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B&H Update: NLRB Dismisses Labor Allegations / Warehouse Move On Track

New York, NY - August 2, 2017 - B&H today announced that on July 24th, the National Labor Relations Board (NLRB) dismissed allegations that B&H was moving its Brooklyn warehouses to New Jersey to avoid the union that represents its warehouse employees.

The NLRB decision affirms B&H’s position that the plans for the move began years before employees voted to join a union; that the lease for B&H’s Navy Yard facility expires in early 2018 without a renewal option; that the Navy Yard previously assigned rights to the B&H space to Steiner Studios upon lease expiration; and that the move to New Jersey is part of a long-held plan to modernize its fulfillment center in a large, single facility to better serve customers and compete more effectively in the global economy.

“We appreciate the fact that a neutral arbiter looked at the facts and made clear that we are making this move for exactly the reasons we stated,” Jacob Mittelman, VP of Operations, said. “The facts are clear for all to see, and we hope this resolves the misleading concerns some groups have raised.”

B&H has been the target of a misleading campaign by several so-called labor advocacy groups alleging that the warehouse moves are part of a scheme to avoid bargaining with the union. B&H is gratified that the NLRB has rejected these claims that B&H believes are untrue and solely aimed at damaging our reputation.

B&H has been negotiating in good faith with the United Steelworkers union (USW) regarding a contract for our Manhattan warehouse employees (not affected by the relocation) and our Brooklyn employees regarding the effects of the move. The USW is the sole legal representative of our warehouse employees. We believe that these labor advocacy groups are undermining the union and its role and are not acting in the best interest of our employees. We urge them to allow the USW to do its job representing the employees without interference.

B&H announced in January 2017 that we are moving our Brooklyn warehouses to New Jersey. The first phase will be completed in August with the move of our Bushwick satellite facility. The second phase will be completed later in the year with the relocation of the Brooklyn Navy Yard main warehouse facility.

Background of the Move

B&H’s main warehouse has been located in the Brooklyn Navy Yard for nearly 20 years. B&H’s warehouse is surrounded by Steiner Studios, a large film production facility. New York City, the Navy Yard owner, has financed and supported Steiner’s growth for many years to help promote the city’s film industry. (See New York City Resource Center 7/2/14.)

More than five years ago, New York City assigned rights to the B&H space to Steiner upon our lease expiration in early 2018. At that point, B&H began to search for new warehouse space. (See Crain’s 10/20/13.)

B&H retained Jones Lang LaSalle (JLL), a commercial real estate firm, to find a new warehouse. We also worked with New York State’s economic development arm to find space in or near New York City but were not successful. Our search began in New York and continued to northern New Jersey, then central New Jersey, before finding a suitable facility. With the pressure of the Navy Yard lease expiration and a lack of suitable space in or near the city, in January we leased a new facility in Florence, New Jersey, approximately 70 miles south of the Navy Yard.

B&H also operates a satellite warehouse in Bushwick, which opened in 2013 as an interim solution since B&H had outgrown the Navy Yard site. The Bushwick and Navy Yard warehouses will be integrated into the single New Jersey facility. We will relocate Bushwick in August, and the Navy Yard will follow. B&H’s Manhattan warehouse at our 34th Street store will not be affected by the Brooklyn moves.

The Brooklyn warehouse moves impact approximately 310 employees (both union and management). The decision to move was not made lightly – we understand the difficulty that these moves create. Unfortunately, the moves are unavoidable. Our Brooklyn employees, who average 7 ½ years with B&H, have been important contributors to B&H’s growth and success. All Brooklyn warehouse employees have been given the opportunity to relocate to the new warehouse.

B&H operates in an extremely challenging marketplace, competing against several significantly larger companies. The opportunity to relocate into a modern, efficient distribution center that will help us better serve our customers and operate more effectively is essential to the future of our company.

Employee Relations

B&H has been the subject of a two-plus year campaign by so-called labor advocacy organizations to discredit our reputation. These groups are not affiliated with the USW. Many accusations have been made against B&H, and few, if any, of them are accurate or truthful. We take seriously our obligations to protect the health, safety, and welfare of all B&H employees. That said, exercising their legal rights, our warehouse employees voted to join the United Steelworkers union in November 2015. Since then, we have worked with the USW in good faith to resolve all open employment issues and consider our relations with the union to be good.

Negotiations with the USW regarding our Manhattan warehouse continue, and we hope to finalize a contract this fall. We have worked and continue to work with the USW to address issues related to the move of the Brooklyn warehouses.

Brooklyn Warehouse Move Status

The following timeline sets forth actions taken in 2017:

January 2017 – B&H announced the relocation of the Brooklyn warehouses to New Jersey. Federal and State laws require a 90-day notice to employees before closing such facilities. B&H notified employees in January, seven months ahead of the Bushwick move and four months before the legal requirement. From the outset, employees were told they would have the option to accept a position at the new facility or receive severance. B&H and the USW engaged in effects bargaining regarding the warehouse closings and went back and forth over several months.

May 2017 – 90-day notice was provided to Bushwick employees, pursuant to Federal and State laws, notifying them of the projected August closing date.

June 2017 – By mid-June, the parties agreed it made sense for B&H to make a final offer. B&H’s final offer gave both union and non-union employees relocation and severance options. Bushwick employees who opted for severance were offered an option to continue working at the Navy Yard while it remains open. At the union’s request, B&H met with the USW again in late June and extended the decision deadline for Bushwick employees to July 10th. Employees had six months from the January announcement to evaluate the options and choose relocation or severance.

July 2017 – Following the January announcement of the relocation plan, ULP (unfair labor practice) claims were filed with the NLRB regarding the move and related matters. On July 24th, the NLRB notified B&H that it had dismissed the primary claim after a thorough investigation. The primary claim alleged that the move was driven by an effort to avoid bargaining with the union. This dismissal validates what B&H has been asserting all along: that the move was driven by the expiration of the Navy Yard lease and the need to find suitable warehouse space to operate the business. Several ancillary claims have also been withdrawn by the USW.

At this point, Bushwick employees have decided to either relocate or be eligible for severance. Employees who chose to relocate have begun working in Florence.

The projected closing timeframe for Bushwick is late August. We plan to fully vacate Bushwick by the end of September. We plan to move the Navy Yard later this year and will provide updates and notices to Navy Yard employees in due course.

Store Protests

The labor advocacy groups that have been targeting B&H for over two years continue to hold protests outside of our Manhattan store. We are not clear what these groups want from B&H, and we defer to the USW as the sole legal representative of the warehouse employees. The USW has not participated in these protests in recent months. These third-party groups are not the bargaining representatives of the employees. These groups advocate for a variety of causes, most of which have nothing to do specifically with B&H. We believe the actions of these groups undermine the USW’s representation of our employees and are not in the best interest of our employees. We encourage them to stop.

These groups have alleged that the warehouse moves are an effort to avoid the union. The facts outlined above show that this is not an anti-labor action. The NLRB ruling rejected this allegation as well. Our Florence, New Jersey facility is 577,000 square feet – we could not find any such suitable facility in New York City despite a multi-year search.

The groups have also alleged that inadequate time was provided for employees to make decisions about severance vs. relocation. All employees have known about the warehouse moves since January. Employees have participated in many of our meetings with the USW. Deadlines were set in meetings with the union, and these deadlines were extended at the union’s request. We responded positively to every request for extensions, and now that the deadline has passed, we are being wrongly accused of not providing enough time by groups that have not been involved in any of the meetings between B&H and the USW.

We continue to work closely with the USW. The USW has not filed any charges related to bargaining over the effects of the Bushwick closing. B&H pledges to continue to work in good faith with the USW to reach a resolution on the Manhattan warehouse contract and to facilitate the Brooklyn transitions.

While we would obviously like the weekly store protests to stop, our only course of action is to continue working through issues with the USW in good faith.

The decision to move the warehouses has been difficult for all concerned. We appreciate the years of dedicated service and the many contributions of our Brooklyn teams. We have worked to provide alternatives to help impacted employees manage these changes. That said, we understand the challenges created by this decision and will continue to work with the USW to support our employees during this transition.

About B&H

B&H is one of the world’s largest independent retailers of photography, video, and audio equipment. The NYC store and award-winning website offer a wide range of electronics products, servicing professionals and consumers alike. B&H is known for its knowledgeable sales professionals, extensive stock, and excellent customer service. B&H has been satisfying customers worldwide for over 40 years. For more information visit www.bhphoto.com

For media inquiries please contact Henry Posner henryp@bhphoto.com

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