The National Labor Relations Board (NLRB) has filed a complaint against the U.S. Postal Service (USPS) related to the housing of contract postal units in Staples Inc. (NASDAQ: SPLS) stores. The NLRB has determined that the USPS violated the law when it opened its first postal counter in a Staples store in late 2013.

The contract between the USPS and the American Postal Workers Union (APWU) states that USPS management must bargain with the union before entering a deal like the one with Staples. That did not happen in this instance according to the union, which issued a press release on Monday and which wants the postal counters staffed by Staples employees closed.

Union president Mark Dimondstein said:

This is a major step in the fight against privatization of our public postal service. The legal case against the Postal Service is very strong, which is why the NLRB is moving forward with this very significant unfair labor practice complaint. … The Postal Service should settle this case and dump its failed privatization scheme.

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The APWU protested the Staples-USPS deal in April in 2014 and called for a boycott of Staples stores and the company’s Quill.com website. The union represents 200,000 USPS workers, about half the total number of post office employees, and their average wage was $25 an hour. A sales associate at Staples earns about $8.50 an hour.

The USPS figured it could cut its costs by using what it called “retail partner labor” instead of USPS employees, and that is true. The USPS could save about two-thirds of its labor costs by using Staples employees.

According to the union, Staples and the USPS cancelled the pilot program under which the postal counters were operated and replaced it with an Approved Shipper program that permits Staples to sell shipping products from USPS competitors like UPS as well as Postal Service products. Staples and the USPS responded by expanding the new shipping program to all Staples stores (more than 1,000), compared with the pilot program’s introduction at fewer than 150 stores.

The NLRB has set a hearing on the complaint for August 17. In addition to charges that the USPS violated its contract by agreeing to the deal with Staples without first talking to the union, the USPS is charged with bad faith bargaining and violation of the subcontracting provisions of the contract between the USPS and the union.

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