Burberry Closes Lone U.S. Warehouse After Workers Test Positive

(Bloomberg) -- The luxury brand Burberry is famed for plaid scarves and $1,800 trench coats. But for employees at its only warehouse in the U.S. -- operating as an “essential business” during the pandemic -- daily standard issue in the time of Covid-19 is this: one surgical mask, one disinfectant wipe.

For weeks, employees have been growing increasingly anxious about working conditions at the New Jersey facility, the British company’s gateway to the U.S. market.

Burberry Closes Lone U.S. Warehouse After Workers Test Positive

This past weekend, they found out that a total of three workers had tested positive for the virus, according to a memo sent to employees and viewed by Bloomberg News. The facility will be shut indefinitely.

The 300 employees at the warehouse in Vineland are among the many thousands of mostly low-paid workers across the economy keeping retailers afloat. While steps taken to contain the coronavirus have resulted in shuttered shops nationwide, warehouse workers continue to fill online orders. Concerns about their safety persist. Employees at retailers that stock general goods such as Amazon.com Inc. and Walmart Inc. have become sick even as other businesses, deemed non-essential, remain closed.

Several Burberry warehouse workers said they felt unsafe at work. They said social distancing was difficult to practice and that equipment was shared.

A Burberry spokesperson said the New Jersey location had reduced capacity by splitting the workforce into separate shifts, each fewer than 50 employees, down from between 150 and 300. The company said it provided hand sanitizer, wipes and surgical masks. Workers continue to receive full wages.

Confidential Hotline

“Throughout, we have closely followed government and health authority guidelines and put in place measures aligned with these that are designed to help prevent the spread of the virus and ensure everyone’s safety and well-being,” the company said in a statement. “We have a confidential hotline for employees to share any concerns they may have. If anyone is uncomfortable for any reason, we are allowing them to stay home on full pay until further notice.”

Workers said the company began taking their temperatures when they arrived for their shifts last week, nearly two months after the pandemic struck New Jersey. But the procedure was stopped several days later due to a faulty thermometer, the workers said.

“We are currently exploring having a third-party on site to provide temperature checks when we eventually reopen,” the company said.

Issuing Paychecks

Unlike most retailers, Burberry has not placed employees on furlough and continues to issue paychecks to its 10,000 workers in the U.S. and abroad. Executives took a 20% pay cut into June and the company has said it won’t accept government money to pay staff.

Burberry warehouse employees said that after the first employee contracted the virus, the company distributed a memo. However, rumors persisted about the illness of two additional employees. Warehouse workers said they were told about these two cases only after Bloomberg News asked Burberry to comment.

Burberry disputed this, saying it informed workers each time an employee became ill.

Essential Employees

A prolonged closing of the New Jersey warehouse, 40 miles south of Philadelphia, would extend shipping times for shoppers. The company, for whom the Americas are responsible for more than one-fifth of annual sales, said it has no current plans to shut down its U.S. e-commerce site and will warn customers of delays.

The company said its sales may have fallen as much as 80% in the final weeks of March, and workers said orders were down noticeably.

Burberry said the warehouse had remained in operation because it met the requirements for an essential business set by New Jersey Governor Phil Murphy.

The company provided workers with an essential-employee letter signed by Ashley Peña, a human-resources official. The document, dated March 23, was shown to Bloomberg News by an employee who said they were told to carry it on their way to work.

“Please accept this letter as confirmation that this employee is a warehouse worker at the Burberry (Wholesale) Limited distribution center,” it read. “As a warehouse worker, this employee needs to be physically present at the work site in order to perform their duties.”

Stagger Shifts

One employee, convinced the warehouse was not doing essential business, reported the company to state authorities. Murphy’s office declined to comment on whether the facility is essential, referring questions to state Attorney General Gurbir Grewal. A representative of Grewal’s office said it was looking into the matter.

Most U.S. apparel warehouses have remained open during the pandemic. They’ve been classified as essential logistics operations.

In an April 8 executive order, Murphy mandated that warehouse operators must stagger shifts and lunch breaks, limit sharing of tools, provide hand sanitizer and sanitizing wipes, clean and disinfect according to Centers for Disease Control and Prevention guidelines, and promptly notify workers if someone in the workplace tests positive for Covid-19.

Companies have a legal duty to tell employees about positive tests, said Aaron Olsen, a partner at the Haeggquist & Eck law firm focused on employment law.

“If they’re not doing that, employees have a right to complain to” the U.S. Occupational Safety and Health Administration, or OSHA, Olsen said. “Even at businesses that are truly essential, they need to be creating a safe environment.”

©2020 Bloomberg L.P.

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