Amazon Worker Issues Mount Amid Labor Department Scrutiny

Amazon.com Inc. (AMZN)’s labor issues are growing at its sprawling network of fulfillment centers, where it ships everything from books to big-screen televisions.

The U.S. Department of Labor said this week that it’s examining two worker deaths at warehouses operated by the world’s largest online retailer. One man was crushed to death in December 2013 after getting caught between a conveyor system while sorting packages at a facility in Avenel, New Jersey, and another fatality occurred on June 1 at an Amazon fulfillment center in Carlisle, Pennsylvania.

The probes add to labor issues Amazon is facing as Chief Executive Officer Jeff Bezos spends to open new distribution centers worldwide. The Seattle-based company has faced criticism for treatment of its employees, including from labor unions. Earlier this year, an attempt to form a labor union of Amazon workers at a Middletown, Delaware, center was rejected by workers. Last year, Amazon also grappled with strikes in Germany, as warehouse workers demanded collective wage agreements and increases in minimum pay.

Amazon has been building more distribution centers to get closer to consumers to help speed delivery of items. As of mid-2013, the company had spent almost $13.9 billion on fulfillment expenses -- including 50 new facilities -- since 2010. Amazon had 89 warehouses at the end of 2012 and had announced five more for the U.S. last year. The centers are in locations from Beijing to across the U.S. in states such as New Hampshire and Indiana.

Photographer: David Paul Morris/Bloomberg

An employee loads a truck at the Amazon.com Inc. fulfillment center in Phoenix, Arizona, on Dec. 2, 2013. Close

An employee loads a truck at the Amazon.com Inc. fulfillment center in Phoenix, Arizona, on Dec. 2, 2013.

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Photographer: David Paul Morris/Bloomberg

An employee loads a truck at the Amazon.com Inc. fulfillment center in Phoenix, Arizona, on Dec. 2, 2013.

In the first quarter, fulfillment expenses climbed 29 percent to $2.3 billion. For this past holiday season, Amazon said it was hiring 70,000 full-time seasonal workers for its fulfillment centers.

OSHA Probes

The Labor Department’s probe is being handled by its Occupational Safety and Health Administration division. Ronald Smith, a temporary worker, died in December, OSHA said, citing five companies for violations at the Amazon facility in Avenel, New Jersey. Those included the contractor responsible for the sorting operation and four staffing agencies that hired temporary employees to work at the warehouse. Amazon wasn’t cited by the government for the death.

“Any accident that occurs in a facility is one too many and we take these matters seriously,” Amazon said in a statement.

The incident shows the risks of working at the facilities where everything from electronic gadgets to baby diapers are shipped to millions of customers. Amazon’s shares rose less than 1 percent yesterday to close at $326.27 in New York.

According to the Bureau of Labor Statistics’ preliminary data from the Census of Fatal Occupational Injuries, deadly work injuries involving contractor worker fatalities -- including temporary help service workers -- accounted for 708, or 16 percent, of the 4,383 fatal work injuries in 2012.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson

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