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Amazon Still Has Options After Labor Board Rejects Union Challenge

Workers from Amazon, the Fashion Model Alliance, Starbucks and more are expected to march on Monday in support of union recognition, after a National Labor Relations Board (NLRB) officer rejected the e-commerce giant’s objection to Staten Island employees’ vote to unionize. 

The NLRB report is seen as a major setback in Amazon’s quest to challenge its fulfillment center employees from collective bargaining in what would be the first union for the company domestically.

The planned marches, set for various locations in New York, follows an NLRB report released Thursday that found Amazon’s objection to a union vote to be unsubstantiated in a case involving fulfillment center employees at a Staten Island facility, referred to as JFK8. Those employees voted earlier this year in favor of union representation, marking the first U.S. union for Amazon.

“Today is a great day for labor,” Amazon Labor Union (ALU) president and former JFK8 worker Christian Smalls said Thursday on social media following the NLRB hearing officer report. “[ALU] has officially won our objections hearing against Amazon.” 

Amazon had sought to challenge the vote, which was won by a 10.8 percent margin, by raising questions around the neutrality of the election and how voting was conducted. 

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The hearing officer suggested Amazon’s objections be “overruled in their entirety” and said the company “has not met its burden of establishing” proof that parties “engaged in objectionable conduct affecting the results of the election.” 

Although the report was hailed as a victory for the ALU workers, the suggestions must still be considered before an NLRB regional director, with Amazon and the union allowed to file their own objections prior to that hearing. 

Amazon has signaled it will take that route and further challenge the NLRB officer’s report. 

“While we’re still reviewing the report, we strongly disagree with its recommendations and intend to appeal,” Amazon said in a note to JFK8 workers on Thursday. “As we showed throughout the hearings with dozens of witnesses and hundreds of pages of documents, the actions of both the agency and the ALU improperly influenced the outcome of the election, and we don’t believe it represents what the majority of our team wants.” 

The e-commerce company went on to tell employees the election is still being reviewed and there are currently no operational changes that will take place at the fulfillment center.  

The outcome with the NLRB holds big implications for Seattle company as Amazon grows its business, particularly on the logistics side as it looks to sell an ever-growing portfolio of services across the supply chain to other businesses. 

The company revealed last week the Amazon Warehousing & Distribution (AWD) division in the latest effort to build on supply chain services it can offer other businesses. 

AWD offers companies long-term storage along with distribution services to the company’s fulfillment centers. 

“For many businesses, managing logistics and operations—such as inventory storage, distribution and order fulfillment—is a source of complexity and cost,” Amazon said. “These challenges have only been amplified in recent years as constrained supply chains caused global inventory backups and fulfillment challenges.” 

The company said AWD allows businesses to be “free from the time-consuming, cumbersome process of moving inventory from upstream facilities to Amazon fulfillment centers.” 

The company said AWD customers next year will see the distribution options expanded to include delivery to stores, wholesale customers and any other location. 

It’s a competitive move for Amazon’s logistics and supply chain services offering as other retailers—such as Walmart, American Eagle Outfitters Inc. and most recently Gap Inc.—open their own logistical capabilities up to other brands. 

Even with the expansion of its logistics services, Amazon is refining the real estate portfolio supporting those operations as it right-sizes a footprint that grew to meet the surge in business during the height of the pandemic. Now, as the operating environment normalizes from that peak, Amazon is working to address an oversupply of workforce and industrial real estate. 

Supply chain consulting firm MWPVL International said the company has so far called off plans on 42 facilities totaling 25 million square feet and also delayed 21 other facility openings. 

Amazon last week said it would close two Maryland delivery stations by next month, which would shed 353 jobs across the two locations, according to a filing with the state labor department.