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Amazon, Scoring Big India Win, Could Face New Alabama Union Vote

Behind Amazon’s three-straight $100 billion quarters is a ton of drama unfolding in regards to labor strife and litigation both at home and abroad.

In the U.S., a federal labor arbiter ruled that Amazon did in fact interfere with a vote that shot down a Bessemer, Ala. warehouse’s attempt to unionize. As part of the ruling, the National Labor Relations Board (NLRB) recommended that the results be voided and that a second election take place. Overseas, Amazon got a huge break, as India’s Supreme Court ruled in favor of the e-commerce giant’s pleas to stall a $3.4 billion merger between two Indian retail giants Reliance Retail and Future Group, in which the Seattle tech titan has a minority stake.

In Alabama, the unionization vote wasn’t particularly close, with 1,798 workers opposing the union and 738 employees voting in favor of joining the Retail, Wholesale and Department Store Union (RWDSU). Those in favor comprise less than 15 percent of the 5,800 workers who had the option to vote.

In order to defeat the attempt to organize, Amazon needed to garner 1,608 votes, which would have been over the 50 percent threshold to organize the workers, it added.

But the wide margin didn’t stop the RWDSU from filing objections in April with the NLRB charging that Amazon interfered with the right of the warehouse employees to vote in a “free and fair” election, and thus the results should be thrown out and a new vote should be held. The RWDSU filed 23 objections with all sorts of accusations, including that the mailbox installed in the warehouse parking lot to cast votes gave the appearance that Amazon was involved in the collection of votes (and the election itself) instead of the NLRB.

The union alleged that since the mailbox was in full view of parking lot security cameras in the parking lot, it may have created the impression of surveillance, which “could record the employees entering and exiting the tent erected around the collection box to cast ballots.” Additionally, there were other claims accusing Amazon of spreading of misinformation, threatening and even causing the county to alter the timing of certain traffic lights.

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The NLRB recommended that the RWDSU’s objections be sustained, ruling Amazon’s conduct “interfered with the laboratory conditions necessary to conduct a fair election.”

Specifically, the NLRB cited two points of conduct as the cause of interference. For one, Amazon distributed “vote no” paraphernalia to employees in the presence of supervisors and managers, although “employer polling of employee sentiment is generally assumed to be coercive,” the ruling said.

The second pertains to the mailbox, which was installed by the United States Postal Service at Amazon’s request.

“While this is a case of first impression, the employer’s conduct in causing this generic mail receptacle to be installed usurped the NLRB’s exclusive role in administering union elections,” wrote Kerstin Meyers, the hearing officer who oversaw the testimony. “Notwithstanding the union’s substantial margin of defeat, the employer’s unilateral decision to create, for all intents and purposes, an onsite collection box for NLRB ballots destroyed the laboratory conditions and justifies a second election.”

An Amazon spokesperson told Sourcing Journal, “Our employees had a chance to be heard during a noisy time when all types of voices were weighing into the national debate, and at the end of the day, they voted overwhelmingly in favor of a direct connection with their managers and the company.

“Their voice should be heard above all else, and we plan to appeal to ensure that happens,” the spokesperson added.

The results in Bessemer were a major setback for labor activists, who had hoped a victory could have energized many other Amazon warehouses to push for unionization. However, the International Brotherhood of Teamsters, which represents 1.4 million workers in trucking, warehousing and other logistics industries, in June approved a resolution aimed at helping Amazon workers achieve a union contract. The resolution establishes a motive to create a special division to organize workers at the company and will be used to mobilize resources and staff toward the cause.

Amazon lands latest blow in back-and-forth with India’s Reliance Retail

A win in India comes as Amazon continues to battle antitrust investigations amid allegations that it promotes only some preferred sellers on its online marketplace despite its small-business friendly image.

One investigation from Reuters unveiled documents from 2012 to 2019, indicating that the e-commerce giant made repeated moves to skirt India’s governmental regulations, seemingly proving the allegations about promoting certain sellers over others.

Despite these hiccups, Amazon still has a commanding presence in Indian e-commerce, with a 31.2 percent market share in the market. This is only slightly behind Walmart-owned Flipkart’s market-leading 31.9 percent, according to October 2020 data from Forrester Research.

India’s heavy regulatory scrutiny on retail giants may have benefitted Amazon in this instance, since Reliance Retail is the largest retail operator in India with 12,200 stores. If it acquired the retail, logistics and warehouse operations from Future Group, the company would have 1,700 more brick-and-mortar stores under the Big Bazaar, Central and Foodhall banners.

Initially approved by the Competition Commission of India (CCI) in November 2020, the deal was blocked in February by a Delhi high court, leading to an appeal from Future Group. But the next week, a two-judge bench hearing the appeal put the ruling on hold. Another bench order in March allowed the Reliance-Future deal to go through, before Amazon petitioned India’s Supreme Court in a plea that referred to the deal as “illegal” and “random,” and one that could deal “irreparable” damage to its India business.

The contention from Amazon stems from its initial investment in Future Group. Amazon agreed to buy a 49 percent stake in Future Coupons, a part of Future Group, in August 2019 on the condition that Future Group does not forge any alliance with Reliance Industries and 29 other entities without obtaining prior consent from the U.S. e-commerce giant. The “restricted persons” list included Reliance Industries CEO Mukesh Ambani, India’s richest person.

When Amazon took the minority ownership, the deal specified that any disputes would be arbitrated under Singapore International Arbitration Centre rules. On Oct. 25, Amazon won an injunction from a Singaporean arbitrator that would prevent Future Group from selling the businesses to Reliance.

Although the back-and-forth has continued across numerous courts in India in the time since, the Supreme Court made its stance clear that the Singaporean order is enforceable and legally binding in India.

The top court also upheld a previous ruling that ordered a freeze on Future Group founder Kishore Biyani’s assets. Overall, voiding the deal would be a massive blow to Future Retail, which has faced a significant cash crunch that has only gotten worse since Covid-19 outbreaks forced areas in India into lockdown earlier this year. Future Group’s lawyers argued in court that the Reliance deal is crucial for the retailer’s survival and an aborted deal may lead to bankruptcy and job losses.