Amazon shareholders to vote on audit of working conditions

Amazon will face a shareholder vote calling for an independent audit of its warehouse working conditions for the first time in the company’s history, after US Securities and Exchange Commission (SEC) rejected its attempt to exclude the proposal from its upcoming annual general meeting.

Two shareholder proposals calling for an independent audit were submitted in December 2021 – one by digital investment platform Tulipshare and another by the Domini Impact Equity Fund – on behalf of investors concerned about ongoing reports that Amazon employees are being subjected to unsafe working conditions and unfair treatment on a global scale.

“For the year 2020, it was reported that Amazon’s injury rate was more than twice as high as that of Walmart warehouse workers, and that Amazon’s serious injury rate was nearly 80% higher than the wider warehouse industry,” said the Tulipshare proposal, adding that the company’s high employee turnover rate – roughly 150% a year before the pandemic – is almost double that of the wider retail and logistics industries.

“In response to warehouse workers’ recent organisation efforts and unionisation votes, former chairman Jeff Bezos admitted that Amazon needs ‘to do a better job’ for its employees. As Amazon shareholders, we agree, which is why we are calling for an independent audit and report of the working conditions and treatment that Amazon warehouse workers face.”

Amazon initially attempted to have the proposals excluded from its annual general meeting (AGM), with its lawyers writing to the US securities regulator SEC in January 2022 to request their removal on the basis that workplace safety issues are “a matter of ordinary business” and therefore excludable.

The SEC – which changed its guidance on 3 November 2021 so that shareholder proposals related to “significant social policy issues” can no longer be excluded under the “ordinary business” exception – rejected this request, marking the first time the issue of workers treatment and safety will be put to a vote at an Amazon AGM.

Computer Weekly contacted Amazon for comment on the SEC’s rejection of its request, but received no response.

Speaking with Computer Weekly, Tulipshare’s chief marketing officer Jenna Armitage said it was a good first step in the right direction, with the SEC changes making it much easier to get the proposal on the ballot.

“We’re only asking for an audit. This audit is just going to bring back data and ensure we can get on the right track…it won’t do as much as quickly as it should, but it will provide the data so that we can make sure that Amazon fixes this issue,” said Armitage. 

She added that ongoing reports of poor working conditions were bad for business. “The issues have gone on for too long, and it’s our duty to oversee the management of Amazon as shareholders…it’s Amazon warehouse workers’ labour that pays out the dividends to shareholders, so we have to ensure that our dividends don’t come at the cost of compromising safety for workers,” she said.

In response to the Tuplishare proposal, which is now included is now included as Item 16 in Amazon’s proxy statement, the company’s board of directors recommended (in the same document) that shareholders vote against the proposal, citing numerous safety initiatives and investments the company has made in recent years.

“In light of our commitment to workplace safety, the steps we are taking to research, invest, and apply data and insights to improve safety in our workplaces, and our robust disclosures on these steps, the board recommends that shareholders vote against this proposal,” it said.

The issues have gone on for too long, and it’s our duty to oversee the management of Amazon as shareholders

The initiatives and investments Amazon cites in the proxy statement includes its WorkingWell initiative, which it describes as a “comprehensive programme that aims to help prevent injuries, provide wellness services, and offer health literacy for employees”; its five-year $12m partnership with the National Safety Council, which aims to use tech to decrease injury rates and improve recovery times; and it spending $15bn in Covid-related costs, as well as a further $300m on non-Covid-related “safety projects”.

Computer Weekly contacted Amazon for comment on the proposal, but it said that there was nothing new to add.

Responding to separate questions about the company’s workplace safety record and why reports of poor working are persisting, Amazon spokesperson Kelly Nantel said it had hired tens of thousands of additional staff to meet the unforeseen demand from Covid-19.

“Like other companies in the industry, we saw an increase in recordable injuries during this time from 2020 to 2021 as we trained so many new people,” said Nantel. 

“Reviewing all of the OSHA [Occupational Safety and Health Administration] data, it’s clear that from 2019 to 2021, Amazon’s recordable injury rate declined by more than 13% while the three other large retailers in our industry saw their rates increase. While we still have more work to do and won’t be satisfied until we are excellent when it comes to safety, we continue to make measurable improvements in reducing injuries and keeping employees safe.”

On Amazon’s claims that it is committed to workplace safety, Tulipshare’s Armitage said that whatever action the company is taking, “it’s not working”, adding: “This has been going on for years, and it’s only getting worse…how can you be the ‘world’s best employer’ and have a turnover rate of 150%?” 

She went on to note that recent unionisation efforts were also a strong indicator of the continuing problem. For example, Amazon workers at the JFK8 warehouse – a major Amazon fulfilment centre in Staten Island that employs more than 8,300 people – voted to unionise on 1 April 2022, forcing the e-commerce giant to formally recognise a trade union of its workers in the US for the first time.

The unionisation effort was driven by the Amazon Labor Union (ALU), which began organising in April 2021 in response to working conditions at the company.

“There’s multiple ways you can try to resist, and shareholder activism is just one of them,” said Armitage, adding the Interfaith Center on Corporate Responsibility (ICCR, a major investment institution of which Tulipshare is a member) has already suggested to other shareholders that they vote in favour of the proposal. “We’re hopeful we’ll have a good turnout at this AGM given the reputational risk for investors.”

She added that while other investment institutions such as the Institutional Shareholder Services and Glass Lewis are yet to come out explicitly in favour of the proposal, the AGM on 25 May 2022 gives investors chance to show they are not complicit in Amazon’s treatment of warehouse workers.

A further 24 institutional investors – including asset managers Nordea, Royal London and several large European and US pension funds – separately attempted to have a shareholder resolution brought that would increase transparency around where and how much Amazon pays in tax around the world.

While Amazon also challenged that resolution on the basis it was a matter of “ordinary business”, the SEC took the opposite view, meaning a shareholder vote on the issue will go ahead as well.