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Human Capital: Court ruling could mean trouble for Uber and Lyft as gig workers may finally become employees

Welcome back to Human Capital! As many of you know, Human Capital is a weekly newsletter where I break down the latest in labor, as well as diversity and inclusion in tech. It’s officially available as a newsletter, so if you want this content when it comes in hot Fridays at 1 p.m. PT, subscribe here

Since the election is coming up, this edition focuses heavily on California ballot measure Proposition 22. The TL;DR is that gig companies like Uber, Lyft and DoorDash really want to keep classifying their drivers and delivery folks as independent contractors, so they put millions of dollars into this ballot measure. This week, we saw Prop 22-related complaints and lawsuits filed, and an appeals court judge decide Uber and Lyft must reclassify their drivers. We also heard directly from gig workers on both sides about why they do or do not want to be independent contractors.

But we’ll also look at SoftBank’s first investment from its D&I fund, Pinterest’s addition of a new Black board member and more. Let’s jump in. 


Labor Struggles


Uber and Lyft must classify drivers as employees, court rules

But. And this is a big but. Uber and Lyft will likely appeal this decision and it’s also possible this decision won’t matter depending on how Prop 22 goes. We’re just a couple of weeks out from Election Day and this decision has a thirty day hold on it once the remittitur goes into effect. And that remittitur has not yet been issued.

Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling today, the judge said neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and that their respective financial burdens “do not rise to the level of irreparable harm.”

Additionally, there is nothing in the preliminary injunction, according to the judge, that would prevent Uber and Lyft from offering flexibility and independence to their drivers. Lastly, the judge said Uber and Lyft have had plenty of time to transition their drivers from independent contractors to employees, given that the key case in passing AB 5, the gig worker bill that spurred this lawsuit, was decided in 2018.

Amazon workers protest for time off to vote

Ahead of Election Day, Amazon employees protested at the company’s headquarters in Seattle for paid time off to vote. In a statement to GeekWire, Amazon said employees that don’t have enough time off can request additional, excused time off. 

“The number of hours and pay provided to employees varies by state in line with local laws,” the spokesperson said.

According to GeekWire, Amazon notified managers that they should approve PTO requests for voting. 

Tech companies that are giving employees paid time off for Election Day include Salesforce, Apple (hourly employees get four hours), Facebook, Twitter, Uber and others. 

No on Prop 22 camp files complaint with USPS against Yes on 22

Opponents of California’s Proposition 22  filed a complaint this week with the United States Postal Service. The No on 22 campaign alleges the Yes side is not eligible for a nonprofit postal status and is asking USPS to revoke its permit.

It’s much cheaper to send campaign mailers as a nonprofit organization. For example, sending between 1 – 200,000 small mailers to every door normally costs $0.302 per piece. As a nonprofit, that costs $0.226 per piece, according to USPS. To be clear, the Yes on 22 campaign confirmed it was formed as a nonprofit organization under IRS section 501(c)(4), which pertains to social welfare organizations. But the No on 22 side says USPS erred in approving the Yes on 22 campaign.

In a statement to TC, Yes on 22 spokesperson Geoff Vetter said, “As a 501(c)(4) organization, Yes on 22 is eligible for the appropriate nonprofit postage rates with the USPS, which we applied for and were granted by the U.S. Postmaster.”

Uber faces class-action lawsuit over Prop 22

Uber is facing a class-action lawsuit over Proposition 22 that alleges the company is illegally coercing its drivers to support the ballot measure that seeks to keep workers classified as independent contractors. The suit was brought forth by two Uber drivers, Benjamin Valdez and Hector Castellanos, as well as two California nonprofit organizations, Worksafe and Chinese Progressive Association.

In the suit, the plaintiffs argue Uber has encouraged its drivers and delivery workers to support Prop 22 via the company’s driver-scheduling app.

“This is an absurd lawsuit, without merit, filed solely for press attention and without regard for the facts,” Uber spokesperson Matt Kallman said in a statement to TechCrunch. “It can’t distract from the truth: that the vast majority of drivers support Prop 22, and have for months, because they know it will improve their lives and protect the way they prefer to work.”

Shipt workers protest outside Target and Shipt headquarters

Shipt shoppers followed through with their protest plans this week when they staged actions at Target’s headquarters in Minneapolis and Shipt’s headquarters in Birmingham, Ala. 

Ahead of the protests, Shipt shopper and organizer with Gig Workers Collective told me his goal was to bring attention to the new pay structure Shipt began rolling out and how shoppers “are getting paid less for more effort.”

Gig workers speak for and against Prop 22

TC relaunched the Mixtape podcast and as part of that, Henry Pickavet and I chatted with Vanessa Bain, an Instacart shopper who opposes Prop 22 and Doug Mead, a gig worker who supports Prop 22. The whole episode is worth listening to, but here are some key nuggets from them. First up, Bain:

“If all it takes is putting the hiring process and the bossing into an app on your phone to rewrite labor laws, every company on the planet is going to be doing that. There’s so much more, unfortunately, at stake here than just Uber and Lyft and ride share and grocery delivery and how you’re going to get your DoorDash orders. Literally the future of labor is at stake.”

Next up, Mead:

“It’s really the government — their intent to remove a person’s control over how they want to be compensated. And that to me just makes no sense whatsoever,” Mead told us. “I should be in control of how I want to be compensated and by who.”

You can check out the full episode here


Stay Woke


SoftBank invests in Vitable Health as part of D&I fund

SoftBank’s $100 million Opportunity Fund, which it formed in June to invest in founders of color, made its first bet on Vitable Health. The company focuses on providing health insurance to underserved and low-income communities. 

SoftBank’s Opportunity Fund led the $1.6 million round, which included participation from Y Combinator, DNA Capital, Commerce Ventures, MSA Capital, Coughdrop Capital and a handful of angel investors. 

Pinterest brings on another Black board member 

Pinterest brought on its second Black female board member, Salaam Coleman Smith. Smith’s appointment comes a couple of months after Pinterest appointed its first Black board member, Andrea Wishom.

Smith is the former EVP of Programming and Strategy at Disney’s ABC Family and Freeform, as well as former president of Comcast NBCUniversal’s Style Media. 

Here’s an updated look at Black board member representation at major tech companies.

Netflix is launching a tech bootcamp for HBCU students 

Netflix announced a virtual HBCU Boot Camp for students from Norfolk State University, a historically black university in Virginia. Specifically, it’s open for current students and alumni from the classes of 2019 and 2020.

In partnership with online education platform 2U, the boot camp will teach 130 students Java engineering, UX/UI design and data science over the course of 16 weeks beginning in January. A bonus is that members of Netflix’s data science, engineering and design teams will serve as mentors to the students. 

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CA appeals court upholds ruling that Uber and Lyft must classify drivers as employees

Uber and Lyft must classify their drivers as employees, an appellate court ruled yesterday evening. However, the decision will be stayed for 30 days after the court issues the remittitur, which has not happened yet. That means depending on how ballot measure Proposition 22 goes, this case may not end up being the deciding factor in how Lyft and Uber classify their drivers in California.

Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling today, the judge said neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and that their respective financial burdens “do not rise to the level of irreparable harm.”

Additionally, there is nothing in the preliminary injunction, according to the judge, that would prevent Uber and Lyft from offering flexibility and independence to their drivers. Lastly, the judge said Uber and Lyft have had plenty of time to transition their drivers from independent contractors to employees, given that the key case in passing AB 5, the gig worker bill that spurred this lawsuit, was decided in 2018.

“This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” Lyft spokesperson Julie Wood said in a statement to TechCrunch.

Prop 22 is a ballot measure in California that seeks to keep rideshare drivers and delivery workers classified as independent contractors. The measure, if passed, would make drivers and delivery workers for said companies exempt from a new state law that classifies them as W-2 employees. If passed, app-based transportation and delivery workers would be entitled to things like minimum compensation and healthcare subsidies based on engaged driving time.

Meanwhile, Lyft says it’s exploring all of its legal options, which may include appealing to the California Supreme Court. Uber, similarly, is considering its appeal options.

“Today’s ruling means that if the voters don’t say Yes on Proposition 22, rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state,” an Uber spokesperson told TechCrunch. “We’re considering our appeal options, but the stakes couldn’t be higher for drivers—72% of whom support Prop 22—and for the California economy, where millions of people are jobless and another 158,000 just sought unemployment support this week.”

The judge’s decision comes after California Superior Court Judge Ethan Schulman granted a preliminary injunction in August to force Uber and Lyft to reclassify its drivers as employees. Uber and Lyft appealed the decision, but the appeals court has now affirmed the decision from the lower court.

The lawsuit was brought forth by California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco in May. They argued Uber and Lyft gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. Then, in June, the plaintiffs filed a preliminary injunction seeking the court to force Uber and Lyft to reclassify their drivers. In August, Judge Schulman granted it.

“While this legal victory today is directed at two companies, this fight is far broader,” Gig Workers Rising said in a statement. “This is about the future of work in this country. This is about securing good jobs with real benefits for generations to come. If Uber and Lyft are successful in passing Prop. 22 and undo the will of the people, they will inspire countless other corporations to adapt their business models and misclassify workers in order to further enrich the wealthy few at the expense of their workforce.”

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Mixtape Podcast: Proposition 22 and the labor divide

California’s Proposition 22 is the most funded and perhaps one of the most contentious ballot measures in the state’s history.

To date, the Yes on 22 side has put north of $185 million into the initiative. The proposition, funded by Uber, Lyft, DoorDash, Instacart and Postmates, would ensure workers remain independent contractors. A Prop 22 defeat would reconfigure fully how gig working companies classify their workers.

On the first episode of Season 3 of Mixtape, we talked to two gig workers, one on each side of the proposition.

Vanessa Bain is an Instacart shopper who is opposed to Proposition 22. Earlier this year, she co-founded Gig Workers Collective, a nonprofit to fight for fair pay and better treatment for gig workers.

She says the future of labor is at stake.

“I would argue the future of our democracy as well. The reality is that it establishes a dangerous precedent to allow companies to write their own labor laws,” Bain continues. “There’s an obvious conflict of interest there… This policy was created to unilaterally benefit companies at the detriment of workers.”

Surprising exactly no one, Doug Mead, an Uber Eats and Postmates driver who lives in Palm Springs and sits squarely in the Yes on 22 camp, feels differently.

“It’s really the government — their intent to remove a person’s control over how they want to be compensated. And that to me just makes no sense whatsoever,” Mead told us. “I should be in control of how I want to be compensated and by who.”

Uber, which was one of the three original companies (along with Lyft and DoorDash) to fund the proposition with $30 million, would see its business model change drastically if the proposition is defeated.

Earlier this month, Megan spoke with Shin-pei Tsay, Uber’s director of policy, cities and transportation, about a number of topics, including Proposition 22. She says she understands the dilemma that drivers grapple with on both sides but ultimately believes that the flexibility drivers currently have is worth protecting.

“But it isn’t perfect,” Tsay says. “We should be supporting workers more than the existing system enables currently, and so this is sort of a middle way of, you know, protecting that flexibility but also offering some benefits.”

The benefits Tsay is referring to is the 120% of minimum wage, 30 cents per engaged mile, and healthcare subsidies dependent upon the number of hours worked if Prop 22 passes.

And if it doesn’t pass? Or if the company is forced to devise some magical hybrid classification that benefits all drivers, whether they want to be full employees or independent contractors?

“I think it’d be really challenging in our analysis, essentially, we would have to start to ensure that there’s coverage, to ensure that there’s the necessary number of drivers to meet demand. There would be this forecasting that needs to happen — we would only be able to offer a certain number of jobs to meet that demand, because people will be working in set amounts of time.”

Tsay says that the matter at hand is to make the situation better rather than trying to “tinker around with two kinds of imperfect definitions.”

“This is something that a lot of companies have to look at. And what we’re trying, what we’re going up against is [that the] current system in place is very binary. And so I think it has to be, again, in partnership with cities, with states, with the federal government — we have to solve this together. This is not something that we just can come up with. And I don’t think the private sector should just come up with it on its own.”

Both Bain and Mead are also thinking about the potential impact the proposition will have on the future of labor outside of your Ubers and Lyfts. And they both invoked Starbucks of all places and for very different reasons.

“I understand the other side’s point of view in terms of, there are apparently some drivers out there who don’t feel like they’re making enough money,” Mead told us. “But they’re asking for things, to me, that are just ridiculous. They want to get paid for waiting for a ride? Really? Who gets paid to wait on a job?

“If I’m a barista at Starbucks, there are going to be times when there are no customers in the store. However, I’m also taking that time to present the product that’s being sold to the customers, to set up the displays in the stores, to help clean the store. So I’m still working, even if there’s no customers. Now all of that work has already been done, and there are still no customers. Guess what? The manager is going to send me home. They’re not going to allow me to stay there while there’s nothing to do. So I’m not going to get paid to wait. Why should I get paid to wait now as an independent contractor? That makes zero sense to me.”

Bain uses the same example but in a drastically different way. And one that takes the labor movement head on.

“I have no doubt that … if Prop 22 were to succeed, we would see similar types of maneuvers from companies like Starbucks or Walmart, where we’re gonna end up with piece rate work in all of the service industry. Where we’re going to be paid per transaction that we bring up if we’re a cashier. Or we’re going to be paid per latte that we craft, if we’re a barista.

“If all it takes is putting the hiring process and the bossing into an app on your phone to rewrite labor laws, every company on the planet is going to be doing that. There’s so much more, unfortunately, at stake here than just Uber and Lyft and ride share and grocery delivery and how you’re going to get your DoorDash orders. Literally the future of labor is at stake.”

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Prop 22 opponents say Yes on 22 should not be able to mail flyers as nonprofit

Opponents of California’s Proposition 22, the measure that seeks to continue classifying rideshare drivers and delivery workers as independent contractors, filed a complaint this morning with the United States Postal Service. The No on 22 campaign alleges the Yes side is not eligible for a nonprofit postal status and is asking USPS to revoke its permit.

It’s much cheaper to send campaign mailers as a nonprofit organization. For example, sending between 1 – 200.000 small mailers to every door normally costs $0.302 per piece. As a non-profit, that costs $0.226 per piece, according to USPS. To be clear, the Yes on 22 campaign confirmed it was formed as a nonprofit organization under IRS section 501(c)(4), which pertains to social welfare organizations. But the No on 22 side says USPS erred in approving the Yes on 22 campaign.

“The Yes on 22 nonprofit permit was unlawfully issued,” a lawyer for No on 22 wrote to USPS Postmaster General Louis DeJoy. “[…] This misuse of the nonprofit permit coming from a corporate backed $200 million campaign is unprecedented and should be remedied by the Postal Service immediately.”

According to USPS, any organization that wants to send mail as a non-profit must first be authorized by the postal service as being eligible. Those that are eligible for nonprofit privileges, according to USPS, include “some political committees” but not “certain political organizations.” The political committees that may qualify for nonprofit prices regardless of nonprofit status, according to USPS, are the national or state committees of a political party, and the Democratic or Republican congressional or senatorial campaign committees.

“Campaign committees participating in ballot measure advocacy routinely form themselves as non-profits under section 501(c)(4) of the Internal Revenue Code, as the No on 22 lawyers know well,” Yes on 22 campaign spokesperson Geoff Vetter told TechCrunch. “Furthermore, the IRS granted Yes on 22’s non-profit status. As a 501(c)(4) organization, Yes on 22 is eligible for the appropriate non-profit postage rates with the USPS, which we applied for and were granted by the U.S. Postmaster. Moreover, pursuant to USPS Customer Support Ruling 128 – the USPS has a long-term policy in place of allowing the ballot measure committee of a duly authorized nonprofit to mail under the non-profit’s authorization. The above is true for many ballot measure campaigns, and as stated, like all entities, our applications were reviewed and approved by both the IRS and the USPS.”

To date, the Yes on 22 campaign has contributed $185,096,892 to its cause. The Yes on 22 committee consists of companies like Uber, Lyft, Instacart and DoorDash, as well as drivers, small businesses, and public safety and community organizations. The bulk of its funding has come from Uber, Lyft and DoorDash. In comparison, No on 22 has contributed $12,166,063.

“It’s outrageous but not surprising that the app companies that are going to the mat to keep shortchanging workers would shamelessly rip off the postal service,” No on Prop 22 spokesperson Mike Roth said in a statement. “This is just more evidence of the kind of greed we are dealing with from these companies who are spending $186 million in their selfish quest to buy themselves a new law but refused to buy their workers PPE in a pandemic.”

TechCrunch has reached out to USPS and will update this story if we hear back.

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Human Capital: Workers are upset about labor practices, and Amazon and Apple are on the defensive

Happy Labor Day and welcome back to Human Capital, where we unpack the latest in tech labor, and diversity, equity and inclusion. Human Capital will soon be available as a newsletter. Sign up here so you don’t miss it when it drops!

This week, we’re looking at Pinterest’s newest edition to its DEI team, a California bill that seeks to increase racial diversity at the board level, Amazon’s messy week and a court decision forcing Apple to pay its workers for time spent in security screenings.

But first, a quick history of Labor Day, which was first celebrated on September 5, 1882 in New York City following a proposal by the Central Labor Union in the city. On that day, between 10,000 to 20,000 workers took unpaid time off to march from NYC’s city hall to Union Square in what became the first Labor Day parade.

In the time between the first Labor Day parade and when it became a federal holiday in 1894, railroad workers went on strike after George Pullman laid off hundreds of employees and cut wages by 30 percent for those who remained. In May 1894, workers walked out and their union, the American Railway Union, called for a boycott on Pullman train cars. Shortly after, the group representing Chicago’s railroad companies called on the federal government to help shut down the strike. Once federal troops arrived in Chicago, the strike turned deadly as the National Guard killed as many as 30 people.

The troops left in July and, that same month, Labor Day became a national holiday to be celebrated the first Monday in September every year. The strike ended in early August. It’s a complicated history, but it shows labor struggles have been at the heart of American capitalism since the country’s inception (slavery). Now, more than 100 years after the first Labor Day, workers are still fighting for better protections, pay and working conditions.


Stay Woke


Pinterest brings on new head of inclusion and diversity

As Pinterest grapples with some internal unrest over claims of racial and gender discrimination, the company has brought on a new head of inclusion and diversity. Its last head of diversity, Candice Morgan, quietly left earlier this year for venture firm GV. 

Tyi McCray, the company’s new global head of inclusion and diversity, previously worked at Airbnb where she held a few different roles. She began as Airbnb’s interim director of Diversity and Belonging before becoming a diversity strategy lead and ultimately, a government affairs and strategic partnerships lead.

McCray will report directly to Pinterest CEO Ben Silbermann. This marks the first time Pinterest is having a head of diversity report directly to the CEO, rather into HR. Facebook did something similar earlier this year when it began having its chief diversity officer, Maxine Williams, report directly to Facebook COO Sheryl Sandberg. But Facebook still fell short of having Williams report directly to CEO Mark Zuckerberg.

Diversity advocates for years have been calling for heads of diversity to report directly to the CEO. Many companies, however, have yet to do that. More often, tech companies have their heads of diversity report into the head of HR.

California may soon require more diversity at the board level

The tech industry has been under scrutiny for its lack of diversity for years now. Some progress has been made in terms of representation of Black and brown folks within companies, but not always at the leadership level. AB979, which is heading to California Governor Gavin Newsom’s desk, aims to accelerate diversity at the board level.

The bill would require public companies based in California to have at least one board member from an underrepresented group. If signed into law, the bill would also require companies with between four to nine directors to have at least two board members be from an underrepresented group. For boards with nine or more directors, the bill would require a minimum of three people from an underrepresented group.

The bill defines an individual from an underrepresented community as someone who self-identifies as Black, Latinx, Asian, Pacific Islander, Indigenous and/or as gay, lesbian, bisexual or transgender.

This bill seeks to build on top of preexisting law that went into effect in 2018 that mandated publicly held corporations based in California would have a minimum of one female director on its board by the end of 2019. By the end of 2021, companies with five or more directors must have a minimum of two female board members while companies with six or more directors must have at least three female board members.


The 99%


Amazon is a mess

Amazon found itself under scrutiny again over its labor practices. It started when reports surfaced that Amazon was looking to hire an intelligence analyst. Specifically, Amazon in a job posting said it was seeking someone who would inform higher-ups and attorneys “on sensitive topics that are highly confidential, including labor organizing threats against the company.” 

Amazon swiftly took down that job post, saying it was “not an accurate description of the role – it was made in error and has since been corrected,” Amazon spokesperson Maria Boschetti said in a statement to TechCrunch. While Amazon did not give a specific revised description, the company said the role is meant to support its team of analysts that focus on external events, like weather, large community gatherings or other events that have the potential to disrupt traffic or affect the safety and security of its buildings and the people who work at those buildings. 

However, that same day, Vice reported Amazon had been spying on workers for years to monitor for any potential strikes or protests. Amazon has since said it will stop using its social media monitoring tool.

“We have a variety of ways to gather driver feedback and we have teams who work every day to ensure we’re advocating to improve the driver experience, particularly through hearing from drivers directly,” Boschetti said in a statement. “Upon being notified, we discovered one group within our delivery team that was aggregating information from closed groups. While they were trying to support drivers, that approach doesn’t meet our standards, and they are no longer doing this as we have other ways for drivers to give us their feedback.”

Amazon did not comment on how long it had been monitoring closed Facebook groups.

Meanwhile, Bloomberg reported some Amazon Flex drivers have resorted to hanging smartphones in trees in order to get more work in Chicago.

Apple owes its retail workers backpay for time spent in security screenings

Apple has had intense security practices for some time now. Part of that has meant requiring workers to go through security screenings before leaving the store at the end of their shifts. 

The case dates back all the way to 2015, when a group of Apple retail workers in California filed a class-action suit arguing they should be paid while waiting for their bags to be searched.

From the ruling:

Employees estimate that the time spent waiting for and undergoing an exit search pursuant to the Policy typically ranges from five to twenty minutes, depending on the manager or security guard’s availability. Some employees reported waiting up to forty-five minutes to undergo an exit search. Employees receive no compensation for the time spent waiting for and undergoing exit searches, because they must clock out before undergoing a search pursuant to the
Policy.

In February, CA Supreme Court ruled in favor of the plaintiffs. But a US District judge later granted Apple’s request for a summary judgment since some workers part of the class were not required to go through searches since they didn’t bring bags or devices to work. This week, however, an appeals court ruled that it wasn’t relevant if workers did or did not bring their devices or bags to work. Now, Apple must pay more than 12,000 class members for time spent waiting for security screenings.

Apple did not respond for our request for comment.


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This Labor Day, spare a thought for the workers who made your doorstep delivery possible

A few weeks ago, I bought a used paperback mystery for $3 via a small online bookseller. Intrigued that the book came with free shipping, I dug in a bit and was shocked to see that my little impulse purchase traveled through seven different distribution hubs across five states before it got to me. It was loaded and unloaded onto trucks in Indiana, Illinois, Colorado, Nevada and finally California and handled by an unknown number of logistics workers along the way, many of them in the middle of the night.

The logistics of getting the book to me, and the human toll it takes, are mind boggling, but we have become somewhat inured to them.

COVID-19 lockdowns have put a spotlight on the importance and complexity of supply chain dynamics. In a world shaped by the pandemic, our reliance on e-commerce for everything from PPE to toilet paper to hard-boiled paperback mysteries has exploded. A recent report from Adobe found that total online spending is up 77% year-over-year, accelerating growth by “four to six years.” That growth has a very real human cost, and one that we don’t think about or act on enough as a society.

While people recognize the contributions of frontline workers they can see like doctors and nurses, postal carriers and grocery store workers, there’s an entire hidden infrastructure of logistics workers that keeps the online economy humming. These workers are also on the frontlines, but they are behind the scenes. Most earn minimum wage and work long, grueling, high-stress shifts without strong protections in the event they get sick or injured. The fact is that many corporations haven’t made protections for those workers a priority. That was true before COVID-19, but the pandemic gave the issue a renewed urgency, prompting workers from Amazon, Walmart, Target and FedEx, among others, to organize walkouts. And with unprecedented levels of unemployment, more and more people are going to find jobs in the logistics sector.

This Labor Day, it’s time to think about how corporations can better support and protect this vital but often forgotten segment of the workforce.

Better safety in the warehouse

Imagine there’s a package handler at a major manufacturer named Jack who spends his shifts heaving heavy boxes onto a conveyor belt. It’s an arduous movement that Jack will repeat a few thousand times before he punches out. As a 10-year veteran on the job, Jack has performed this singular task on this same warehouse floor more times than he can count. On this particular night, he’s tired after staying up late playing with his kids, and he slips a disk in his back. Unfortunately, Jack’s plight is all too often a reality for millions of workers today.

According to the Bureau of Labor Statistics, 5% of warehouse workers in the U.S. experience an injury on the job each year—higher than the national average. After service workers, like firefighters and police, transportation/shipping and manufacturing/production rank second and third as the occupations with the largest number of workplace injuries resulting in days away from work. Jobs that involve heavy lifting, arduous repetition and operating complex machinery come with serious risk.

Injuries can be devastating for workers, both physically and financially. Taking time off work can not only result in lost wages, but also drive people into debt due to health-related expenses, creating health-poverty traps that are difficult to climb out of. Worker injuries are also costly for employers. A study from Liberty Mutual, using data from the U.S. Bureau of Labor Statistics and the National Academy of Social Insurance, found that serious, nonfatal injuries cost $84.04 million a week in the transportation and warehousing industry. It is in corporations’ best interest to prioritize workplace safety.

One challenge is that traditional approaches to workplace safety are slow, inaccurate and costly. Without practical interventions, organizations spend an estimated $2,000+ per worker annually on injury prevention. Within manufacturing and logistics industries, it costs an additional $2,000+ annually for workers’ compensation per full-time employee. Currently, there is no standard solution to preventing workplace injuries while lowering costs, leaving workers like Jack without adequate protections. Fortunately, digital platforms and tools that leverage technological innovation, including sensors and wearables, are advancing new ways to prevent workplace accidents and injuries.

Take for example StrongArm, one of Flourish’s portfolio companies. StrongArm has built a technology platform that integrates a new generation of industrial wearables, big data analytics and smart algorithms. It is designed to modernize industry dynamics for workers, employers and workers’ compensation insurers. The company’s GDPR-compliant wearable hardware devices and data platform called FUSE deliver real-time injury prevention feedback and collect data to support precise interventions for overall injury reduction and has reduced injury rates by more than 40% year-over-year for its clients.

StrongArm has also helped keep workers safe during the pandemic by launching a new suite of capabilities on its FUSE platform, including CDC communication, proximity alerts (i.e., notifications to workers within six feet of one another), and exposure analysis (understanding who has interacted with whom, at what time, and for what duration, exposing any potential contact transfer with accuracy). These enhanced capabilities can get workers back to work faster, earning vitally needed income while reducing COVID-19 risk by 95%.

Fetch Robotics is another company using technological innovation and digital platforms to promote worker safety. Fetch makes an Autonomous Mobile Robot (AMR) that can transport materials within warehouses, factories and distribution centers while also gathering environmental data. This can relieve the burden of heavy lifting from human workers and ensure that conditions, like heat, remain safe in work environments. In June 2020, the company announced that it was launching a disinfecting AMR that can decontaminate spaces larger than 100,000 square feet in 1.5 hours, helping workers stay safe and get back to work quicker amid the spread of the virus.

Employers should do more

In its report titled, “The Impact of COVID-19 on Tech Innovation,” Lux Research found that the outbreak of COVID-19 will likely push corporations with major manufacturing and logistics operations to assess the potential of robotics. More companies will explore how they can automate processes, particularly those that are repeatable and predictable. Findings like these inevitably lead to questions about how increased automation will impact workers — the eternal “will robots take all the jobs?” question. However, we are still a long way away from a world where human workers are obsolete (just ask Elon Musk).

Robots are still not good at picking up small or oddly shaped objects, for instance. For the foreseeable future, corporations will depend on logistics workers and have a responsibility to protect the safety of those workers. It’s not enough to plaster the required OSHA sign on the factory or warehouse floor. Corporations need to do more. Fortunately in this case, the right thing to do is the good thing to do. By embracing technological innovation, promoting worker safety is a win-win.

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NY attorney general calls out Amazon’s ‘inadequate’ COVID-19 measures and ‘chilling’ labor policies

The New York attorney general’s office reportedly sent a sternly-worded letter to Amazon telling the company that the measures it has taken regarding the COVID-19 pandemic “are so inadequate that they may violate several provisions of the Occupational Safety and Health Act,” and firing outspoken workers sends “a threatening message to other employees.”

The letter, not yet published but obtained by NPR (I’ve asked the NY AG for confirmation of the contents), is only informational and does not amount to legal action. But the wording is strong enough to suggest that legal action may be the next step.

While we continue to investigate, the information so far available to us raises concerns that Amazon’s health and safety measures taken in response to the COVID-19 pandemic are so inadequate that they may violate several provisions of the Occupational Safety and Health Act.

These are precisely the concerns brought up by many warehouse workers over the last two months, including Chris Smalls, who was fired in March after protesting the conditions at the facility where he worked.

Amazon says Smalls was not fired for riling up the workers. Yet reportedly at a meeting attended by Jeff Bezos, the company’s General Counsel suggested making him “the face of the entire union/organizing movement” before following with “our usual talking points about worker safety.”

(Amazon would not confirm or deny those comments took place when TechCrunch asked about them at the time, but did provide a quoted apology by the person who may or may not have said them.)

Two more outspoken employees were fired two weeks later for “repeatedly violating internal policies.” Naturally the usual talking points followed.

The NY AG’s letter said the office is looking into “cases of potential illegal retaliation,” and addresses this pattern as follows:

This Office has learned that many workers are fearful about speaking out about their concerns following the termination of Mr. Smalls’ employment. This is a particularly dangerous message to send during a pandemic, when chilling worker speech about health and safety practices could literally be a matter of life and death.

Amazon routinely protests that it is a paragon when it comes to labor, but is just as routinely contradicted by workers, like Smalls, who have experienced the reality of working at its warehouses.

Amazon issued its “usual talking points” to NPR as a response to the story, saying: “We encourage anyone to compare the health and safety measures Amazon has taken, and the speed of their implementation, during this crisis with other retailers.” The attorney general seems prepared to take the company up on that invitation.

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What Will U.S. Labor Protections Look Like After Coronavirus?

Executive Summary
Tumbling markets amidst the coronavirus pandemic have uncovered deep inequalities among workers, who fall into two groups: those with access to employment protections like affordable healthcare, remote work accommodations, paid time off, and job security — and those without. This second group, which includes the working class, often lack …

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Amazon warehouse workers organized to demand PTO, and coronavirus clinched it

Amazon never tires of explaining how great it is to work at one of its warehouses, but as usual the actual employees tell a different story. This particular group of Chicago workers was fed up with the company failing to provide paid time off or vacation it promised to part-time …

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