The new chief executive of the U.S. Postal Service previously owned and ran a company that was fined more than $1 million after it fired three female employees who reported that they had been sexually harassed by a company manager.
A jury in Tennessee awarded $1.5 million in 2013 in a sexual harassment and retaliation lawsuit against New Breed Logistics, a company run until 2014 by Louis DeJoy, who was tapped to be postmaster general on Wednesday. The jury found that New Breed had fired three temp workers for complaining about a manager’s “unwelcome sexual touching and lewd, obscene and vulgar sexual remarks” at one of the company’s warehouses in Tennessee. The company also fired a male employee who spoke out about the harassment.
DeJoy was not named in the lawsuit, and XPO Logistics, which purchased New Breed in 2014, said it has a zero-tolerance harassment policy and has taken steps to ensure that its employees are not subject to such conduct, or to retaliation for reporting it. But the EEOC noted that at the time of violations in Memphis, the company as a policy did not share its employee handbook, which outlined its sexual harassment protocols, with temporary workers—despite temps making up 80 percent of the people employed at the warehouse.
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In the years after that harassment lawsuit, employees of New Breed and, later, XPO said they miscarried after being asked to lift large boxes in its warehouses, according to a New York Times investigation. The incidents occurred both before New Breed’s sale to XPO and after, when DeJoy remained an XPO board member.
Those incidents could raise additional questions about DeJoy’s qualifications for the post of next Postmaster General, which effectively helps oversee a 600,000-strong workforce with a $71 billion budget. Already, his selection by the U.S. Postal Service’s board of governors this week has been criticized over allegations that it was done as a matter of political favoritism. DeJoy is a prominent ally of and donor to President Donald Trump and the lead fundraiser for this year’s Republican National Convention.
“President Trump rewards a partisan donor by installing him at the United States Postal Service,” said Rep. Gerry Connolly (D-VA), who chairs a House panel overseeing the USPS. “The Postal Service is in crisis and needs real leadership, and someone with knowledge of the issues. This crony doesn’t cut it.”
DeJoy’s appointment comes as the Postal Service is under immense financial strain as a result of COVID-19. The agency says it will effectively run out of money by the fall without significant financial assistance. Trump initially balked at a Postal Service “bailout,” and the agency and the Treasury Department are now hammering out the details of a $10 billion line of credit to keep the national letter-carrier afloat.
At the same time, the agency finds itself in the middle of a presidential vendetta against retail giant Amazon and its founder, Jeff Bezos. Trump frequently rails against the Postal Service, which he has called Amazon’s “delivery boy,” for offering “last mile” shipping services for Amazon deliveries, and pressured DeJoy’s predecessor to hike the rates the Postal Service charges to companies like Amazon for last-mile delivery.
DeJoy’s business background may draw additional scrutiny of his appointment. XPO Logistics does extensive business with the Postal Service, potentially putting him in the position of overseeing decisions that affect a former employer. DeJoy left the XPO board in 2018, but the company continues to rent warehouse space from him, according to filings with the Securities and Exchange Commission. In a filing with the Office of Government Ethics last year, DeJoy’s wife, who was nominated to be the U.S. Ambassador to Canada in February, reported that they owned between $25 million and $50 million in XPO stock.
The harassment and retaliation complaints against DeJoy’s company occurred while he was its chief executive. Those complaints centered on a supervisor in a New Breed warehouse in Memphis, who, according to a complaint from the Equal Employment Opportunity Commission, told female employees he wanted to “eat your pussy” and “fuck you good,” and remarks about one’s “fat ass.”
In one case, the EEOC alleged, the supervisor “touched [a female employee] inappropriately by rubbing her thigh and her butt, and blowing air down her neck.”
When one employee complained about the conduct, the supervisor told her, “If anyone goes to [the HR Director] on me, they will be fired.” Three temps eventually complained about the conduct and all three were fired. A forklift driver at the warehouse who witnessed incidents of harassment and corroborated them was subsequently fired after the supervisor falsely accused him of falsifying his timecard.
XPO referred The Daily Beast to a December 2018 release on its workplace harassment policy. “XPO does not tolerate any form of discrimination or harassment—period,” the release reads. “We treat any reports of this nature with utmost seriousness, thoroughly investigate claims, and take decisive action if our policies have been violated or if they need to be improved.”
The release also addressed the numerous miscarriages in the very same Memphis warehouse detailed in a 2018 New York Times investigation. XPO announced new protocols to protect and accommodate pregnant employees, and declared its “zero tolerance for discrimination or harassment.”
The Times report identified six women who miscarried at the warehouse after lifting heavy objects on the job and being denied breaks during work hours between 2014 and 2018, while the facility belonged first to New Breed and later to XPO. XPO subsequently shuttered the Memphis warehouse, citing a decline in business from its chief customer there, Verizon. That led to another complaint with the EEOC from employees who alleged the facility’s closure was retaliation for complaints about unsafe working conditions there.
The Teamsters Union, which had been trying to organize workers at the warehouse, also alleged that its closure was motivated by unfair labor practices.
While that was not substantiated, New Breed was previously rapped by federal authorities for labor law violations. In 1994, while DeJoy helmed New Breed, the company became embroiled in a dispute with the International Longshoremen’s and Warehousemen’s Union after securing a contract to run a U.S. Army terminal in Compton, California. The company deliberately avoided rehiring the then-current staff at the facility, who had a collective bargaining arrangement with the previous operator. The ILWU filed a complaint with the National Labor Relations Board, and the federal regulator found New Breed had acted with illegal “anti-union animus.”
DeJoy was named multiple times in the case, and a New Breed manager testified the CEO had personally made the decision to employ non-union workers. Federal courts subsequently affirmed the NLRB’s findings.
