What Supreme Court Amazon ruling exposes

On Dec. 9, the U.S. Supreme Court issued a decision declaring that it was okay for Amazon contractors to force all workers to stay every day after their shift to be searched for possible theft—and NOT get paid for that time. Because the company refuses to hire enough screeners, the process can take up to 25 minutes each day. That can add up to over 500 hours of unpaid work time each year.

Amazon contracts with hundreds of companies to staff the warehouses and then controls all aspects of the work. In this case, the company staffing the Nevada warehouses was Integrity Staffing Solutions. The lawyer representing them was Paul Clement, who was also the lead lawyer in the following cases:

  • June 2014 Hobby Lobby case, where the U.S. Supreme Court denied women the right to contraception/reproductive health care in private for-profit companies that decide to claim a religious objection. Although legal health insurance rights belong to employees not the employers, he argued and the Court ruled that company owner rights trump workers’ rights. Women’s lives don’t matter; billionaire corporations do. Corporations, which can’t pray, have more rights than women whose labor makes the corporation’s profit.
  • June 2014 ABC Broadcasting case, where he asserted the property rights of monopoly interests versus others—and this was upheld by the Court (re: the right of smaller companies to re-transmit programs).
  • 2004 Torture and Procedure case in Rumsfeld v. Padilla. He represented the U.S. government. When asked about the government’s use of torture, he claimed that torture was never used. Now that the CIA lies are out of the bag, it is clear that torture was a part of U.S. policy and well known to administration lawyers, who in fact crafted position papers to justify it.
  • 2003 case regarding ending limits on advertising by corporations.

There are countless reactionary lawyers who take cases to Court. And we are not arguing that there is some kind of conspiracy that connects Paul Clement and the Supreme Court justices. They just share a ruling-class view of the world. However, the coincidence that he was the lead in the Amazon case as well as Hobby Lobby and other cases does help to point out that this decision is part of a broad right-wing attack on basic rights.

Obama administration tells court to rule against workers

The Obama administration filed a brief with the Court instructing them to rule against the workers. The U.S. government uses essentially the same legal arguments and logic as the U.S. Chamber of Commerce and other big-business organizations.

A point stressed over and over again by the Chamber of Commerce, the Retail Litigation Center, the National Retail Association, and National Association of Manufacturers was that if the Court were to rule for the workers, there would be a flood of wage theft cases filed against them. They pointed to the already “alarming” increase in wage theft cases over the past few years. They knew that this was a big issue because they know how prevalent the practice of wage theft is.

Who is impacted by decision—and how?

Wage theft is so pervasive that this decision impacts everyone. Here is a list of a few industries impacted by the decision:

 643,000 non-supervisory warehouse workers but with air, rail, water and truck etc. transport workers—4,760,000 workers

1,273,600 delivery truck drivers

1,083,600 security guards

1,100,000 food processing plant workers

4,438,100 restaurant workers/food beverage

4,668,300 retail workers

hundreds of thousands of airport workers of all classifications

60,000 power plant operators, dispatchers, and distributors

But that is just a small number of those impacted. All of the major state and local government employer associations also weighed in with the Court. They too cited a growing number of wage theft actions being filed against public employers and noted that there are millions of workers working in areas where security of information or physical goods is important. They also didn’t want to pay those workers for required security checks before and after their shifts.

Ask yourself, does your boss think that it is possible for a worker to take something from work? Even if not, would your boss ever harass someone they don’t like by making them stay at work without getting paid to be searched? Would your boss feel that the Supreme Court has given the green light to require you to come early or stay late for checks, even if they have not done them in the past? Nearly everyone is potentially impacted. That is why all of the major employer organizations filed briefs asking for this ruling.

How everyone is impacted

Wage theft in Los Angeles takes $26 million out of workers’ paychecks every week. That amounts to a robbery of $1.35 billion per year. If that money were to be in workers’ paychecks, they would have more money to spend and the economy as a whole would get a boost. Property values in working-class neighborhoods would increase.

Companies would have to pay payroll taxes on that extra $1.35 billion, thereby giving the city desperately needed money. Right now Los Angeles has about 7,000 fewer workers than it did five years ago, and vital services are being cut because officials say there is no money. City workers can’t get the city to agree to a contract. The City wants to cut more because it says it can’t afford to pay for pensions. Teachers haven’t been given a raise for seven years and many good teachers feel forced to leave.

Wage theft impacts the quality of life of every person in the city. While Los Angeles is bigger than many cities, the impact of wage theft is the same everywhere.

 Amazon and sub-contracting: Hiring other companies, which in turn directly exploit workers

Amazon hires companies—referred to as contractors—which in turn hire workers to work in the Amazon warehouses. In the Supreme Court case, the contractor was Integrity Staffing Solutions. The workers who stood up against wage theft were Jesse Busk and Laurie Castro. Jesse Busk worked for Integrity Staffing at the Amazon warehouse in North Las Vegas and Laurie Castro worked for Integrity Staffing at the Amazon warehouse in Fernley, Nev.

Amazon controlled nearly everything about their conditions of work including the requirement for security checks. While they were employees of Integrity Staffing, these workers made profits for Amazon but never attained regular employment status.

Walmart and many others use the same system.

Walmart, for example, uses many contracting companies in a single warehouse. In this maze of employers, workers feel divided and organizing a union becomes extremely difficult. Under the law, employees of a single employer organize and petition for recognition. When there are multiple employers using many employees who are allowed to work only a few hours and where turnover is great, organizing is hard. That is what Walmart and Amazon bank on. If there is trouble, they can get rid of a company and its workers in an instant.

By using contractors, Amazon or Walmart don’t have to worry about paying workers compensation, unemployment insurance, disability insurance, or social security. At the same time, Amazon can demand faster and faster work—making for more and more profit off of low-wage labor.

Sub-contracting is used in almost every industry. Some industries are almost all subcontracted. Airport cleaners used to be employees of the airport and airplane cleaners used to be employees of the airlines. Now they are all employees of contractors. Even the airlines contract out to much lower paying contractors so that when you book a flight on one airline, you actually fly on a contractor line with pilots and crew paid wages not far from the minimum.

Temps and staffing agency employees

A variation of this scheme involves the use of temps or staffing agencies. Workers at the Daimler Mercedes-Benz assembly plant in Tuscaloosa, Ala., are trying to organize a union. They have formed a local of the UAW. The company has about 3,400 full-time regular employees and about 1,000 temps who sometimes work for years in that capacity. As the union campaign gathers strength, the company knows that temps and workers from staffing agencies will not be able to vote and have fewer rights than others.

Nissan claims that it has never laid off any worker in its U.S. manufacturing plants. They have a $2 billion state-of-the-art plant in Canton, Miss., which has 3,300 workers. But up to 40 percent of the production workers are temps who start at about $12 per hour. So instead of Nissan directly laying off any worker, the temp agency “lets them go.” Moreover, the full-time workers have had their hours cut to 32 per week for long stretches of time. With this system of contracting, Nissan only has to imply to a full-time worker that he or she could be replaced by a temp if they were to think about joining a union.

In a related industry—manufacturing auto parts—about 15 to 20 percent of the employees are hired from temp or staffing agencies.

As a result of this and related processes, wages in manufacturing are much lower now than they were 10 years.

Independent contractors

Finally, there is another category of subcontracting—the use of independent contractors. People who individually contract to do work for another person or corporation.

Large hair-stylist corporations often treat stylists and barbers as independent contractors in their stores. Corporations often treat computer programmers, real estate agents, newspaper carriers, language interpreters, couriers and many others as independent contractors.

A new wave of independent contractors has been launched by the use of the Internet and telecommunications technology. Uber connects independent contractors with people who need a cab. Similar setups connect house cleaners, limo drivers and home health care aids to people wanting to hire them.

Universities have claimed that adjunct faculty members are independent contractors, and hospitals and health care agencies have made the same claim about nurses.

Corporations use independent contractors to avoid payroll taxes, workers compensation, unemployment insurance, and social security payments. They know that by using independent contractors they are using employees who no longer have any rights to minimum wage or overtime law protection or even protection from discrimination laws regarding race, sex, age, etc. The use of independent contractors is sort of an ultimate divide and conquer weapon for corporations. Consequently it is used more and more on a large scale.

Warehouse workers fight back

On Sept. 12, 2012, workers at a Walmart warehouse in California went on strike for safety, exposing heat inside the freight containers where they were working. The next day, they began a 50-mile march from Riverside to Los Angeles. The march let the public know that while regular employees of Walmart earned $22,000 per year at warehouses in the Inland Empire, the majority of the workers were temps who earned half that.

Warehouse workers began organizing with renewed energy from California to Illinois to Memphis, Tennessee.

On Dec. 11, 2013, a Walmart warehouse operated by Schneider in Eastvale, Calif., agreed to pay 500 workers over $4.7 million. On May 12, 2014, Walmart agreed to  a $21 million settlement in unpaid wages for 1,800 warehouse workers in the Riverside area.

Despite these victories, Walmart and Amazon have persisted in using contract labor and engaging in a system that misclassifies employees in order to exploit them.

Port truck drivers and Fed Ex: Supply chain exploitation and struggle

Forty percent of all imports into the United States come through the twin ports of Los Angeles and Long Beach. Union longshoremen take the goods off of the ships, but then non-union truckers take the goods to warehouses.

Ever since July 1, 1980, when President Carter signed a law to deregulate the trucking industry, the drive to get rid of unions and slash wages has created a sweatshop industry where truck drivers have no rights.

Now the industry treats nearly all of the port drivers as “independent contractors” even though the companies control all aspects of their work. In the employer’s mind, wage and hour laws do not apply, so many make less than minimum wage given the hours of work and illegal deductions.

In the last three years, drivers have begun to organize and fight back. With the assistance of their union, the Teamsters, they have organized the one company where workers are all full employees and they have gone on strike repeatedly demanding an end to their illegal misclassification as independent contractors, and end to wage theft and justice in every other way. The first strike was for 24 hours on Aug. 26, 2013. The next was on April 28, 2014, for two days. The next was on July 7 for five days. That was followed by a strike on Nov. 13 that ended on Nov. 20. In each case, more and more workers joined the strike from more and more companies. In each case, they won both wider recognition of wage theft and in some cases company commitments to talk.

Along the way, they received support on the picket lines from Walmart workers and McDonald’s workers. On one occasion in April, the Longshoremen showed solidarity by stopping work until threatened with an injunction.

Their battle against wage theft has been winning in the Courts too, as many judgments have declared that they are employees and that the companies owe millions in back pay. Yet the companies almost always appeal rather than comply. In fact, they have been firing workers who testify saying that they are not independent contractors—explicitly fired for testifying to the truth.

FedEx, another critical part of the supply chain, also uses the misclassification of drivers as independent contractors. Their vast profits are based on this. But workers are organizing and fighting back. In August they won a big case in the 9th Circuit U.S. Court of Appeals covering the entire western region. The ruling said that Fed Ex drivers were employees not contractors. Then, on Oct. 23, the Kansas Supreme Court ruled the same way.

On the organizing front, for those not classified as independent contractors, the Teamsters union has been winning recognition. They won in Croydon, Pa., on Oct. 14 and won in South Brunswick, N.J., on Oct. 31 and won in Charlotte, N.C., on Nov. 19. They are also organizing FedEx contractor pilots. The numbers are relatively small, because the votes are forced to be site by site. But this is the beginning of an important campaign.

All of this has been occurring in the context of an upsurge in organizing fast-food workers and Walmart workers and the general fight for a $15 minimum wage. In Los Angeles, there is a growing powerful movement demanding real wage enforcement and the end of wage theft.

The McDonald’s decision and Amazon

In a decision that will impact McDonald’s and countless other corporations, the U.S. Supreme Court ruled on July 29 that McDonald’s controls franchisees to such a degree that it is a joint employer. Wage theft and other violations of worker rights in by a single store may now create a liability for the corporation nationally.

This has huge implications for organizing for power and bargaining—eventually getting a national agreement.

It also has implications for Amazon and Walmart and the way that they exploit workers in warehouses by using subcontractors.

Amazon wage theft, the courts and struggle

When the U.S. Supreme Court ruled in the Amazon case, they were primarily assessing the application of the laws requiring minimum wages, overtime and hours of work. In earlier years, the Supreme Court had thrown out state laws that banned child labor (1919, for example) and wage and hour laws (1923, for example).

But as the struggle for jobs and justice intensified, it created the social conditions forcing President Hoover to sign the Davis-Bacon Act on March 3, 1931, and Roosevelt to sign the National Recovery Act on June 16, 1933, and the Walsh-Healy Act on Aug. 10, 1933. Davis-Bacon and Walsh-Healy established rights to minimum wages for contractors on federal projects. The National Recovery Act contained new rights for workers to organize and set up a system of codes to raise wages in industries. In 1935, that was declared unconstitutional by the U.S. Supreme Court.

The following year, the Supreme Court ruled on a major wage theft case—throwing out New York City law requiring fair wages. A Brooklyn laundry owner paid women workers only $10 per week versus the $14.88 required. When he was forced to pay, he then coerced the women to kick back the difference to him. When he was arrested again, he appealed and the law requiring fair wages was thrown out as unconstitutional.

Today’s Amazon decision follows in the same path.

Between the laundry decision in June 1936,  and June 1938, when President Roosevelt signed the Fair Labor Standards Act, at issue in the Amazon case, the political establishment of the rich was pressed to almost the breaking point by the forces of labor.

In 1936, massive sit-down strikes in Akron Ohio mobilized thousands to win unions in the rubber plants. In 1936, strikers against Remington Rand typewriter plants in New York, Connecticut and Ohio faced police terror as several were shot amid battles to defend the picket lines. Bendix workers in South Bend, Ind., began a sit-in to avoid a lockout, and they won one week later.

On Dec. 16, 1936, after a worker was fired for going to the bathroom, Kansas City GM workers began a sit-down strike. On Dec. 28, 7,000 Fisher Body workers began a sit-down strike in Flint, Mich., joining the Kansas City and Atlanta strikes. By January, despite police and vigilante violence, they won a union.

Sharecroppers continued to organize even in the Deep South led by workers who were for overthrowing the dictatorship of the landlords and the corporate owners. On Dec. 24, 1936, Houston police charged a picket line of striking seamen using guns, tear gas and clubs. They beat 50 workers.

In February 1937, in the wake of the autoworkers victory, 4,000 Detroit women cigar workers struck for a union and a living wage. They faced the worse repression but won a month later. Thousands of Michigan timber workers struck and two were killed, but five months later they won a union and a raise.

Organizing in steel picked up steam in 1937, and a number of strikes in “Little Steel” shook the system. When police attacked a union picnic in Chicago, they killed 10. During that period, steel companies were supplying police forces with guns, tear gas and clubs.

In the South, the steelworkers organized Hughes Tool in Houston and the Packinghouse workers organized 3,000 in Texas. Both campaigns involved unions fighting racism and achieving a degree of white solidarity with Black and Mexican workers.

1937 was also the year that young women working at Woolworths began sit-ins to win unions and a raise. Woolworths was the Walmart of that period.

1938 was another year of fierce struggle in the U.S. and around the world. San Antonio pecan shellers began organizing and 12,000 went on strike on Jan. 31 led by 21-year-old Emma Tenayuca and 31-year-old Luisa Moreno. They fought police violence and over 1,000 were arrested during the strike. It lasted two months, and they ultimately won union recognition and a pay increase.

In April, 300 mostly African American women crab pickers went on strike in Crisfield, Md. They faced isolation and racism. Lynch mobs tried to keep them tied to their $2 per week wage. But after a month most of the large packers agreed to sign contracts.

It was in this context that the battle for a federal minimum wage was fought. Many attempts were made to weaken the language. Exceptions were inserted for certain types of child labor as well as exceptions to the minimum wage and hours provisions. Finally a weakened but important bill was signed on June 25, 1938.

But big business did not stop there. They challenged the law in the courts, and they lobbied and won further exceptions in amendments passed from 1939 to 2004.

On May 14, 1947, one such amendment was signed by the president. It is now called the Portal-to-Portal Act, which means that workers are to be paid from the time that they show up at one work site to the time that they get back.

Prior to this law being passed, workers had been filing and winning wage theft cases. On June 10, 1946, the Supreme Court ruled that activity before or after the beginning of a shift—if controlled by the employer and done for the employer’s benefit—must be paid. That is the central issue in the 2014 Amazon case.

In 1947, corporations wanted to undermine that decision. So the Portal-to-Portal Act was passed to insert exceptions. The new law said that if a custom or practice or a non-written contract existed that provided for less pay or no pay for certain hours—that would trump the federal law.

Ever since then, company lawyers have been arguing that wage theft is okay if the duties required before or after the shift are not part of the core duties of the employee.

The legal dances and splitting of hairs over the language in the law just obscures the real struggle between labor and capital over wage theft. The fact that Amazon and its contractor won this round is not that surprising given that the Court is not feeling a lot of pressure to do something different than what capital wants on a major issue like this. There were no mass actions at the court or similar actions elsewhere. As the pressure builds, more and more decisions will be in our favor.

At the base of the system: ‘I can’t breathe’ and struggle

Back on the ground, warehouse workers will continue to organize.

Describing working conditions in the upper levels of a Pennsylvania Amazon warehouse, one woman said: “I remember going up there to check the location of an item. I lasted two minutes, because I could not breathe up there.” The doors were all shut for “security.” On June 2, 2011, when the temperature was over 110 degrees, it was stifling and 15 workers collapsed from the heat. Later, after exposés forced the company to allow people to go home if it was too hot, the company still disciplined workers who left early.

These conditions typify work for hundreds of thousands of Amazon, Walmart and other warehouse workers around the country. They drive the need to organize.

They are fighting not just Amazon but the financial institutions that control it. The top 10 control over 30 percent of the stock. Among them are BlackRock , State Street Corp, FMR, and Capital World Investors.

In McDonald’s it is State Street Corp, Bank of New York Mellon, Bank of America and BlackRock. Yum Brands (KFC and Taco Bell)  is the same.

Port truck owners include XPO Logistics, which owns Pacer and Harbor Rail Transport. The financial institutions there include FMR, Morgan Stanley, and BlackRock among others.

In Walmart, while the majority is owned by the Walton family, the remaining stock is controlled by those who own the most—enough to control that segment—State Street Corp, BlackRock, Bank of New York Mellon, Bank of America and Berkshire Hathaway.

Every win against wage theft by warehouse workers, fast food workers, Walmart workers, FedEx or port truck drivers is a blow against the system controlled by finance capital.

And the fight is on an international level. On Dec. 8, 2014, workers at two of Amazon’s warehouses in Germany went on strike over pay and conditions. Amazon employs 10,000 warehouse workers in Germany which is its second-biggest market behind the United States.

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