Amazon Gets Two Big Wins Against Unionization, Here Is Why It Matters

The preliminary vote count is in and Amazon
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workers have decided not to unionize their warehouse sortation center (called LDJ5) in Staten Island, with only 38% of workers voting in favor of the unionization. This is a big win for Amazon after a surprise loss earlier this month when its other Staten Island warehouse (JFK8) voted to unionize. Amazon has spent much time, money and effort to make sure that what happened at JFK8 did not happen again at LDJ5. The union eligible employee count in LDJ5 is about 1,500 compared to JFK8 which had about 6,000 eligible voters. Meanwhile, in Bessemer, Alabama, the no-union vote remains unconfirmed as both sides, Amazon and the Retail, Wholesale and Department Store Union (RWDSU), have contested hundreds of ballots.

Double win for Amazon

In addition to the win at LDJ5, Amazon had another victory this week when the National Labor Relations Board (NLRB) regional Phoenix-based office agreed to a hearing in support of Amazon’s challenge that the Brooklyn office of the NLRB appeared to be in support of the first union drive in Staten Island JFK8 warehouse, unfairly in favor of Amazon Labor Union (ALU). Amazon stated that labor organizers intimidated workers to vote in their favor along with 25 other allegations. All objections were denied by the ALU. Cornele Overstreet, director at the NLRB Phoenix office, said the evidence behind Amazon’s claims “Could be grounds for overturning the election,” according to a court filing. This process may go on for months, stalling the start of union contract negotiations which typically can take over a year.

What Amazon thinks about unionization

In an interview with CNBC, Amazon CEO Andy Jassy said the company thinks employees are better off not joining a union. Jassy said, “At a place like Amazon that empowers employees, if they see something they can do better for customers or for themselves, they can go meet in a room, decide how to change it and change it,” Jassy said. “That type of empowerment doesn’t happen when you have unions. It’s much more bureaucratic, it’s much slower.” Jassy discussed the importance of workers being able to meet directly with management to express concerns and believes that adding union representation will decrease the empowerment of workers, remove direct connections with the managers and filter communication through one voice. Jassy discussed how today many employees can provide feedback, but with a union, direct communication with management is reduced.

Fair pay, working conditions and benefits

Amazon was one of the first companies to champion the $15 minimum wage which is now up to $18 per hour. The company provides full benefits, a 401K plan, 20 weeks of paid leave and tuition reimbursement for workers that want to get an education. Amazon was ranked number one in the U.S. on LinkedIn’s annual Top Companies list and ranked number two on Fortune magazine’s World’s Most Admired Companies list. Amazon achieved the Top Employer Certification by the Top Employers Institute for 2022 in France, Italy, Poland, and Spain in recognition of Amazon’s quality work environment, professional development opportunities, and programs available to employees. Ironically, as Amazon has rolled out many new employee initiatives like higher wages, educational financial assistance, and added mental wellness benefits over the past year, unionization efforts have risen.

Union contract negotiations specify wages, working conditions and benefits. For companies like Amazon which has been known to pay higher than average wages, subsidize education, and provide generous benefits and overall good working conditions, what is there to negotiate?

Employer of choice

Companies that can have a highly engaging workforce and become “employers of choice” have five successful characteristics which include setting clear goals, open and honest communication, providing growth opportunities, rewarding great performance and providing benefits that show a mutual commitment between employers and employees. When these employment practices fall short, in the eyes of the worker the door is left open for others to step in.

Safe working conditions, especially in warehouse environments, are a top concern for workers. If unsafe conditions or rigorous employee tracking and monitoring of work exist in today’s environment, Amazon will continue to be challenged. The perceptions of good working environments must align between management and employees. When this does not happen, companies are essentially inviting a third party to step in and negotiate these basic conditions.

Unions for retail in decline

While Amazon continues to funnel millions into anti-unionization efforts, it hopes to squash the ongoing efforts of union organizers. As unionization has decreased significantly in the retail sector, many unions see these small battles with Amazon as a way to begin the restoration of union labor at major retailers. Union membership (all sectors) is down in 2021 to 10.3% of workers compared to 2020 when it was at 10.8%. Back in 1983, 20.1% of workers in all sectors were represented by unions. Retail trade unionization was at 4.9% in 2011, declining in ten years to 4.4%. Unions have generally struggled over the past few decades to remain relevant.

Unionization efforts in the retail industry have, in the past, resulted in major changes to some of the most difficult and pressing policies. Paying workers a fair wage, providing ethical working environments and ensuring safe working conditions are all areas where unions have made great progress in retail. As government laws and regulations have spurred more stringent restrictions on these key areas, the need for union representation has declined. Companies that provide good working conditions, pay a living wage, and create safe work environments are lessening the need for workers to rise up and demand union representation.

Lesson learned

Amazon may have well learned its lesson through the JFK8 union drive and the missteps that the company took well before the vote was held. Workers that weigh the pros and cons of unions during a unionization drive are pelted with propaganda from both sides of the aisle. Both unions and companies promise higher wages, better working conditions and benefits that are in alignment with worker needs. At the end of the day, however, it is the worker that will decide if they want to hand over their rights to a union to negotiate for them or if they put their trust in the company to do the right thing.

Amazon Q1 performance short of stellar

Amazon lost $3.8 billion in the first quarter of 2022, mostly attributed to its investment of $7.6 billion in Rivian Automotive. The company, however, did experience slower sales trends than in the previous two years for the same Q1 period with consolidated revenue up only 7% compared to last year’s 44%. Online sales were down 1%, the worst performance of the major business segments. AWS (Amazon Web Services) was the strongest performing segment, with revenue growth of 37%.

Why a union at Amazon is a great concern for management

Union representation of workers generally results in higher operating costs for companies, which eventually leads to higher product or service prices. The millions that might be spent on anti-unionization efforts by a company is a small sum compared to the potential added costs if a significant number of workers unionize; the company structure and hierarchy would become more complicated and decisions would take longer to make, both of which make a highly innovative company less nimble. Although this latest unionization vote involved only a small number of workers at Amazon, the decision not to unionize is a colossal win for Amazon.