"Disturbing," "inhumane" and a cause of "deep concern," — that's what members of Congress wrote in a series of letters about recent events at a Verizon-contracted warehouse in Memphis, Tennessee.

A New York Times investigative article, published in October, found six women were subject to pregnancy discrimination by New Breed Logistics, a warehouse service provider, and eventually miscarried.

At least five of the women who miscarried had asked their supervisors for lighter lift loads, according to the article. They also brought in doctors notes recommending less taxing work, but their requests were denied. The American College of Obstetricians and Gynecologists say "extensive lifting" can increase the risk of miscarriage.

At least one of the women has since filed a complaint with the Equal Employment Opportunity Commission — four years after the events took place. In April 2018, Tasha Murrell filed her complaint, alleging her supervisor had told her to get an abortion before she miscarried in 2014. That year, three other women suffered the same fate, the New York Times reported.

Since the report, New Breed Logistics’ parent company —  XPO Logistics — and Verizon have been facing scrutiny from regulators over working conditions at their facilities.

In the House of Representatives, 97 members sent a letter to the House Committee on Education and the Workforce, urging the legislative body to investigate XPO on more than just the pregnancy issue.

"Hundreds of thousands of workers could be at risk at XPO Logistics facilities if the aforementioned allegations are accurate," the letter reads. "While the current issues raised may be isolated, further investigation and oversight should be executed to ensure that hundreds of thousands of workers, nationwide, are not at further risk."

The issues at stake

In a letter to the House Committee, representatives listed a number of issues they would like to include in an investigation of XPO:

• Alleged pregnancy discrimination
• Sexual harassment
• Suppression of efforts to organize
• Misclassifying truck drivers
• Unsafe and hazardous working conditions

Save for the gender-based issues, the list should feel familiar to those in the logistics industry. But it’s the Senate letters that opened a can of worms in the supply chain. Nine senators asked the CEOs of XPO and Verizon to provide evidence of compliance with labor safety best practices, among other tough questions — some of which may directly affect supply chain management as a profession.

"Do you believe that Verizon has any responsibility to investigate the workplace conditions of its contractors or subsidiaries?" reads a question in the letter to Verizon CEO Hans Vestberg. Verizon did not respond to Supply Chain Dive's request for comment. 

The question to the CEO reveals the critical underlying issues behind the events in Memphis, Tennessee:

• Even if the miscarriages were isolated incidents, what responsibility does each actor in the supply chain have in preventing these?
• Did XPO Logistics, as the parent company, and Verizon, do their due diligence to prevent these issues from happening in the first place?
• What does that due diligence look like?

The risks of rapid expansion and acquisition

The last question puts the spotlight more on XPO than on Verizon.

The New York Times reported XPO Logistics did not own New Breed Logistics until September 2014, when it acquired the company for $615 million.

Four of the miscarriages reported by the New York Times happened that year. In a statement to the newspaper, an XPO spokeswoman said: "We’re surprised by the allegations of conduct that either predate XPO’s acquisition of the Memphis facility or weren’t reported to management after we acquired it in 2014.” 

The company also said the allegations were "unsubstantiated, filled with inaccuracies and do not reflect the way in which our Memphis facility operates."

In conversations with Supply Chain Dive, XPO declined to comment on what the company knew about working conditions, prior to the acquisition. Asked about the strategic reasons behind the purchase, a spokesperson pointed Supply Chain Dive to a press release from 2014. 

"New Breed is a jewel in the crown of contract logistics: a world-class provider entrusted with critical services by some of the most prestigious corporate names in America," XPO CEO Bradley Jacobs said at the time. "We'll gain leadership in one of the most financially attractive sectors of contract logistics, and we'll use our new platform to engage customers in our broader offering, just as we've done over the past 12 months with our acquisitions of 3PD, NLM and Pacer."

As Jacobs hinted in his statement, XPO was in a growth spurt at the time. Between 2011 and 2017, XPO grew its revenues from $44 million in 2011 to $15.3 billion in 2017, with New Breed Logistics as part of that expansion.

In XPO's 2017 Annual Report, the company acknowledged litigation as a high risk factor for the company. "The nature of our business exposes us to the potential for various types of claims and litigation," the report reads. "Businesses that we acquire also increase our exposure to litigation."

USA Today published an investigative article in June 2017 on the financial quandary independent contractors face, highlighting an example from an XPO Logistics subsidiary: Pacer Cartage.

Earlier this year, the Los Angeles Times honed in on misclassification issues at another XPO Logistics subsidiary: XPO Cartage, a drayage company that operates at the ports of Los Angeles and Long Beach. And more recently, the Los Angeles City Council temporarily blocked a request from NFI Logistics to build a new warehouse due to alleged labor practices at one of its subsidiaries: California Cartage.

In a statement to Supply Chain Dive, NFI Logistics said it stood by its decision to classify drivers as independent contractors, citing it was their choice to do so. XPO Logistics provided a similar response when asked about the issue, as raised by the House of Representatives letter.

"If any of our independent contractors would prefer to work as an employee driver, we have employment opportunities in our Southern California locations," an XPO spokesperson said in a statement, noting workers have the right to choose the employment model that "best suits their needs."

How XPO is responding

Since the two letters from Congress, XPO has published a wave of press releases and statements related – either directly or indirectly – to labor conditions.

On Dec. 4, the day the House of Representative's letter was released, XPO released a statement, "Our Commitment to Our People," saying it is “deeply troubled” by the media allegations and outlining steps it is taking to address them.

That same day, XPO released a statement outlining its response to the Senate letter, which was provided to Supply Chain Dive. In the statement, the company announced:

• It had asked Tina Tchen, a gender equity expert, to conduct an independent investigation into the overall workplace culture in May. Tchen will also look into the recent allegations at the Memphis, Tennessee warehouse. "We are committed to implementing any recommended improvements," the statement reads.
• XPO had enhanced its benefits policies, which increased support for pregnant employees. A spokesperson provided a fact sheet to these, which can be seen here. "As a woman, and as part of the XPO family, you’re entitled to special consideration if you’re expecting a baby," the fact sheet reads.

In addition, on Dec. 6, XPO unveiled a free training program for owner-operators who would like to transition to employee status.

From truck driver classification issues to pregnancy and gender equity concerns, XPO has made a clear push to correct its image. Many of the initiatives, however, had already started prior to the October story that began the public relations storm.

Legislators appear satisfied so far. In statements, the two lead authors of the House of Representatives letter signaled they saw the actions as a "first step" to improved working conditions.

"XPO’s announcement is a welcome first step to ensure pregnant workers are provided the appropriate accommodations for their health and the health of their baby," said Rep. Rosa DeLauro, one of the letters’ two primary authors. She also said she looks forward to ensuring the company "makes good on these policies."

Rep. Steve Cohen of Tennessee, the other primary author, struck a similar tone.

"I’m encouraged that XPO Logistics has made good on its commitment to me when we met in Memphis to make substantive reforms,” said Rep. Cohen. "I believe this is a step in the right direction, but we must continue to ensure that all workers are treated fairly, that the law reflects that and that companies across the country adhere to these core American values."