On October 27, four Amazon delivery drivers filed a complaint a state court In Los Angeles. The plaintiffs contend that they should be regarded as employees of the online giant, rather than as self-employed contractor. The outcome of this case could have huge repercussions for the company, which tests new services to deliver parcels even faster.
The four drivers work for Amazon Prime Now service, which offers delivery within one or two hours for such things as groceries and electronics. To accomplish this, the company relies on couriers making multiple round trips between warehouses and the homes of its customers. These couriers do not have the status of employees. They are independent contractors who are ineligible for overtime pay, mileage reimbursement, workers' compensation and other protections given to employees under state and federal law. The choice of this classification is increasingly used to reduce costs.
Although drivers are paid $11 an hour, the suit contends that many are actually receiving less than California's $9 minimum wage after factoring in expenses such as gas, tolls and maintenance. The service is offered in Austin TX, Los Angeles, Chicago, New York City, and San Francisco.
According to the plaintiffs, both Amazon and its subcontractors in California are in violation of the law. The complaint contends that they cannot refuse work assignments, or seek to limit deliveries to a particular geographical area. Furthermore, they claim that failure to comply can result in disciplinary action that can result in the termination of their contract. Other complaints are that Amazon requires that the plaintiffs keep to a fixed schedule, and should make deliveries in uniform. The drivers complain that they can be subjected to discipline by arriving just one minute late.
Lawyers representing the drivers hope to obtain the status of a class action lawsuit. If successful, they can then add other plaintiffs to their proceedings, which would win a larger sum if they win at trial. Beth Ross, the lead attorney in the Amazon lawsuit, won a $227.5-million settlement this year with FedEx Ground in a similar case involving drivers who were classified as independent contractors.
For Seattle-based Amazon, a defeat in Los Angeles may lead to further proceedings in other courts. If service costs rise, so too could the costs to customers. Above all, a defeat in court could jeopardize Amazon’s Flex program, currently being tested in Seattle. It aims to use private drivers from Uber, for example, as deliverymen.