Amazon’s first U.S. union faces an uphill battle after historic win at Staten Island warehouse

When more than 2,600 workers at a Staten Island, New York, warehouse called JFK8 voted to join Amazon’s first U.S. union in April, it was a historic moment.

But it was only the first step in a long uphill climb toward a contract. A week after the union won the election at JFK8, Amazon filed 25 objections with the National Labor Relations Board, including charges that union leaders bribed workers with marijuana and harassed those who didn’t support the union.

“We had to make organizing the best environment for us mentally as well. So we’d play music, hand out food, books, weed, whatever it took to change the culture of the building,” said Chris Smalls, co-founder and interim president of the Amazon Labor Union.

Amazon fired Smalls from JFK8 in March 2020 after he led a walkout to pressure the company to improve its Covid safety protocols. Amazon says he received multiple warnings for violating social distancing guidelines. A few days later, an internal memo was leaked in which Amazon’s general counsel called Smalls “not smart or articulate.”

“That moment right there motivated me to continue, you know, especially after just being fired,” Smalls said.

For the past five weeks, Smalls and other organizers of the grassroots ALU fought back against Amazon’s objections to the union victory during public testimony. The hearings came to a close Monday, and the NLRB has yet to make a ruling.

Meanwhile, last Sunday dozens of Amazon workers rallied at a different New York warehouse, in Albany, becoming the latest in a string of Amazon employees attempting to unionize. These moves come amid a recent flurry of organizing that’s swept other major U.S. companies, too, with first-ever unions forming at Starbucks, Apple, Google, Microsoft, REI and Trader Joe’s.

CNBC sat down with Smalls and fellow ALU founder Derrick Palmer to learn about their battle and find out what happens next if the union is upheld.

“The real work is definitely beginning now,” Smalls said. “We have to get this company to come to the table for negotiation, which we know they do not want to do.”

The ALU victory was especially unusual because it’s a small, independent union, far different from the large, powerful unions that have historically succeeded at big companies, and collected dues from hundreds of thousands of workers. The Retail, Wholesale and Department Store Union, which represents some 100,000 U.S. members, led multiple unsuccessful campaigns to unionize a different Amazon warehouse in Bessemer, Alabama, in recent months. The union has filed 21 objections to the most recent election defeat. 

“The RWDSU, they’re an established union, but we saw a few flaws in their game plan,” Palmer said. “If you don’t have organizers inside the facility, it’s hard to keep the morale up. It’s hard to counter what Amazon is doing with these captive audience meetings.”

Should the NLRB rule in favor of the union, a committee of ALU representatives and employees will bargain with Amazon managers, presenting proposals and exchanging counteroffers until both sides come to an agreement. Reaching a first contract usually takes months, if not longer.

“Often employers decide to really delay the process to make it hard. And sometimes I’ve been involved in campaigns where a first contract process could take multiple years before you land it,” said Sarita Gupta, co-author of “The Future We Need: Organizing for a Better Democracy in the 21st Century.”

One major request the ALU plans to bring to the bargaining table is a $30 minimum wage. Amazon says its average hourly pay is currently $18, with a minimum of $15. The federal minimum wage sits at $7.25 and Walmart‘s hourly minimum is $12. Amazon’s competitive benefits package includes health coverage on day one, fully paid family leave and college tuition support. But Gupta says organizers should receive some of the credit for this.

“Amazon management didn’t come to that on their own. Like oh, we decided suddenly to raise wages. It took movements, it took workers in their workplaces to organize,” Gupta said.

In a statement, Amazon told CNBC: “Our employees have the choice of whether or not to join a union. They always have. As a company, we don’t think unions are the best answer for our employees. Our focus remains on working directly with our team to continue making Amazon a great place to work.”

Amazon wouldn’t let CNBC inside JFK8 for this story, but instead gave us a tour of EWR9, a warehouse in Carteret, New Jersey. Last week, a worker died at EWR9 during the annual Prime Day rush. The Occupational Safety and Health Administration is inspecting the death, although no details have been released.

OSHA is also investigating working conditions at Amazon warehouses in three other states.

Workers say they face a grueling pace of work, with strict limits on how much “time off task” they can rack up, commonly called TOT. It’s been a problem at massive warehouses where it can take several minutes to walk to bathrooms a football field away. Workers at JFK8 are asking for more transparency around how they’re tracked and disciplined for TOT. 

“You walk into work one day they say, ‘Oh, we’ve been tracking this for however long.’ They put together the TOT. And then that’s it. There’s no say, there’s no rebuttal, there’s no plead my case. That’s it. You know, they walk you out the door,” Smalls said.

Amazon says that in 2021, just 0.4% of employees were fired for their inability to perform the job. Still, leaked internal research from 2021 shows Amazon has a turnover rate of 159%, nearly triple that of the overall transportation and warehouse sectors — meaning it churns through the equivalent of all its warehouse workers more than once a year. Amazon predicted it “will deplete the available labor supply in the U.S. network by 2024.”

A recent CNBC survey found 59% of U.S. workers say they support increased unionization in their own workplaces, and in the first six months of fiscal 2022, the NLRB saw a 57% rise in the number of union filings from the year before — a big surge in intent to unionize. The increase in organizing comes amid what labor experts call a perfect storm: four decades of stagnant wages, a pandemic that’s brought record profits for companies and added frustration for workers, and a pro-union administration. 

In May, Smalls, Starbucks organizers and others were invited to the White House to meet President Joe Biden and Vice President Kamala Harris. But amid the “Great Resignation” and labor shortage, critics say workers have power whether or not they unionize.

“My message to these workers is if you’re not happy with a job, there’s 11.3 million vacancies out there. Some of them are for you,” said Diana Furchtgott-Roth, former chief economist for the U.S. Department of Labor.

While surveys and filings show support for unions is high, actual union membership remains at a multi-decade low. In 2021, U.S. union membership was at 10.3%. That’s down from 10.8% in 2020 and way down from 20% in 1983 and nearly 35% at its peak in 1954.

“I know we made history and that was great, to experience that with the world, but we know we’re a long way from, you know, our end road and we want to make sure that what we’re doing here is lasting forever, not just a moment,” Smalls said.

The father of three has been traveling the country, holding rallies in support of other Amazon warehouses that are trying to unionize. But he’s not always successful: Across the street from JFK8, the ALU made an unsuccessful attempt to unionize a new, smaller warehouse called LDJ5.

When asked what other warehouses he’s talking to, Smalls said, “The entire country. You know, every day that list grows.”