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Wayfair donates $100,000 to the Red Cross after employee backlash

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Posted at 3:03 PM, Jun 26, 2019
and last updated 2019-06-26 18:03:02-04

(CNN) — Wayfair will donate $100,000 to the American Red Cross after an employee backlash over the sale of bedroom furniture for use in a migrant detention facility.

In a letter to employees, Wayfair cofounders Steve Conine and Niraj Shah said the company will donate the money to support the American Red Cross "in their effort to help those in dire need of basic necessities at the border."

CNN obtained the letter. The company didn't say whether the funds for the donation come from the proceeds or profits as a result of the use of its furniture in a detention facility.

Wayfair declined CNN's request for comment.

Employees for the online retailer had announced Tuesday that they would stage a walkout from company headquarters in Boston in protest of the company selling furniture to the facility. The walkout started Wednesday afternoon.

News of the sale and employee walkout quickly erupted on social media and "#WayfairWalkout" went viral. Wayfair's stock dropped 5% on Tuesday, although it ticked up slightly Wednesday. Shares are up about 60% this year.

Wayfair employees learned last week that an order for about $200,000 worth of bedroom furniture was placed by the global nonprofit BCFS, which operates migrant facilities for the Department of Health and Human Services, according to a woman identifying herself as an employee of the company who spoke with CNN Tuesday. BCFS is set to open a new facility in Carrizo Springs, Texas, which will accommodate about 1,600 unaccompanied minors.

More than 500 employees sent a letter Friday to senior management asking the company to no longer do business with BCFS, according to the employee. They also asked Wayfair to establish a code of ethics that "empowers Wayfair and its employees to act in accordance with our core values." CNN has seen a copy of the email sent by employees to Wayfair senior management.

"The United States government and its contractors are responsible for the detention and mistreatment of hundreds of thousands of migrants seeking asylum in our country — we want that to end," the employees said in the letter. "We also want to be sure that Wayfair has no part in enabling, supporting, or profiting from this practice."

Wayfair management responded in a letter to employees, also obtained by CNN, saying it still plans to do business with BCFS.

"As a retailer, it is standard practice to fulfill orders for all customers and we believe it is our business to sell to any customer who is acting within the laws of the countries within which we operate," the Wayfair's leadership team said in the letter. "This does not indicate support for the opinions or actions of the groups or individuals who purchase from us."

Wayfair employees announced on Twitter their plan to stage a walkout Wednesday afternoon in response to the company letter. The Wayfair employee who spoke to CNN said the walkout is "not meant as a censure on Wayfair," but as a way to show workers' continued concern.

Wayfair, which was founded in 2002 and went public in 2014, is not the first US business to become ensnared in controversy over the Trump administration's immigration policy.