Portside

Yesterday, Sen. Bernie Sanders (I-VT) hosted a Senate Budget Committee hearing titled “Should Taxpayer Dollars Go to Companies That Violate Labor Laws?” The week before, Sanders submitted an open letter on April 26 to President Biden, reminding him that as a candidate, he promised to penalize companies that engaged in illegal union-busting tactics by debarring them from acquiring new federal contracts.

Not only is Amazon a preferred vendor for agencies across the federal government, but just in the past week the National Security Agency re-awarded a $10 billion contract to Amazon Web Services for cloud computing. The brother of Biden’s top aide Steve Ricchetti is a lobbyist with a contract to work for Amazon.

That contract comes on top of 26 other federal cloud computing contracts with the U.S. Army and Air Force; the Departments of Health and Human Services, Homeland Security, and Interior; the U.S. Census Bureau; and numerous other agencies.

These multibillion-dollar contracts are being funneled to a company that is fighting so aggressively against unionization that it had to agree to a settlement with the National Labor Relations Board (NLRB) to allow organizing within the facility. And allegations of union-busting, illegal firings, and intimidation tactics continue to this day. Yet the Biden administration has not acted to remove Amazon from the federal contracting pool and indeed has continued to give them contracts.

In Sanders’s opening remarks, he said, “While corporations engaging in illegal activity against union organizing is widespread, this morning we are going to focus on one company, Amazon, who as we speak, is engaged in massive anti-union activity.”

The hearing featured Christian Smalls, president of the independent worker-led Amazon Labor Union (ALU), who spent the day in Washington, not only testifying before Congress but meeting with President Biden at the White House. Smalls was fired for allegedly not following pandemic procedures after he organized in early 2020 for better safety conditions at the JFK8 warehouse in Staten Island, New York. He responded by organizing and helping to win an election for the first union at an Amazon warehouse facility in the United States.

Smalls explained that in the two years of organizing at JFK8, the company arrested him on two separate occasions for delivering food to workers. Despite the company’s failure at JFK8, Smalls described how Amazon has stalled contract negotiations by filing 25 objections to the election results and pressured the NLRB to move the hearing over their challenge to a new location. “To me, it just sounds like the corporations control whatever they want,” said Smalls. “They know that breaking the law won’t be resolved during election campaigns.”

Teamsters General President Sean O’Brien blasted the federal government for rewarding Amazon with federal contracts, as the company violates federal labor law, skirts the health and safety of its workers, all while driving wages down. “When workers try to organize, Amazon breaks the law,” said O’Brien. “Why are we supporting the growth of a company that’s destroying good middle-class jobs?”

Greg LeRoy, executive director of Good Jobs First, a national policy and resource center for corporate and government accountability, added, “We believe that companies which receive government economic development subsidies or procurement contracts should be held to the highest standards of corporate ethics.” LeRoy explained how Amazon’s business model is reliant on public dollars obtained from local, state, and federal procurement. “Amazon.com is perhaps the most aggressive company in America today seeking economic development,” LeRoy said, noting that Amazon’s public subsidies for warehouse and data center locations totaled $4.2 billion. That’s not even a complete picture, LeRoy explained, because some states and localities don’t require disclosures for sales, property, or utility subsidies. Public dollars should raise living standards, not lower them as Amazon has for a large chunk of its workforce, LeRoy concluded.

The union victory at the Staten Island warehouse is so far an anomaly for Amazon. The company beat back a union drive in Bessemer, Alabama, last year. Amazon’s tactics against union organizers in Alabama, Sanders pointed out, necessitated a redo election because the NLRB found that Amazon’s “flagrant disregard” of the law violated the right of workers to a free and fair union election. So far, it looks like Amazon will once again win in Bessemer.

This development coincides with another Staten Island warehouse facility, LDJ5, just wrapping up a union election, where the company decisively won with 618 no votes, compared to 380 yes votes. Reuters reported that, according to one worker who had spent time in both JFK8 and LDJ5, the intensity of the work at LDJ5 was far less than that of JFK8. It’s also likely that the company underestimated ALU’s first victory, but escalated its tactics the second time around.

Amazon’s victories against worker organizing do not reflect the organic sentiments of its warehouse workers. Aside from the brutal, notorious conditions inside the company’s warehouses, as Sanders made clear, “from the very beginning of the union organizing efforts until today, Amazon has done everything possible, legal and illegal, to defeat the union.”

Currently, Amazon is facing 59 unfair labor practice cases at the NLRB, after being fined $75 million for various violations of antidiscrimination and labor laws. The company is also being sued by the NLRB to reinstate a worker who was illegally fired for organizing a union, in addition to a series of gender and sexual orientation discrimination accusations in its Amazon Web Services division. Sanders even pointed to how the company exploits its truck drivers through independent-contractor classifications, which as the Prospect reported, really shifts extraneous expenses onto drivers as the company reaps all the benefits.

Aside from the question of whether or not companies that violate the law should continue receiving federal contracts, the underlying question at yesterday’s hearing was this: What would Amazon’s warehouses look like if workers were granted the ability to participate in a free and fair union election?

Inside Amazon fulfillment centers, a New York Times investigation discovered that the turnover rate was 150 percent, almost double the rate of the retail and logistics sectors. Sanders said, “Workers come into the warehouses, they are worked as hard as humanly possible, and they leave. Is this really a business model that should be rewarded?”

Sanders concluded by suggesting that Amazon’s Jeff Bezos knows exactly what is at stake for the company if the ALU ratifies a contract with the company at the JFK8 facility. Union workers in the United States earn 20 percent more than their non-union counterparts; 79 percent of union workers have guaranteed pension benefits, compared to 17 percent of non-union workers; lastly, union workers are half as likely to be victims of health and safety violations compared to non-union workers.

Separately, Sanders has been trying to block another $10 billion NASA contract for a new moon landing, presumed to be earmarked for Blue Origin, the space company owned by Amazon founder and former CEO Bezos.

By contrast, Sen. Lindsey Graham (R-SC) questioned the purpose of yesterday’s hearing. He said, responding to Sanders, “You’re singling out a single company because of your political agenda.” Downplaying Amazon’s lawbreaking, Graham accused Sanders of abusing his chairmanship, because there are already “processes” to resolve union election disputes and federal contract debarments. Graham concluded by explaining why companies should have the right to not remain neutral during a union drive.

In a direct response, Smalls responded, “When the process for holding these companies [accountable] is not working for us—then that’s the reason why we’re here today.” Smalls added, “We are the ones suffering in the corporations that you’re talking about. You should listen because we do represent your constituents as well.”

The invocation of potentially debarring companies for violating federal labor laws is a massive shift. As the panelists at yesterday’s hearing explained, companies like Amazon often factor in fines and fees as just the cost of business.

President Biden, who has praised the unionizing effort at Amazon explicitly, has the opportunity to uphold his campaign promise. And perhaps, as Christian Smalls said in a tweet yesterday afternoon, get the president in some more trouble.

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