Instacart has 10 employees who voted to join the United Food and Commercial Workers Local 1546 union, and the company laid all of them off.
It sounds like a terrible thing to do, and it also sounds incredibly illegal. Employees have the right to form unions, and the National Labor Relations Board tends to come down hard on companies that try to quash these rights. (And, under a Biden administration, you can expect those rights to be strongly enforced.)
But the important part of this layoff is below the headlines: “According to the UFCW, Instacart is firing nearly 2,000 of its 10,000 grocery store workers as part of these layoffs, and offering as little as $250 as severance.”
David Miklas, a Florida-based employment lawyer, explains:
If the employer laid off only those who voted to unionize, it would look like retaliation and likely violate the [National Labor Relations Act] NLRA, as it would likely have a chilling effect on employees exercising their NLRA Section 7 rights. Although I read that “Instacart is laying off every employee who voted to unionize,” it appears that the layoffs only impact 10 unionized workers at a grocery store in Skokie, Illinois, who voted to unionize last year and were currently in the process of negotiating their first contract.
At first, this sounds illegal and retaliatory, but these 10 employees only make up 0.5 percent of the total company layoffs. If challenged, Instacart will have to be prepared to explain how it selected the employees to lay off. Due to the massive amount of other employees laid off, it appears at first blush that it may have a solid defense. Of course, it may have to spend a bunch of money on legal fees to defend its action, if challenged by the union.
This is an example of much ado about nothing. Layoffs happen, and if Instacart has a good reason for selecting the employees in Skokie, Illinois, along with 1,990 others, the company will win any court battle.
However, if the union can show that Instacart targeted this group of employees because they unionized, then Instacart will be in trouble.
While this particular action will probably come out in Instacart’s favor, Instacart has found itself paying out money to settle employment disputes in the past. In 2017, Instacart settled a lawsuit that claimed improper tip pooling and other employment violations for $4.6 million. Instacart denied any wrongdoing but did make changes.
Because most of the people who work for Instacart are, in fact, contractors, Instacart may find additional labor problems in its future as states move to place stricter requirements on companies that use contractors, with California and New Jersey leading the way.