Technology

Big Trouble in Little Etown

Although the dot-com fired some of its staff, the employees are still proceeding with their planned union election.
Craig SchneiderDecember 4, 2000

Calling it bad timing would be an understatement.

Etown.com cut 22% of its staff on Friday just days after employees filed a petition to hold an election on union representation. And that has labor organizers crying foul.

However, Etown.com organizers will still go through a formal hearing with the National Labor Relations Board (NLRB) on December 13, choosing instead to make its unfair labor charges a separate matter rather than delay the election.

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“It doesn’t mean that it (the firings) changes the election in terms of timing or the appropriateness of the unit,” says Sheila Sexton, associate attorney at Beeson, Tayer, and Bodine, a San Francisco firm representing the labor organizers.

Execs at the electronics product review site say the near simultaneous staff reduction and union organizing attempt are unrelated. But, regardless, the decision to fire could seriously backfire.

“It’s just a little too coincidental,” says Erin Poe, an organizer with The Newspaper Guild-Communications Workers of America, who filed unfair labor charges and an injunction with the NLRB against the San Francisco startup.

The allegation impetus: Thirteen of the 26 job cuts came from customer service, the group that hopes to unionize. Last Monday, they filed an election petition with NLRB after showing a strong 70% support for the union election, well above the 30% minimum.

Prior to this wave of layoffs, Etown.com, which is owned by Collaborative Media, employed 127 workers, including 36 customer service reps.

Terminating employees with loss of jobs or benefits if they join or vote for a union or engage in protected concerted activity violates the National Labor Relations Act. Click for NLRB Fact Sheet

Etown.com denies the charges. “There is absolutely no relation whatsoever,” company spokesperson Steve Ramirez told CFO.com. What’s more, the layoff decision was made more than two weeks ago.

It seems that like other Internet startups, Etown.com hired additional service reps in anticipation of a strong holiday shopping season, but it has “not gotten off to a strong start,” Ramirez says. So the company, which has also been in the process of going for its third round of financing, made cuts and adjusted its business plan.

It’s a common tale these days for dot-com companies: “Due to ongoing pressures from our investors and the generally poor condition of the financial marketplace, we are compelled to accelerate our path to profitability,” says Collaborative Media president and COO Lew Brown in a written statement.

That profitable path includes reducing the company’s business-to-consumer operational costs and focusing on its core competency of creating and licensing Web content to other businesses. Etown.com also cut jobs in sales, marketing and content development.

Brown calls the union petition events of last week an “unfortunate coincidence.” But that may ultimately be something for the courts to decide.

Robert Miller, San Francisco regional director of the NLRB, says most elections occur within 42 days of the filing. That puts Etown.com on track to vote by mid-January. And just because the service reps are discharged doesn’t mean they are not eligible to vote.

“They can vote as long as there’s a reasonable likelihood that they will regain their employment,” Sexton says. But that will probably be litigated at the hearing or afterward.

If the fired Etown employees are not excluded from the election, and there is a majority in favor of unionizing, the company would become the first dot-com to organize. However, first Etown.com will go through a formal NLRB hearing on December 13.

The remaining pro-union service reps are unsure where organizing efforts will go from here. “I feel it definitely lessens the power of our voice if we are a smaller department — less than half of what we were,” says Eric Anderson, a senior customer service representative still working for the company. “It may delay things and complicate things.”

Still, Etown organizing events are progressing a lot faster than the Amazon.com union drive, in which 400 customer service reps have yet to gain the minimum support to file with the NLRB. Both are sending a wake-up call to the rest of the industry. Click to read “Is Amazon.com Unionizing Contagious?”

Why Workers are Organizing

Several dot-coms are cutting costs with layoffs, making job security an issue for employees. Add to that worker complaints of low hourly wages, worthless options and erratic scheduling around the holidays, and just about any e-commerce startup could be facing labor organizing.

Etown says it made cuts based on seniority and it continues to insist on its “open door” policy for employees to voice issues and concerns — a policy that does not fly with Anderson.

“Many people are scared to go to the ‘open door policy,’” he says, “If they go through it, they may feel that they may lose their job, and the ‘door’ will be slammed shut.”

Prior to Friday, the company fired four other service reps involved in earlier labor organizing activities that date back as early as an October “sick-out.”

There was another unfair labor charge filed on November 22 with the NLRB for those four employees. The company, again, denies the charges.