Tale of Two Cities: Tech Companies Review Contract Employee Practices as Drivers Seek to Unionize

The US Supreme Court just heard arguments in a case brought by Amazon warehouse workers who want to be compensated  for the mandatory inspections they must endure at the ends of their shifts and for which they are currently denied pay.

Google is promising to hire 200 security guards as Google employees after reports surfaced that its contract guards were being underpaid.

Uber's drivers are beginning to challenge its pay practices.

And Facebook is confronting what is probably a first but not last unionization effort by the drivers of those controversial  Bay Area buses that shuttle tech workers from The City down to their offices in Silicon Valley.

The issue is the disconnect between tech companies with multi-billion dollar valuations and the often paltry compensation received by those enterprises' contract workers. While many Facebook, Google, Apple and similar employees in northern California are relatively well paid, they are surrounded by others who work for the same companies but who are contractors, frequently part-time, and often unable to support themselves and their families on what they earn in an industry with generous margins.

The industry faces a perception issue which may be contributing to an erosion of reputational equity. More ominously, this may, in turn, lead to a  more tangible problem, which could, ultimately, include legislative regulatory mandates. JL

Steven Greenhouse reports in the New York Times:

Companies are constantly seeking to underbid one another for contracts. “That hampers their ability to pay these workers decently, and that keeps pulling the common denominator down.”

They shuttle highly paid Facebook employees to and from the company’s headquarters in Silicon Valley, yet many say their pay is so low that they can’t afford to live in the area. Moreover, many complain that they start work around 6 a.m. and do not finish until 9 p.m., 15 hours later.

Now, some of these shuttle bus drivers, who get Facebook employees to work, are seeking representation by the Teamsters union. And, in a move to help make that happen, the union has written to Mark Zuckerberg, Facebook’s chief executive, asking him to intervene on the drivers’ behalf.

In a letter sent on Thursday, the top Teamsters official for Northern California urged Mr. Zuckerberg to press Facebook’s shuttle bus contractor to agree to bargain with the union on behalf of the 40 drivers who ferry Facebook employees to work.

“While your employees earn extraordinary wages and are able to live and enjoy life in some of the most exclusive neighborhoods in the Bay Area, these drivers can’t afford to support a family, send their children to school, or, least of all, afford to even dream of buying a house anywhere near where they work,” the Teamsters official, Rome Aloise, said in the letter.Mr. Aloise added: “It is reminiscent of a time when noblemen were driven around in their coaches by their servants. Frankly, little has changed; except the noblemen are your employees, and the servants are the bus drivers who carry them back and forth each day.”

Mr. Aloise said the Teamsters were first seeking to unionize Facebook drivers, and then hoped to organize drivers for Google, Apple and other Silicon Valley companies.

“You have to start someplace,” Mr. Aloise said by telephone. “We hope there will be a domino effect. If we get Facebook and a decent contract, others will follow.”

Cliff Doi, 55, a Facebook bus driver, said the biggest problem was not the pay, but a grueling split-shift schedule. He starts work at 6:10 a.m., shuttling Facebook workers from Mountain View, Calif., to the company’s headquarters in Menlo Park. He finishes his morning shift at 11:10 a.m., he said, and resumes work at 5:15 p.m., to shuttle Facebook employees home, with that shift ending at 9:45.

He said that like many drivers, he lives far enough away that the prospect of driving home for a few hours before turning around and driving back to work is not appealing.

Many drivers try to nap in their cars during their break, covering the car windows with a blanket. Some hang out in Facebook’s cafeteria.

“I’d like to have a union come in and see if they can negotiate something about this six-hour split, so it would be more comfortable for the drivers in some way,” said Mr. Doi, who earns $20.80 an hour. “Maybe the union could come up with some creative way to help with the schedule.”

Facebook declined to comment, although one company official, who spoke on the condition of anonymity because of the sensitivity of the issue, said Facebook had signed a contract with the bus company for a certain amount of money, and that it was the bus company that set drivers’ wages and schedules.

Jeff Leonoudakis, president of Facebook’s shuttle bus contractor, Loop Transportation, said many Facebook drivers earned $18 to $20 an hour.

“We believe that we take really good care of our drivers,” Mr. Leonoudakis said. “They’re the heart of our company. Without them, we can’t provide service to our customers.”

He also said Loop provided a generous medical and dental insurance plan.

“We pay overtime, which most of our competitors do not pay,” Mr. Leonoudakis added, noting that the company provided vacations, sick leave and holiday pay.

“In keeping with the fact that we provide this high level of wages and benefits to our drivers, I don’t think the union is necessary in this case,” he said.

Mr. Leonoudakis acknowledged that the split shifts were a strain for drivers.

“The split shift is a necessity — that’s what our customers are asking for,” he said. “We are trying to make the conditions as pleasant and comfortable as we can.”

He added, “I don’t have an answer for” the split-shift problem. “I don’t think anyone in the industry does.”

Some drivers have suggested an expensive solution: that the bus companies keep two sets of drivers, giving full-time pay for the part-time morning shift and the same for the evening shift.

Mr. Leonoudakis said his company has set up a lounge for the drivers with reclining chairs and a big-screen TV at the Loop bus parking lot that Mr. Doi uses. He said the company was putting in bunk beds.

That lounge is in a trailer, Mr. Doi said, adding that he had not seen any bunk beds and that the reclining chairs were less than ideal for napping.

Jimmy Maerina, 54, another Facebook driver, said the split shifts have made his life miserable. He said he leaves home at 5 each morning and returns at 9 at night.

“You spend 16 hours a day — no time for family, no time for the kids,” Mr. Maerina said. “When I leave home in the morning, my kids are sleeping, and when I get home at 9, they’re done with their homework.”

Mr. Maerina, who earns $18 an hour and was out temporarily with an injury, said his 51-passenger bus had been attacked by San Francisco residents who resent highly paid high-tech workers pushing up rents and gentrifying neighborhoods, forcing out some longtime residents. “It’s very hard for me to make ends meet,” he added. “Housing costs are crazy in the Bay Area.”

In recent months, labor groups have complained that Silicon Valley companies use outside contractors that provide far worse pay and benefits than the high-tech companies provide to their direct employees.

Responding to such pressures, Google has said it planned to hire more than 200 security guards as its own employees, instead of getting them through a contractor — a move expected to lead to better wages and benefits for the guards.

The Teamsters say a majority of the Facebook drivers have signed cards saying they want Teamsters Local 853 to represent them. Mr. Aloise said the Teamsters were pressing Loop Transportation to grant union recognition based on those cards, but added that if the company refused, the union would seek an election to show that a majority favored joining the Teamsters.

One big problem, in the Teamsters’ view, is that the bus companies are constantly seeking to underbid one another for contracts. “That hampers their ability to pay these workers decently,” Mr. Aloise said, “and that keeps pulling the common denominator down.”