Amazon is a bit of hot water of late with a racial discrimination suit having been filed by a former employee about tech behemoth’s hiring and employment practices toward minorities. It comes at a time when the company has seen record growth over the past year thanks to a massive, pandemic-related uptick in their overall services. But this latest lawsuit, if found to be accurate, paints a troubling picture of the company and its employment practices.
The lawsuit against Amazon was brought by current employee Charlotte Newman who is actually still working for the company in the position of manager. Her claims are broad but primarily focus on the company’s hiring and subsequent treatment of black employees. Newman claims the company purposefully hires black candidates at a lower level than their qualifications (de-leveling) but then tasks them with responsibilities of higher-level employees.
Additionally, in her suit, Newman asserts that Amazon offered her a job one pay grade below the one she was applying for and subsequently provided her a lower compensation package than others with similar qualifications. Among the many reasons this leveling is particularly problematic at Amazon is that the company will often provide compensation in the form of company shares which are decided based on level. Being hired below a qualified level means a significant discrepancy in available stock options for the employee. So from this standpoint, it wasn’t just the initial earnings potential she wasn’t afforded. When the stock price rose considerably, Newman claims the practice cost her much, much more.
That second part is key to the lawsuit brought by Newman against Amazon. The company has seen a significant stock increase over the last half decade but especially in the last year. Pandemic-related online sales and shipments went parabolic and Amazon saw its individual stock price rise from around $1800 per share at the beginning of the pandemic to around $3200 per share in recent trading. Around a 75% increase in stock price would greatly affect anyone’s bottom line, but especially if an employee missed out on shares because of racial hiring practices.
Amazon has said that it is investigating Newman’s claims to determine if practices around hiring did, in fact, have a racial bias. Newman’s current position at the company is Head of Underrepresented Founder Startup Business Development for Amazon Web Services. And her suit includes multiple entities within Amazon’s current structure. She’s worked in the company for a number of years in multiple higher-level positions.
Time will tell if this lawsuit against Amazon gains significant traction. It sounds like Newman has a well-documented case against the company at least from her own perspective and timeline. Whether she can prove it’s part of a larger, more calculated practice within the company remains to be seen. For the Jeff Bezos-led company, it represents just another issue they’ve faced regarding employment treatment over the years. Time will tell if this latest lawsuit finds that Amazon has been engaged in a disturbing practice and owes a significant amount of compensation to a group of its employees.