Thursday, December 8, 2022
Dec. 8, 2022

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Amazon taps former Attorney General Loretta Lynch to run racial equity audit

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Amazon is launching a racial equity audit to examine any uneven effects of its policies, programs and practices on hourly employees.

Facing pressure from shareholders to provide more information about pay gaps, working conditions and procedures that may be negatively affecting women, people of color and other minorities, Amazon announced in a recent legal filing it had hired former U.S. Attorney General Loretta Lynch to conduct an audit to “evaluate any disparate racial impacts on our nearly one million U.S. hourly employees resulting from our policies, programs and practices.”

The audit is part of its “existing commitment to human and civil rights, racial equity, diversity and inclusion and nondiscrimination,” the filing read.

Amazon said it would publicly release the results of the audit but declined to share when it would be completed or specifics about what the audit would study.

The audit will include only hourly employees and will not include workers at Whole Foods or PillPack, Amazon’s pharmaceutical centers where workers pack and ship prescriptions.

Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison, a law firm based in New York City, will conduct the audit, and Lynch will lead it. The firm also recently represented Amazon in an antitrust lawsuit filed by Washington, D.C., Attorney General Karl Racine challenging Amazon’s pricing policies. In March, a D.C. Superior Court judge dismissed the case.

Amazon tucked the announcement of the racial equity audit into an annual filing with the Securities and Exchange Commission, ahead of its quarterly earnings call with investors next week and its meeting with shareholders in May.

A shareholder proposal requesting a similar audit failed to pass at Amazon’s last annual meeting, but 44% of stakeholders voted in favor of it. This year, shareholders again introduced a proposal for a diversity and equity audit, asking for a report that would analyze the effects of its policies, practices, products and services “through a racial equity lens.” It asks for an assessment of Amazon’s diversity, equity and inclusion strategy and its effectiveness as well as how the company is addressing any implicit biases.

“Because of the pattern and magnitude of controversies repeatedly facing Amazon, we believe that it is in shareholders’ best interests for Amazon to proactively identify and mitigate risks through an independent racial equity audit,” the proposal reads.

Ahead of Amazon’s annual meeting, shareholders also introduced several other proposals to study how the company’s policies and products could be contributing to racial and gender divides, including:

  • Whether Amazon’s health and safety practices give rise to any racial and gender disparities in workplace injury rates, affecting long-term earnings and career advancement for women and minority warehouse workers
  • More information on gender and racial pay gaps to address “structural bias” that women and minorities face regarding job opportunity and pay
  • A public report on the risk to Amazon of using contract clauses, like nondisclosure agreements, related to harassment and discrimination
  • And an independent study of Rekognition, a facial recognition system that Amazon Web Services markets and sells to government and shareholders say is “worse at identifying Black women than white men and misgenders nonbinary people.”

Amazon’s board of directors is recommending shareholders vote against all those proposals, as well as one that asks more broadly for a study on working conditions in its warehouses.

The board pointed to a report it released earlier this year that found the rate of injury at its facilities has declined and noted its investment in new technologies, research and procedures to protect warehouse employees.

When it comes to its facial recognition product offering, the board said Amazon is “committed to the responsible use of artificial intelligence and machine learning,” and had never received a report of the technology being misused “in the manner posited in this proposal.” Related to pay gaps and racial and gender disparities, the board said it regularly reviews employee well-being and workplace safety, and that Amazon is “committed to supporting and increasing diversity.”

Amazon’s board of directors is comprised of six men and five women, according to the SEC filing. Of 11 total members, it includes nine white people, one Black person and one Asian person.

It employs 1.6 million people worldwide.

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