After Worker Died, Nike Barred Public Health Officials From Its Warehouse
Reprinted with permission from ProPublica.
MEMPHIS, TN — The security guard said no. It didn't matter that the visitor was from the Shelby County Health Department.
It didn't matter that she was there to investigate health conditions at a Nike distribution center where, five days earlier, company officials learned a temporary worker had died after testing positive for the novel coronavirus.
The security guard staffing the gate at the sprawling site said that without an appointment, no one could come in.
On the afternoon of April 16, the county environmental health employee left her card but without answers to a complaint the department had received that the giant athletic wear maker wasn't cleaning thoroughly or allowing for social distancing among workers.
The incident, which has not been reported before, illustrates a health department caught off guard by the refusal of a corporate giant to let it inside a southeast Memphis facility and the yawning communication gaps between the county agency charged with protecting the public's health and the state agency charged with workplace safety. At least one complaint about conditions at the facility visited by the environmental health worker was also filed with the Tennessee Occupational Safety and Health Administration, but it wasn't passed on to the county Health Department.
As of May 18, 21 workers at Nike's five Memphis warehouses and distribution centers have tested positive for the coronavirus, up from nine workers less than three weeks earlier.
Nike's footprint here is massive: In 2015, it opened its largest distribution center in the world, the 2.8 million square foot North America Logistics Campus, on the city's far north side. And with more than 5.3 million square feet of warehouse space in the metro area, Nike runs the region's largest proprietary distribution operation, according to the Memphis Business Journal.
About 3,100 employees work at Nike's distribution centers and warehouses across the Memphis metro area. They work to fulfill online orders from around the United States. Since Nike shuttered its physical stores in mid-March, such orders have soared. In at least one facility, workers were given masks with swooshes on them.
Between March 26 and May 12, the Health Department received 201 COVID-19 complaints about businesses, including concerns about nonessential businesses that were still operating, a lack of social distancing and insufficient cleaning. This particular Nike facility was the only one at which the department was turned away, Health Department officials said.
On April 17, a day after the security guard turned away the environmental health worker, whose formal title is environmentalist, a Nike administrator spoke to her by phone. The administrator said that, to protect workers, the company had installed markers on the floor spaced 6 feet apart and the facility closed every Tuesday for cleaning.
With that explanation, the Health Department was satisfied. The department did not return to the distribution center to verify that what Nike said was true.
The environmentalist “felt at that time there was nothing else that needed to be done," said Kasia Alexander, environmental health administrator for the department.
The department has the authority to summon police to access a business immediately, and has exercised that authority in the past, said Dr. Bruce Randolph, the department's health director.
But he defended the decision not to escalate matters. “We don't just automatically get law enforcement involved simply because the first time we show up, some security and management person refuses to allow us access."
A Nike spokesperson said the company has taken extensive measures to minimize workers' exposure to the virus, including expanding social distancing in doorways, breakrooms, the warehouse floor and other areas from 3 feet to 6 feet in early April. There's plexiglass separating workstations and markings on tables showing how far apart workers should sit.
And late last month, Nike began temperature checks for all employees, temp workers and visitors.
Still, a former federal OSHA administrator called the department's failure to demand access and follow up “absolutely inappropriate."
“The state and county officials are responsible for protecting the health of the public," said David Michaels, who worked in the Obama administration.
“The Health Department should know that this virus doesn't stop at the warehouse gate, that lack of social distancing in the facility will affect not only the workers there, and increase their risk of disease, [but] also their families and the entire community.
“By this action, they're putting all of Memphis at risk."
“America's Distribution Center"
The logistics industry employs 1 in 6 workers in the Memphis metro area, more than any other industry, according to the Greater Memphis Chamber. In the city, around 43,000 workers are in transportation and warehousing, according to 2018 census data, three times more than would be expected when compared with other cities.
For decades, city leaders have worked to cement Memphis' status as “America's Distribution Center," thanks in part to its favorable position on the four Rs: river, runway, rail and road.
Four Nike warehouses sit in southeast Memphis, where according to U.S. census data, the share of packagers and packers is nearly seven times higher than similarly sized geographic areas in other cities. The average hourly wage for packers in the metro area is $12.30.
In 2012, Nike received a nearly $58 million tax break over 15 years to create 250 jobs, retain more than 1,600 more, and expand distribution centers, including the company's largest distribution hub, which was briefly shuttered April 2 after a worker tested positive for the coronavirus.
In the last fiscal year, Nike reported more than $39 billion in revenue, up 7.5% from prior year, but the company is already tempering expectations for this year.
In a May 14 press release, Nike President and CEO John Donahoe said “the full extent of the impact of the COVID-19 pandemic on NIKE's operational and financial performance remains uncertain and will depend on many factors outside of NIKE's control."
A lone bright spot: “We have increased our digital fulfillment capacity to meet this higher than anticipated demand which is partially offsetting declines in NIKE-owned stores," Donahoe said.
In human terms, fulfillment is the manual process by which often low-wage laborers fill and package orders at sprawling distribution centers like the one at 5151 Shelby Drive, where signature orange swooshes adorn low-slung buildings. Upgrades to this center were also part of the tax incentive package.
On a recent afternoon, workers could be seen approaching a white tent, where a contract worker, wearing a T-shirt with a white cross on the back, held a temperature scanner.
When the day shift ended, hundreds of workers, some wearing red T-shirts with the name of the staffing agency Adecco on the sleeve, streamed out. A few sat shoulder to shoulder in front of an empty guard shack, waiting for a ride home.
On the day that the Health Department's environmentalist arrived, Nike and department officials said, she was met by a security guard who works for a third-party company. (The Health Department's records show that the Nike facility was at a different, but nearby, address.)
The city's highest-profile Nike executive conceded that it was a mistake to keep the Health Department out.
“If you're doing the right thing, you should give admittance to those people," said Willie Gregory, Nike's director of global community impact. In December, he was named board chairman of the Greater Memphis Chamber.
A Lack of Communication
Nike isn't the city's only distribution center where workers have tested positive for the coronavirus: At least three workers have tested positive at a Kroger warehouse that supplies about 100 area grocery stores; at least 10 have tested positive at the FedEx hub; and an employee has reported more than 20 coronavirus-infected co-workers at PFS, a distribution center that ships jewelry and makeup. PFS has declined to answer questions about the number of infected employees.
While the responsibility for providing a safe work environment falls to employers, holding them accountable is the job of TOSHA, Tennessee's equivalent of the federal OSHA. Protecting the public's health is the county Health Department's charge.
But the government agencies don't freely share information with each other, and the federal and state OSHA criteria that dictate whether businesses must report COVID-19 infections to authorities are so narrowly defined that few workplace infections fall under the record-keeping rules.
Randolph, the county health director, has said his department relies on workers to file complaints about their place of employment. Only 11 of the 201 COVID-19 business complaints filed between March 26 and May 12 were connected to warehouses or distribution centers. Advocates for worker rights have said the low number of complaints is more of a reflection of fear among workers and not exemplary working conditions.
And even though several warehouses have had multiple employees test positive for the virus, the Health Department is only tracking workplace clusters at health care facilities, such as nursing homes, not other types of businesses.
Asked why it's not tracking cases at other workplaces, Randolph said that TOSHA requires employers to maintain a log of work-related injuries and illnesses.
“Employees who become infected in the workplace as a result of being exposed to someone else who is infected, that's a work-related illness and that's reportable under TOSHA," Randolph said.
Although a Nike spokesperson confirmed 21 employees have tested positive for the coronavirus, a TOSHA spokesperson said the agency had not received notification from Nike about any COVID-19 workplace illnesses or deaths at any of the company's Memphis locations.
That's not surprising, Michaels said. According to TOSHA regulations, employers are not required to determine whether an infected employee contracted the virus at work in areas where there has been community spread, which would include Memphis and Shelby County.
And if a complaint submitted to TOSHA doesn't allege an immediate health risk, it likely won't prompt an investigation. The complaint that TOSHA received April 7 about the Shelby Drive distribution center was just such a complaint.
“Caller would like guidance on whether or not the workplace can be considered essential, and also has questions concerning the CDC's 6-foot distance rule," according to a summary of an after-hours voicemail left on the federal OSHA hotline. The summary is included in a TOSHA case file report.
Three days later, on April 10, Nike closed the warehouse for a deep cleaning that included electrostatic disinfection. The following day, Nike learned that a temporary worker who had tested positive for the coronavirus had died.
On April 13, the day that Nike reopened the warehouse, TOSHA determined that no inspection of the site was necessary, because no hazard had been alleged. The complaint was marked closed, and the county Health Department said it was never notified about it.
“It sounds like TOSHA is taking the lead from federal OSHA," Michaels said. “Rather than leaning forward, they're leaning back and they're not actively stepping in and saying how can we best make sure workers are protected."
That leaves workers with few options, Michaels said.
“They certainly can send complaints into OSHA and into the state and county health department, but workers without unions have very little protection."
A spokesman for the Tennessee Department of Labor and Workforce Development, which oversees TOSHA, said the agency “always has and continues to enforce the standards set forth by the federal OSHA program."
“These are the same standards that were in place when Mr. Michaels was in a leadership role at the federal agency," the spokesman said.
Based on its internal workplace notification criteria, Nike has notified workers four times at the Shelby Drive facility and three times at its facility in the Frayser neighborhood that workers have tested positive for the coronavirus.
Adecco, the staffing agency that employed the worker who tested positive and later died, said it “took swift action to notify our employees that a fellow team member was being tested for COVID-19, and Nike took the appropriate steps to evacuate the facility for professional sanitization."
“Those who worked in closer proximity to the individual received additional direction to self-quarantine for 14 days in accordance with CDC guidelines," Adecco spokeswoman Mary Beth Waddill said by email.
“While we can confirm our associate tested positive for COVID-19, we currently do not have access to his specific cause of death, and if we did, we would not be able to disclose details to protect this person's privacy," she said.
Adecco and Nike have been in frequent communication, Waddill said, and “will continue to evolve our thinking and employee resources during the course of the pandemic, and we are committed to keeping our people informed so that they can make the best decisions for their health."
Adecco is currently hiring temporary warehouse workers for Nike, with pay ranging from $11 to $14 an hour, according to its website.
Since being turned away on April 16 and the followup phone call the next day, the Health Department has had two interactions with Nike, a company spokeswoman said. On May 6, the spokeswoman said, a Health Department employee toured Nike's Frayser facility to review safety protocols after an employee's complaint. (A Health Department spokeswoman said that visit did not occur.)
On May 18, after a reporter interviewed Randolph for this story, a Health Department employee contacted Nike's environmental health director “to follow-up on positive employee cases, gather more details and begin contact tracing," the company spokeswoman said.
While the Teamsters represent some warehouse workers in Memphis, the vast majority are not represented. That's where organizations like Workers Interfaith Network, which advocates for worker justice, come in.
The network has fielded concerns from FedEx hub workers, but none at Nike, said Rev. Osagyefo Sekou, the network's interim executive director. With no union and without the financial cushion to stay home, low-wage workers are often left with no option but to return to jobs despite the risk of contracting the virus, Sekou said.
“People got to come to work because they need to make some money," he said.
“My grandma would say, 'If you give people chitlin' choices, they'll make funky decisions,'" he said. “For the poor workers, that's the choices they're given. So they gotta clean 'em, boil 'em up the best they can, put some hot sauce on it and keep it moving."
Wendi C. Thomas is the editor of MLK50: Justice Through Journalism. Email her at wendicthomas@mlk50.com and follow her on Twitter at @wendi_c_thomas.
MLK50 and ProPublica are investigating working conditions in warehouses across Memphis — particularly in the weeks since the COVID-19 pandemic has emerged. If you or someone you know can share more with reporters about your work experience, especially since March 2020, please email our reporting team at memphis@propublica.org, or call/text 901-633-3638.
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