Amazon Closes French Warehouses After Court Ruling Limits Operations To Essential Deliveries

Amazon.com, Inc.’s AMZN will close its French warehouses at least until next week after a court ruled the company should limit its deliveries to essentials.

What Happened

Six Amazon warehouses employing 10,000 permanent and temporary workers, will be closed at least until April 20. During the closure, Amazon will use a state partial unemployment scheme to pay its workers, reported Reuters.

"The company is forced to suspend all production activities in all of its distribution centers in order to assess the inherent risks in the COVID-19 epidemic and take the necessary measures to ensure the safety of its employees (during that period),” the company said in an internal document.

On Tuesday, a court ruled that Amazon was obliged to conduct a thorough assessment of the risk COVID-19 posed to its warehouse working conditions and restrict deliveries to essentials or face a fine.

“We’re puzzled by the court ruling given the hard evidence brought forward regarding security measures put in place to protect our employees,” said Amazon reacting to the ruling in a statement. The e-commerce giant then said it would appeal and stated their interpretation was that Amazon would be “forced to suspend the activity of our distribution centers in France.”

Why It Matters

The ruling against Amazon comes after a complaint was made by a French group of trade unions. 

Amazon’s French operations had come under scrutiny during labor inspections at five warehouses, three of which have been updated to meet health standards.

The ruling would have punished Amazon to the tune of 1 million euros a day for not complying.

Although the company had restricted the products it shipped in France, it was still shipping goods such as craft kits, video games, and sex toys, reported CNBC.

Amazon has been under fire for working conditions during the COVID-19 pandemic. The infection has been reported among staff at 19 of Amazon’s warehouses in the United States, according to Reuters.

At the end of March, Amazon fired a worker who organized a walkout at one of its New York warehouses, leading to Jeff Bezos, the CEO, being questioned by five U.S. senators.

What Else

COVID-19 pandemic has led to increased demand for Amazon’s services pushing the company’s stock to record highs on Tuesday and adding $6.3 billion to Bezos’ wealth, even further enriching the wealthiest man in the world.

Price Action

Amazon shares traded 0.54% lower at $2,295.15 in the after-hours session on Wednesday. The shares had closed the regular session 1.07% higher at $2,307.68.