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The Blue-Collar Hellscape of the Startup Industry

Tuesday, December 5th, 2017

On November 13, Marcus Vaughn filed a class-action lawsuit against his former employer. Vaughn, who’d worked in the Fremont, California factory for electric automaker Tesla, alleged that the manufacturing plant had become a “hotbed for racist behavior.” Employees and supervisors, he asserted, had routinely lobbed racial epithets at him and his fellow Black colleagues. 

Vaughn said he complained in writing to the company’s human resources department and CEO Elon Musk, but Tesla neglected to investigate his claims. In true tech executive fashion, Musk deflected Vaughn’s misgivings, shifting the blame to the assailed worker. “In fairness, if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology,” he wrote in a May email. In late October, according to Vaughn’s suit, he was fired for “not having a positive attitude.”

The news of rancorous working conditions for Tesla employees is merely the latest in a series. Vaughn’s case signals the broader social and physical perils of couching traditional factory models within the frenzied, breakneck tech-startup framework of high demand, long hours and antipathy toward regulation.

Tesla’s Fremont facility has bred a number of allegations of abuse, from discrimination to physical harm. Vaughn’s is at least the third discrimination suit filed this year by Black Tesla workers alleging racism. A former third-party contracted factory worker, Jorge Ferro, has taken legal action to combat alleged homophobic harassment. The cruelty wasn’t strictly verbal: Not long before, in an ostensibly unrelated but similarly alarming turn of events, reports surfaced that production-floor employees sustained such work-related maladies as loss of muscle strength, fainting and herniated discs.

In response to Ferro’s allegations, Tesla told In These Times that it “takes any and every form of discrimination or harassment extremely seriously.” But the company denied responsibility on the grounds that Ferro was contractor, not an employee.

Tesla’s factory conditions evoke those reported at another Silicon Valley darling: Blue Apron. In the fall of 2016, BuzzFeed detailed the consequences of the lax hiring practices and safety standards governing the food-delivery company’s Richmond, Calif. warehouse. Employees reported pain and numbness from the frigid indoor temperatures and injuries from warehouse equipment. Many filed police reports stating co-workers had punched, choked, bitten or groped them, amid threats of violence with knives, guns and bombs.

At the time of these complaints, both companies had fully ingratiated themselves to investors. Tesla’s reported worth is so astronomical even the most technocratic corporate mediaand Musk himselfquestion it. Blue Apron, which went public this year, snagged a $2 billion valuation in 2015. (Blue Apron has since seen a marked decline, a development that maybe have been spurred by BuzzFeed’s report.) As a result, both companies have habitually placed escalating pressure upon their employees to generate product, their executives eyeing the potential profits.

Predictably, these companies’ legal compliance appears to have fallen to the wayside in the name of expediency. Tesla and Blue Apron factory employees have found themselves working 12hour shifts, in some cases more than five days a week. Tesla employee Jose Moran wrote of “excessive mandatory overtime” and “a constant push to work faster to meet production goals.”

In 2015, Blue Apron appeared to violate a litany of OSHA regulations, ranging from wiring to chemical storage. It also hired local temporary workers via third-party staffing agencies—likely to circumvent the costs of such benefits as health insurance. As BuzzFeed noted, these staffing agencies independently screened candidates in lieu of internal background checks. Compounding the problem, the company expected temps to operate machinery they were unqualified to handle. (Blue Apron has since euphemized its OSHA violations and claimed to have axed these staffing agencies. The company has not responded to requests for comment.)

Aggravating an already fraught atmosphere, the companies appear to have used punitive tactics to coerce laborers into greater productivity. While some Tesla workers are placed in lower-paying “light duty” programs after reporting their injuries, others are chided for them. One production employee, Alan Ochoa, relayed to the Guardian a quote from his manager in response to his pain complaint: “We all hurt. You can’t man up?”

Equally culpable is e-commerce goliath Amazon. Bloomberg reported that the company mounts flat-screen televisions in its fulfillment centers to display anti-theft propaganda relating the stories of warehouse workers terminated for stealing on the job. (This offers a blue-collar complement to the 2016 New York Times exposé on its draconian treatment of office employees.) According to a former employee, managers upbraid workers who fail to pack 120 items per hour, heightening their quotas and, in some cases, requiring them to work an extra day. Those who don’t accept overtime shifts, meanwhile, lose vacation time.

Amazon told In These Times, “We support people who are not performing to the levels expected with dedicated coaching to help them improve.”

It’s no wonder, then, that Blue Apron and Amazon warehouses generate high turnover. In fact, this is likely by design. By creating working conditions that not only extract vast amounts of labor at low costs, but also drive workers away, tech companies can skirt the obligation to reward employees with raises and promotions. A companion to the profit-mongering schemes of Uber, Lyft and now Amazon (through its Amazon Flex delivery vertical) to classify workers as contractors, this form of labor arbitrage ensures that owners of capital avoid the risk of losing wealth to hourly workers—a class they deem thoroughly disposable.

Tesla has caused similar workforce tumult, firing employees for the foggy offense of underperformance. Of the hundreds of terminated employees from both its Palo Alto, Calif. headquarters and its Fremont facility, many were union sympathizers who’d been in talks with the United Auto Workers. The move has thus aroused suspicions that the company sought to purge dissidents—a reflection of the anti-union posture that has characterized Silicon Valley for decades.

If the near-ubiquity of factory and warehouse worker exploitation in the news cycle is any indication, tech capitalists—through their regulatory negligence and toothless “solutions”—have fostered a culture of barbarism. Low-wage laborers have little to no recourse: They’re either left to endure imminent social and physical harm, or, should they seek protections against the anguish they’ve borne, are stripped of their livelihood.

The blue-collar hellscape Tesla, Blue Apron and Amazon have wrought is what laissez-faire, startup-styled late capitalism looks like. At a time of such disregard for the fundamental health, safety and humanity of low-tier workers, the tech-executive class has proven nothing is sacred—except, of course, the urge to scale.

This article was originally published at In These Times on November 29, 2017. Reprinted with permission.

 About the Author: Julianne Tveten writes about the intersection of the technology industry and socioeconomic issues. Her work has appeared in Current Affairs, The Outline, Motherboard, and Hazlitt, among others.

Delivery Drivers Sue Amazon Over Misclassification, Failure to Pay Overtime and the Minimum Wage

Tuesday, December 20th, 2016

With wage and hour lawsuits becoming increasingly common across the country, there was little reason for the lawyers at Amazon.com’s Seattle headquarters to be surprised when one landed on their doorstep recently. But they may have been concerned to learn that their newest legal adversary is “Sledgehammer Shannon” Liss-Riordan, a Boston attorney who gained legal fame by beating corporate giants like FedEx and Starbucks in just these kinds of contests.

The new lawsuit against Amazon is similar to one of Liss-Riordan’s best known cases—a suit against FedEx that charged the company was misclassifying delivery drivers as independent contractors when the workers were, as a matter of law, regular employees. Liss-Riordan won that fight and, this year, FedEx announced that it would give up on a series of related legal fights and pay $240 million to some 12,000 drivers in 20 states.

Liss-Riordan took the fight to Amazon in a suit filed October 4 in the U.S. District Court for the Western District of Washington. It charges Amazon and Amazon Logistics Inc. with violating the minimum wage law in Seattle, state labor law in Washington and the federal Fair Labor Standards Act (FLSA).

Liss-Riordan explains that Amazon is experimenting with a delivery system where the company contracts with individuals to use their own cars to pick up parcels at Amazon warehouses and deliver them to local customers. The drivers typically sign up for a specific work shift and are paid an hourly wage. They are not compensated, however, for expenses like gasoline, car maintenance, telephone calls, or other incidentals. When subtracting these expenses, drivers often end up earning less than the minimum wage and are denied overtime pay, she says.

That description of delivery methods was echoed by Stacy Mitchell, co-director of the advocacy group Institute for Local Self-Reliance. Along with co-author Olivia LaVecchia, Mitchell has just completed a major study of Amazon’s business practices that warns that the giant corporation is killing good jobs in local economies as it seeks to monopolize different sectors of the retail business.

“Amazon has substantially expanded its warehouses in recent years and is experimenting with the so-called ‘last mile’ of the delivery system. They are increasingly using on-demand drivers, and also regional couriers, to move goods,” Mitchell says. “In the past, this sort of ‘last mile’ delivery was typically done by the U.S. Postal Service or United Parcel Service. USPS and UPS jobs are good-paying union jobs, and Amazon is undermining these with its gig economy model.”

In These Times reached out to Amazon to comment on the lawsuit. Spokesman Jim Billimoria provided the following response:

“The small and medium sized businesses that partner with Amazon Logistics have their own employees and are required to abide by applicable laws and Amazon’s Supplier Code of Conduct, which focuses on compensation, benefits, and appropriate working hours. We investigate any claim that a provider isn’t complying with these obligations.”

Liss-Riordan says this sort of a defense is typical of large corporations, many of which have lost wage and hour lawsuits in court.

“It’s not what you say that counts, it’s what you do,” she said. “We’ve been able to demonstrate, time and time again, that a lot of these corporations just don’t live up to their stated policies when it comes to real-life employment practices on the ground. That’s why you see more and more of these suits.”

Indeed, a 2015 report from the law firm of Seyfarth Shaw LLP described an “onslaught” of litigation resulting in a record high number of federally-filed wage and hour cases in 2015. According to the firm, there were 8,781 such cases in 2015, compared to only 1,935 in 2000.

Asked about her nickname “Sledgehammer Shannon,” Liss-Riordan laughed out loud.

“It’s sort of silly. Mother Jones magazine did an article last year about a case I have against Uber, and I get a lot of jokes. I don’t care. The fact is, we will take on cases like this and fight them for 10 years if we have to.”

This blog originally appeared at Inthesetimes.com on December 12, 2016. Reprinted with permission.

Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA’s Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper’s New York City headquarters and in the Washington, D.C. bureau.

The Supreme Court Just Rejected A Wage Theft Suit Against Amazon. What Does It Mean For Other Workers?

Tuesday, December 16th, 2014

Retail warehouses don’t have to pay workers for the time they spend in security screenings to make sure they’re not stealing, the Supreme Court ruled Tuesday in a unanimous decision that reverses a lower court’s finding that workers must be paid for that time.

The ruling is a blow to wage theft claims by the poorly paid workers who fill orders for Amazon.com and similar online retailers in punishing conditions with little job security. It effectively ends 400,000 workers‘ hopes of recouping hundreds of millions of dollars in back pay from the company in 13 different class-action suits.

But an employment law expert tells ThinkProgress that workers who are bringing a host of other prominent wage theft cases in other industries have nothing to fear.

“It says absolutely nothing about whether other pay practices violate the Fair Labor Standards Act,” said Prof. Catherine Keck, who teaches employment and labor law at the University of California Irvine School of Law. “I don’t think you can read this decision as anything but a very narrow interpretation of a particular portion of the law.”

The case targeted Integrity Staffing Solutions (ISS), a temp agency that Amazon pays to staff its warehouses. The warehouses require staff to clock out prior to lining up for mandatory security screenings, which workers say take up to 25 minutes to complete because the company won’t invest in setting up enough metal detectors to turn the process into a quick, simple pause on the way out of the building.

A 1947 law called the Portal-to-Portal Act exempts employers from having to pay workers for the time they spend on activities “that take place before and after the workday proper,” the New York Times explains. Workers can’t demand wages for the time it takes to walk from their car to the time clock, for example, or for the time they spend commuting. How you read on-site security screenings in the context of that law, Keck said, is a judgment call.

“There’s truth in both points of view on this. This is not like commuting,” Keck said, and “essentially the employer’s choice about how it wants to run its business and its unwillingness to invest in a security system means it is wasting a lot of its employees’ time.” But the Portal-to-Portal Act specifically says companies don’t have to pay workers for anything they do after the end of their principal work duties.

“I think that language could be construed both to include the security screenings and to exclude them. And the court chose one plausible interpretation, which is that their principal job is to put stuff in boxes in a warehouse and [not] the searches to make sure they’re not stealing stuff,” Keck said. Solving the problem requires either a change to the law from Congress to clarify how mandatory security screenings relate to existing labor law, or a decision by Amazon to spend the money it would take to make the screenings efficient enough that they don’t trap workers on site after their shift’s end.

A series of high-profile wage theft suits against McDonald’s from last spring could prove crucial to the long-running, increasingly rowdy campaign to force the fast food industry to stop paying poverty wages and start letting workers unionize. But while those suits also pivot on allegations that a corporate giant systematically deprived its most exploited employees of money they should have been paid for time they spent on site, the nature of the allegations is so different from those in the Amazon case that worker advocates have nothing to fear from Tuesday’s ruling.

McDonald’s allegedly uses a computer system to police cash flows at its stores in real time, giving managers an incentive to monitor the ratio of cash register revenue to staff wage costs from moment to moment. Workers allege that managers respond to that information by forcing them to clock out but continue working, or clock out but not go home, or otherwise manipulate their time cards and deprive them of their due pay — something multiple former managers have confirmed.

Such timesheet abuses are “clearly illegal and there’s no argument on the other side,” Keck said. “That’s a totally different issue, it arises from a totally different part of the statute.”

This blog originally appeared in Thinkprogress.org on December 10, 2014. Reprinted with permission. http://thinkprogress.org/economy/2014/12/10/3602000/amazon-wage-theft-ruling/

About the Author: Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites.

 

Amazon Wage Theft Case Comes Before The Supreme Court

Monday, October 6th, 2014

Dave JohnsonPicture this: You are supposedly “off work” but every day after the end of your shift you have to wait in a line for up to 25 minutes to get “checked” to see if you are stealing things. The Supreme Court is going to decide if you should be paid for your time. This is part of the larger issue of “wage theft.”

The Roberts Supreme Court is notorious for siding with big corporations over regular Americans. Now they are going to hear a case involving Amazon warehouse workers who are required to check out from “paid time” but then wait up to 25 minutes to go through a screening to see if they are stealing. Who is stealing from whom?

Bloomberg News has the story, in “Amazon Workers Take Security-Line Woes to Supreme Court”:

Jesse Busk spent a 12-hour shift rushing inventory through an Amazon.com Inc. warehouse in Nevada to meet quotas. His day wasn’t over, though.

After clocking out, Busk and hundreds of other workers went through an airport-style screening process, including metal detectors, to make sure they weren’t stealing from the Web retailer. Getting through the line often took as long as 25 minutes, uncompensated, he and others employed there say.

“They did it on my time,” Busk, 37, of Henderson, Nevada, said in an interview. “If people are stuck in your building and they’re not allowed to leave, why don’t you go ahead and pay them?”

Wage Theft Is Big Money

This is not small potatoes. In the case of just one company – Amazon – up to 400,000 workers could get back wages amounting to $100 million. Nationally wage theft is about serious money. Click this chart for the full story from the Economic Policy Institute (EPI).

snapshot-wage-theft-04-02-2014a.png[1]

 

 

 

 

 

 

 

 

 

 

Here’s the thing. If the Roberts court sides with Amazon, businesses will feel free to increase the ways they get time and work out of workers without paying them. Already, according to Bloomberg, “Apple Inc., CVS Health Corp., J.C. Penney Co., TJX Cos. and Ross Stores Inc. are all battling court claims involving searches at break times or the end of shifts at distribution centers or stores.”

Wage theft can take several forms, including but not limited to:

  • Employees denied overtime pay.
  • Employees paid less than minimum wage.
  • Employees forced to work off the clock without pay.
  • Employees misclassified as independent contractors.
  • Employees forced to put in “volunteer” time.
  • Illegal deductions taken from pay.
  • Employees denied breaks.
  • Employees denied promised vacation pay.
  • Employees denied promised sick pay.
  • Tips stolen from workers.

Wage theft does not just hit low-wage employees. Several Silicon Valley companies are being sued for conspiring to keep wages low through an agreement to refuse to hire employees from the other conspirators. This kept competition for the employees down, which kept wages lower than they otherwise would have been.

The Labor Department caught LinkedIn shorting salespeople’s compensation and made them pay $3 million in back wages and $2.5 million in damages.

A few wage theft resources:

EPI report, “An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year.”

OurFuture.org, “Wage Theft Is Much More Common Than You Think.”

WageTheft.org

Wage Theft at Interfaith Worker Justice

The National Employment Law Project

This blog originally appeared in OurFuture.org on October 6, 2014. Reprinted with permission. http://ourfuture.org/20141006/amazon-wage-theft-case-before-supreme-court

About the Author: Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Huge Amazon Wage Theft Case Goes to Supreme Court

Monday, March 17th, 2014

Laura ClawsonOver the last couple years, a lawsuit by workers at Amazon warehouses has been making its way through the courts. Now, the Supreme Court has agreed to take it up. The workers claim that they were made to spend time off the clock going through security screenings, taking about 25 unpaid minutes each day. Being made to work off the clock is classic wage theft lawsuit material, but Bruce Vail writes, the stakes are unusually high in this case:

Mark Thierman, the Reno, Nev., lawyer representing Busk and Castro, says the lawsuit has since been joined by another 500 workers from other warehouses. If the suit is fully successful, he tells In These Times, the settlement could include back pay for as many as 500,000 workers (both permanent and temporary) from all of Amazon’s more than 50 U.S. warehouses. […]A commentary from attorneys at Littler Mendelson, which is representing Integrity Staffing, explains the stake employers have in Busk. “The question is of great import for the nation’s employers as security screening is becoming an ever more common practice in the workplace,” write attorneys Neil Alexander, Rick Roskelley and Cory Walker. “Indeed, the Ninth Circuit’s determination in Busk has already triggered a spate of class-action suits filed by employees seeking back pay for time spent undergoing pre- or post-shift security measures. If allowed to stand, the Ninth Circuit’s determination could result in massive retroactive liability stemming from such suits.”

Since the circuit court ruling was in favor of the workers, there’s reason for concern that the Supreme Court is hearing this case in order to decide that, yes, businesses can force workers to spend significant unpaid time going through required security screenings:

“It’s always a little worrying when [the Supreme Court] agrees to take a case from the Ninth Circuit,” [attorney Brooke Lierman] says. Whereas the Ninth Circuit is considered by labor lawyers to be relatively liberal, the high court is considered very conservative, Lierman says, so there is concern that some Supreme Court judges are predisposed to overrule the Ninth Circuit. “There are justices on the Supreme Court who want to roll back the rights of workers,” she says.

She’s definitely not kidding on that last point.

This article was originally printed on the Daily Kos on March 15, 2014.  Reprinted with permission.

About the Author: Laura Clawson is the labor editor at the Daily Kos.

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