In 2010, Everlane set out to disrupt to “modern basics” market by “partnering with the best, ethical factories around the world,” “sourcing only the finest materials,” eliminating the “traditional retail markup,” and sharing the process with consumers – from the actual cost of manufacturing and shipping the products to certain information about the factories where its products are made. At the heart of the San Francisco-based direct-to-consumer brand’s model is a larger emphasis on what it calls “radical transparency.”
To date, this model – one that sees Everlane roll out high-quality yet affordable wares with a buzzy “transparency”-centric message – has successfully enabled the brand, under 30-something founder Michael Preysman, to become one of the poster-children of the direct-to-consumer (“DTC”) retail revolution.
The 10-year old company has found devoted fans in consumers, amassing revenues of $100 million beginning in 2016, bringing its valuation to a reported $250 million as of that same year. Investors have also globbed onto the startup, which has raised $1.2 million from Imaginary Ventures (the fund that Net-a-Porter founder Natalie Massenet launched in 2018), 14W, Popsugar founder Brian Sugar, and Light Street Capital, among others.
Speaking to the remarkable rise of his company, whose name is often included among the likes of fellow DTC-ers, such as Casper, Allbirds, Away, M. Gemi, Harry’s, and Glossier, etc., Preysman told CNBC in September 2019 that “it’s pretty hard to run a business [with an emphasis on transparency], but we tell you everything … People know that we have to make money at the end of the day and they feel good about supporting someone that is not ripping them off because they trust us.”
Now, that element of transparency – one of the things that has fundamentally helped Everlane to stand out and thrive in a crowded retail market – is being questioned.
The public-facing pushback started late last year when a group of individuals, who describe themselves as “a remote, part-time Customer Experience team” for Everlane, came together and issued a statement. Citing “low pay, nonexistent benefits, unpredictable scheduling,” according to Vice, the group revealed that they intend to unionize. Vice noted that the “cadre of part-time remote workers who make up a key piece of the [Everlane] business … make around $16 an hour and don’t receive healthcare or other benefits,” something that is “not disclosed in [Everlane’s radical transparency] formula.”
In their December 21 release, the group stated that their “compassion, diligence, and dedication to the core tenets of this brand have shaped the value that hundreds of thousands of customers place on shopping with Everlane.” With that in mind, they are seeking “fair compensation for [their] contributions, the flexibility to balance a second job, family commitments, or education, and a clear path forward for professional development,” which they aim to achieve by unionizing with the help of Communications Workers of America. (Yes, part-time and nontraditional staffers can unionize just like their full-time counterparts.)
The group’s efforts have allegedly been met with “concerted effort [by Everlane] to keep [them] from unionizing.” In particular, Everyone’s head of HR Kelly McLaughlin “sent out two misinformation-riddled emails about the supposed negative effects of a union,” according to Vice, noting in one that “signing [a union contract] is a major step because it is a legal document that can designate the union as your exclusive representative and forfeit your right to deal directly with us to resolve issues.” Vice’s Anna Merlan asserts that McLaughlin’s statement is not necessarily true given the flexibility in defining the terms of the union contract.
Reports about Everlane’s alleged efforts to potentially deter unionization raise questions, including whether the brand could be on the hook from a legal perspective. That answer, of course, depends.
For one thing, the National Labor Relations Act (“NLRA”) – the federal labor law that codified the right of private sector employees to form trade unions, engage in collective bargaining, and take collective action – certainly forbids employers from “interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes.” It also prohibits employers from preventing employees “from working together to improve terms and conditions of employment, or refraining from any such activity.” And outlaws retaliation against employees for unionizing or attempting to unionize.
However, at the same time, the law states that an employer may express of “any view, argument, or opinion” about unionization – and disseminate that opinion “in written, printed, graphic, or visual form” – without it constituting an unfair labor practice as long as that expression “contains no threat of reprisal or force or promise of benefit” against employees. In short: employers can generally talk about (or email about) not liking or wanting employees to unionize without running afoul of the law, as long as they do not overstep in the form of the aforementioned off-limits acts.
It is worth noting, though, as Helen Norton does in her article, “Truth and Lies in the Workplace: Employer Speech and the First Amendment,” that courts and the National Labor Relations Board, alike, “have sometimes interpreted [the NRLA] to prohibit certain employer nondisclosures, lies or misrepresentations,” including about “workers’ legal rights,” as “coercive and thus, actionable under [the NLRA] as unfair labor practices.”
How Pervasive is the Problem?
While a rep for the group of remote workers revealed on Instagram on January 7 that there have been “no big updates” to report about their plans to unionize “yet,” updates have come elsewhere. As a result of further investigation, Vice revealed in a follow-up article on Monday that Everlane employee dissatisfaction is more prevalent than meets the eye.
Retail employees at the company’s New York stores, for instance, have expressed “concerns [about] pay and scheduling.” However, Vice asserts that “among their most serious allegations [is] Everlane management’s attempts to keep them from discussing their wages with their coworkers, which would be a violation of both federal and New York state labor laws … as both the NRLA and New York state law dictate that companies cannot forbid their workers from discussing their wages.” In short: employees allude to a “company culture seemingly intent on keeping them from comparing notes and banding together to improve their working conditions.”
A rep from Everlane’s outside PR company confirmed to Vice that “in [an] all hands meeting in August” there was talk of employee wages. Faced with a question about wage increases, Everlane’s VP of Retail Tara Shanahan reportedly told employees in the meeting, “‘We would advise that it’s best practice’ to not talk about wages with co-workers.” Everlane’s rep now says that the message that was relayed was, instead, that the meeting “was not the right setting to share wage information,” noting in the statement that “employees are of course free to share wage information if they choose to.”
In a statement of its own, Everlane asserted that it is “confident” that the company “follows all legal guidelines regarding things like breaks and freedom of speech.” However, “that doesn’t mean we do everything right.” The company says that it has “completed a full investigation and worked quickly to start making changes where necessary” in connection with conditions in its New York stores, including store-specific leadership changes.
As for the push for unionization among Everlane’s remote, customer service staffers, it comes amidst a shifting landscape for the retail industry and its workforce.
“Retail workers get little attention in major discussions about employment in America, in part because the jobs are widely seen as low-skill, low-pay, temporary ones done by young people,” Racked wrote in 2017. Yet, increasing frustration with fluctuations in hours, which often leads to cuts in pay, paired with the uncertainty that comes with working in an industry that is consistently under threat by changing consumer habits and technology, has led to something of an uptick in retail worker organization, even amidst a marked downturn in union membership in the U.S. compared to previous decades. (The share of American workers who belong to labor unions has fallen by nearly 50 percent over the past 35 years, according to Pew Research Center.)
Such efforts at organization without unionization have come in the form of campaigns like Rise Up Retail, which largely consists of “retail workers reaching out to other retail workers to organize and mobilize them,” according to Vox, or OUR Walmart, the 9-year old “non-union group of Wal-Mart employees that intends to press for better pay, benefits and most of all, more respect at work,” as the New York Times described it.
Not all formal unionizing efforts are dead, though. As of this summer, CNBC reported that “recent worker protests point to organizing efforts” by Amazon employees, as “three big unions – the Teamsters, the United Food & Commercial Workers Union and the Retail, Wholesale and Department Store Union – are among those talking to Amazon workers.” According to CNBC, “The last official unionizing attempt at Amazon was in 2013, when maintenance and repair technicians in Delaware filed with the National Labor Relations Board. The union was voted down 21 to 6.”
Meanwhile, staffers at individual stores for retail giants like Target and multi-national chains like Ikea, for instance, have unionized in recent years. And if at least some of its workforce has their way, Everlane might prove to be the next name on this list.