Amazon.com Inc. (AMZN) agreed to change some of the rules for workers at the Web retailer’s warehouses in the U.S. so that employees can communicate about pay and working conditions without fear of retaliation.
In a settlement reached with the National Labor Relations Board yesterday, the Seattle-based company also agreed to rescind a verbal warning given to a staff member at a Phoenix warehouse who voiced concerns about security in the parking lot following thefts from vehicles. A hearing had been scheduled between the parties yesterday. Bloomberg News obtained a copy of the settlement.
The deal could open the door for Amazon’s workers to unionize, because the settlement requires the online retailer to post notices at its fulfillment centers notifying employees that they have the right to form unions and work with each other for collective benefits. Amazon has faced criticism for conditions faced by workers in its more than 40 facilities around the country, and the U.S. Supreme Court is considering a separate case on whether workers at Amazon’s warehouses must be paid for time spent undergoing post-shift security searches.
Attorneys representing Amazon at the hearing declined to comment following the settlement, which included a statement that the company “does not admit that it has violated the National Labor Relations Act.”
Kelly Cheeseman, a spokeswoman for Amazon, didn’t immediately respond to a request for comment.
The settlement will help to make more people aware of their rights in the workplace, said Zev Eigen, an associate law professor at Northwestern University School of Law in Chicago.
“This is about getting people’s attention on the issue of fairness in employment,” Eigen said. “It makes more people aware of their rights.”
The National Labor Relations Board, an independent U.S. government agency that oversees labor-union elections and investigates unfair labor practices, claimed that Amazon employee Brian Weiss, 54, was reprimanded by managers in April after he voiced concerns during an employee meeting about security in the employee parking lot.
Weiss, who has worked at an Amazon warehouse in Phoenix for six years, said he was called into the human-resources office after the meeting and was told by supervisors that he was being loud and disrespectful. Weiss said he spoke loudly so others could hear him in the noisy warehouse.
Weiss said he felt uncomfortable with how managers handled the situation, prompting him to file a complaint with the labor board, which investigated and found sufficient evidence to initiate action against Amazon.
Amazon’s lawyers and the board spent about two hours negotiating behind closed doors yesterday before reaching a deal. Weiss said he was pleased with the settlement, which allows employees to communicate more freely about pay and working conditions without fear of retribution.
“This is telling Amazon you have to stop bullying people,” said Weiss, of Litchfield Park, Arizona. “Employees have rights and you can’t stomp on them anymore.”
Separately, Supreme Court justices are considering a suit against a company that staffs Amazon’s facilities, filed by former workers in two Nevada warehouses. The lawsuit is seeking back pay for warehouse workers around the country for time they spent on anti-theft security lines as they left warehouses after clocking out for the day.
In 2011, federal regulators investigated an Amazon warehouse near Allentown, Pennsylvania, due to concerns that high temperatures in the facility resulted in many workers going to hospital emergency rooms for treatment. That prompted Amazon to have ambulances on standby in its parking lot.
Still, unions haven’t gained a significant presence in any of Amazon’s U.S. warehouses.
Ahead of yesterday’s hearing, the National Labor Relations Board charged the company of overly broad rules that directed workers to always act “in the best interests of Amazon” and prohibited them from sharing information about one another, in violation of the National Labor Relations Act.
Amazon agreed to rescind the rules in question and clarify the rights of its workers as a result of the settlement.
More than 40,000 Amazon employees work at the online retailer’s U.S. warehouses, packing up books, toys, electronics and other goods for quick delivery. As such, the company’s labor issues are more comparable to brick-and-mortar retailers like Wal-Mart Stores Inc. and Target Corp., which have also faced Labor Board scrutiny for workplace rules.
Amazon has a financial interest in preventing workers from organizing. Median weekly wages for union workers in the transportation and warehousing industry in 2013 were 33 percent higher than their non-union counterparts, according to the Bureau of Labor Statistics.
A union workforce demanding better wages poses a threat to Amazon, which operates on razor-thin margins and is facing investor criticism about its spending. Last month, Amazon forecast sales and profit for the holiday quarter that missed analysts’ projections, underlining the limits to Chief Executive Officer Jeff Bezos’s strategy of spending big to fuel growth.
“Amazon is such a massive company, a ruling against it would send a strong message,” said Andy Marshall, president of Teamsters Local 104 in Phoenix, which has participated in failed union campaigns at an Amazon warehouse there. “It’ll make people less hesitant to speak up and try to make their working situations a little better.”