by the building of a Barnes and Noble. In this space we do not have room for another set of hanging racks between scanning and cutting the negatives in our workflow. Thus the film is placed on top of the machine (luckily a paper envelope is between most of the exposures and the surface). The negative cutter is place on a counter too low to the ground and anything over 27 exposures drags while cutting. It is also an awkward level to cut, so the accuracy of negative cutting has gone down. Our fine employer also found the cheapest possible negative sleevings (after getting used to a few years of nice quality AGFA sleevings) and as such negatives often jam between the feed area of the cutter and the sleeving - leading to miscuts and most likely scratches.
Our minilab's densitometer isn't balancing paper properly - especially large papers. Everything has a color cast and sometimes it is very apparent (even after attempting to correct it). Currently our C-41 processing is terrible. It is so terrible that I am considering bringing my own C-41 to the local CVS rather than processing it at my place of work. I don't know a ton about the details C-41 processing, but often the color balance is so highly shifted on neutrally lit outdooor photographs that I can't blame it on the camera or film (bright blues tend towards bright cyan in some frames with an overwhelming amount of unnatural red as well). I assume it is a chemical problem at hand - spent developer or the like. However, I have neither the knowledge or the resoures to fix these problems on my own.
The issues stem from one central problem: the boss doesn't care. Though he will raise hell if he thinks an employee has done something wrong, he has done nothing to fix the ongoing and very obvious problems with both our processer and minilab. As long as customers keep forking over money, the end product seems to matter little to him. Employees have complained about all these issues and nothing has changed. We run AGFA machinery and ever since AGFA went under tech work has become much more expensive. As such he is far more likely to attempt to half fix something on his own and call it good. On top of that, he has such a pompous and condescending attitude that new employees are afraid to deal with him for fear of ridicule - thus another layer of problems continue without solution.
Just a small tale from the other side. I hate charging customers (much more than other labs mind you) for an inferior product. However, I know if I left the place things would only get worse. Certainly some employees don't care, but some honestly do and have no resources to fix your qualms. Next time things aren't right and you are angry, go to management. The employee behind the counter has probably been yelled at enough - I know I certainly have.