Unions Gain in Popularity Among Dot-Com Workers
By NICK WINGFIELD and YOCHI J. DREAZEN Staff Reporters of THE WALL STREET JOURNAL
Disenchantment among dot-com workers has given one of the most venerable fixtures of the Old Economy -- the labor union -- its first fighting chance for a foothold in the New Economy.
Enticing the unions is a corps of disaffected workers who want higher wages to make up for worthless options. But the wholesale collapse of Internet stocks has complicated matters by leaving many dot-coms teetering, making some of them less rewarding targets for organization.
An ongoing union campaign at Internet grocer Webvan Group Inc. illustrates the forces at work. For the past several months, the Foster City, Calif., company has been grappling with union efforts to organize delivery and warehouse workers at several of its distribution centers. Last year, for example, Local 1105 of the United Food and Commercial Workers Union tried to organize grocery workers at the Renton, Wash., warehouse of HomeGrocer, an Internet grocery company owned by Webvan. But the union gave up when it didn't find enough interested workers, though the Teamsters are continuing drives at other Webvan locations.
Now, Local 1105 says it plans to wait at least a year before taking another pass, since it's not sure whether unionizing Webvan, whose stock now trades around 47 cents amid mounting concerns about the viability of its business, is worth the effort. "We don't know who is going to be here and who is not going to be here," says Paul Quaintance, an organizer with Local 1105.
Bud Grebey, a Webvan spokesman, dismisses questions about the company's prospects, as well as the need for unions at Webvan. "Our employees in these facilities are well compensated and have excellent benefits programs," he says.
One attractive union target is Amazon.com Inc. At its home base in Seattle, the Internet retailer faces a drive by the Washington Alliance of Technology Workers, familiarly called WashTech, to organize 400 Amazon customer-service agents. The 1.4 million-member United Food and Commercial Workers, or UFCW, has also spent months leafleting Amazon's distribution centers, though no formal union-certification vote has been scheduled.
Employees and union organizers say that growing unease about job security, benefits, forced overtime and low pay are behind the Amazon campaigns. Jeremy Puma, a 25-year-old customer-service representative at Amazon, says stock options attracted him to the company. But with the decline in Amazon's share price, he says the $10 to $14 an hour most Amazon customer-service agents make isn't enough.
When he was hired by Amazon a year and a half ago, "everyone was starry-eyed" at the promise of stock-market riches, Mr. Puma says. "That's just not the case anymore," he adds.
Amazon executives insist that their customer-service workers are paid competitive wages and that their stock options give them a means to profit over the long term. "I think unions have an important role to play in society," Jeffrey Bezos, Amazon's chief executive, said recently. "I thinkthey're not needed at Amazon. All our employees are owners."
The two campaigns underscore a little-known fact: Behind the New Economy patina of many Internet companies are thousands of Old Economy workers. Exact figures are unavailable, but some labor experts estimate that there may be as many as 35,000 workers unloading trucks, assembling and packing shipments for customers at companies such as Amazon, Peapod Inc. and the online subsidiaries of giant retailers including Wal-Mart Stores Inc. and J.C. Penney Co.
"There is absolutely no difference between a warehouse or shipping worker for Amazon or Webvan and their counterparts at traditional companies," says Brian Rainville, a spokesman in Washington for the Teamsters. "When you look past the glamour of the Internet, you find that the New Economy is actually full of Old Economy jobs."
Organizing thousands of Amazon employees would be a huge symbolic victory for the nation's unions, sending a message that the labor movement has a place in the New Economy. But based on recent experience, such a victory may be hard to come by.
As an example, WashTech's efforts to organize Microsoft employees haven't gotten off of the ground yet, though the union, an affiliate of the Communications Workers of America, was involved in a class-action lawsuit on behalf of longtime temporary workers that the company settled recently for $97 million.
More encouraging for labor, the UFCW has had some success organizing dot-com workers. Four years ago, the union organized workers at a now-defunct online grocer in the Northeast that was subsequently taken over by Peapod, and the UFCW now represents some 1,500 workers at Peapod and Albertsons.com, the online arm of the Albertsons grocery chain. The union recently finalized a contract for a group of Peapod employees in the Mid-Atlantic region.
As they make their moves in the New Economy, the unions are running into a staple of Old Economy labor relations: Some of the companies they have targeted are counterattacking with old-fashioned, and controversial, antiunion tactics.
Take the situation at eTown.com (www.etown.com), a San Francisco-based consumer-electronics information site owned by Collaborative Media Inc. Recently, a group of customer-service employees at the company filed a petition with the National Labor Relations Board for a formal vote on union representation by the Newspaper Guild, a union affiliated with the CWA. A few days later, eTown.com eliminated 28 jobs, or nearly a quarter of its staff.
Customer service was among the areas hardest hit by the cuts, a fact that immediately sparked complaints of retaliation. "I will always have my suspicions," says Eric Anderson, a senior customer-service representative at eTown.com, who says workers are fighting for a stronger voice in job scheduling and other matters.
Lew Brown, president and chief operating officer of eTown.com, denies the department was targeted because of its union activities, stressing that eTown.com had to pare spending in other areas as well. "We're not a profitable company," he says.
Webvan, meanwhile, has relocated some jobs from its Irvine, Calif., distribution center to a facility in nearby Fullerton. Patrick D. Kelly, an official of Teamsters Local 952, alleges the move was intended to dilute the organizing work the union had done in Irvine, where it had gotten support from a majority of delivery workers.
The Teamsters recently filed a complaint with the NLRB accusing a Webvan manager of "interfering with, restraining, and coercing employees" who have sought to organize the Irvine facility. A hearing on the complaint is scheduled for April in Los Angeles. In the meantime, organizers with local 120 of the UFCW have begun distributing union pamphlets outside Webvan's Oakland, Calif., warehouse.
Webvan's Mr. Grebey confirms that the company moved 32 jobs to Fullerton from Irvine, but says the changes were related to economic considerations and the decision to make the changes predated the union activity in Irvine. He declined to comment on the specific allegations in the NLRB complaint but said Webvan "won't tolerate any unlawful activity by any employee."
Unions have accused Amazon of heavy-handed tactics, too. Recently, four customer-service workers who were distributing union fliers in the company cafeteria were asked to leave the premises by an Amazon manager, according to WashTech. Last week, WashTech accused Amazon of publishing misleading antiunion material aimed at customer-service workers on an internal Amazon Web site.
Amazon has denied that it asked the employees to leave the cafeteria, saying they packed up on their own. Patty Smith, an Amazon spokeswoman, said the Web-site material was a straightforward attempt by Amazon to answer employee questions about unions. "Any effort the company makes to communicate with people will be labeled union-busting," Ms. Smith said.