Christian Hansen for The New York Times
Union officials and community leaders attended a rally on Thursday across the street from the Fresh Direct plant in Queens. Two unions are vying to represent workers there.
Ruby Washington/The New York Times
People lined up on Tuesday to apply for jobs at the Fresh Direct plant in Long Island City.
Groceries on the Computer, and Immigrants in the Cold By NINA BERNSTEIN
Published: December 22, 2007
For New Yorkers who crave onion-rosemary marmalade with their crostini, loathe the narrow aisles of the nearest supermarket or simply have no time to shop, Fresh Direct has been like a high-tech fantasy come true. With the touch of a computer mouse, it conjures up fresh, sophisticated groceries at the customer's doorstep.
The company has grown in five years from a dot-com dream to a $200 million business, and its Web site features "celebrity shopping lists" from quintessentially New York figures like Spike Lee, Edward I. Koch and Cynthia Nixon, a star of "*** and the City."
But now an eruption of low-tech troubles is drawing a spotlight to what lies behind the computer screen. Last week, the company abruptly lost more than 100 of the roughly 900 employees at its huge plant in Long Island City, Queens, including many of its most experienced workers, when they learned that federal officials planned to check their immigration status.
It is battling not one, but two unions that want to represent the workers, with the election to be held this weekend. City labor leaders and several elected officials rallied at City Hall on Friday to accuse the company and immigration authorities of trying to block the union drive.
And when Fresh Direct held a job fair this week, though hundreds of applicants lined up in the cold, many lost interest as soon as they learned about the low starting pay and low-temperature workplace: $7.85 an hour to pick and pack groceries at night, in 38-degree chill, often for more than eight hours at a stretch. "They said, ˜Dress as warm as you can,'" reported one disenchanted applicant, Joy Brewster, 22, as she emerged from a group job interview with a toss of her head. "I don't think so. I'd be stiff as a board."
Another applicant, Eibar Amaya, 47, an immigrant from Colombia who is now a United States citizen, gave his verdict in succinct, if imperfect English: "Pay too little, no good."
He now makes $12 an hour cleaning office bathrooms at night, he added in Spanish, and considering his legal status and valid driver's license, he expected something better.
Such comments underscore what may not be evident to the online shopper: that Fresh Direct's great successes "” Internet efficiency, competitive prices, an array of locally grown produce and a loyal, well-heeled customer base "” were built on a low-wage, transient work force that was anchored by illegal immigrants. And for all that, by its own account, the privately held company has yet to turn a profit for its investors.
"It's definitely a very competitive business," said Michael Garry, technology and logistics editor for Supermarket News, which covers the industry. "They're just one of many employers that are taking advantage of these people. But that certainly is going to clash with their P.R. image."
Jim Moore, the company's senior vice president for business affairs, defended its record as an employer as well as its financial health. Fresh Direct has participated in a government Social Security verification system since 2004, he said, and had no idea that some employees' documents were false.
Those who have left for fear of deportation now number about 100, he maintained, not 300, as organizers with Local 348S of the United Food and Commercial Workers insist.
He estimated the plant's normal turnover at 45 to 50 percent each year, which he called "not particularly high." And he said the job fair had produced more applicants than the company could possibly hire.
But among two dozen applicants who spoke with a reporter, only those with very limited options seemed undaunted by the job description "” plying frigid miles of conveyor belts carrying tubs of products from far-flung departments to a central packing area.
One applicant hoping to be called back was Abdul Hakim, 33, who said he recently served four years in prison. Another, Nathaniel Griffins, 60, said he was living in a nearby veterans' shelter and spent his mornings handing out free newspapers for $8.50 an hour. Like many other American-born and legal residents applying for work, they expressed sympathy for the illegal immigrants.
"Legal or not," Mr. Griffins said, "people got to find a way to feed their families."
Mr. Moore, the company vice president, acknowledged that many of the immigrant employees who fled, including butchers, kitchen workers and packers, had been with the company for three or four years and were among its most longstanding employees. Some had opposed unionization.
"They are very loyal folks who have been instrumental in helping us build the company," he said. "It's been incredibly hard for them and very, very sad for us."
To union organizers, however, his expression of regret rang false.
Both the food workers' local and Teamsters Local 805, the unions vying to represent plant workers, called the timing of the immigration audit highly suspect, and contended that under the immigration agency's own guidelines, it should have been delayed until after the vote on a union.
Both accused the company of using the audit as its latest tactic in an aggressive campaign against the union drive, suggesting that management had called in the immigration authorities, in an effort to intimidate or drive away union supporters.
Mr. Moore denied that accusation, and turned it around by saying that some unions unable to win over workers had been known to try to improve their odds by summoning immigration officials.
But there was no lack of other theories for why Fresh Direct might have appeared on the radar of immigration officials: a call by a disgruntled native-born employee; retaliation by an angry competitor; or Fresh Direct's high profile in the nation's media capital, which might make it an appetizing target for the Bush administration, intent on publicizing more aggressive enforcement of immigration laws.
The accusations and confusion partly reflect the relative rarity of immigration enforcement in New York's food industry.
Illegal immigrant employees abound in New York City's 11,662 registered food stores "” not to mention on the farms increasingly tapped as local suppliers of the tenderest arugula and tangiest goat cheese.
"On any given day, if immigration chose to, they could sweep into stores in any one of these five boroughs and literally take thousands and thousands of workers out," said Pat Purcell, the director of special projects for the Local 1500 of the United Food and Commercial Workers Union, which has 23,000 members in the New York area, including the employees at Fairway markets, which emphasize freshness and selection to please the most finicky shoppers.
Full-time employees at Fairway, a family-run company with a long union history, earn at least $14.75 an hour, with generous benefits and time-and-a-half for overtime, Mr. Purcell said.
But in contrast, dozens of upscale or specialty food stores are more obvious offenders than Fresh Direct, he added, because they pay their lowest-rung employees, often Mexicans, in cash, below minimum wage, without asking for any documents.
Older supermarkets in the city, too, have had their share of scandals. Several years ago, Gristedes and Food Emporium agreed to $3 million settlements after the state attorney general accused them and their delivery companies of paying some deliverymen, many of them Africans, just over a dollar an hour.
As for Fresh Direct's future, forecasts are contradictory. Nationally, only 1 percent of groceries are bought online, and such transactions are expected to nearly double by 2011, to $10.5 billion. But Fresh Direct keeps losing money, said Lawrence Sarf, the president of F & D Reports, a retail consulting company in Great Neck, N.Y.
"It has beautiful products, state-of-the-art equipment, and the best executives to raise money," Mr. Sarf said. "But it doesn't work."
In its campaign against the Teamsters this summer, the company stated in a flier, "We have yet to have a profitable year."
Mr. Moore now puts it differently. "We've taken the profits," he said, "and we've plowed them into growing the company. Our investors are very bullish on what we're doing."
Most customers seem bullish, too, despite expressions of remorse about the fate of illegal immigrant employees.
"We're all so liberal, but we're really taking advantage of all these people," said Betsy Jacobs, who described herself as a busy mother in her 40s who depends on Fresh Direct. "As a New Yorker, I really want to be helping these people, not hurting them."
Former Mayor Edward I. Koch, the company's first commercial spokesman, took a tougher tone. "The law should be enforced," he said. "If there are no jobs, the illegal aliens will go home."
"I am not for keeping prices down by underpaying the people who do the work," he added. "Unions should be the norm."
Actually, Mr. Koch confessed, he shops at Fairway and Citarella for his everyday needs, and uses Fresh Direct for large holiday orders. "Their produce is superb," he said. "But I think they have to pay going rates for labor."
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