The complaint, which was filed in the Los Angeles County Superior Court against Amazon.com
Inc. and courier service Scoobeez Inc. marks the latest of many challenges to businesses that
classify drivers as independent contractors instead of employees. The distinction is significant
because California wage and hour laws provide certain rights to employees that are not afforded
to contractors, such as minimum wages, overtime pay and business expense reimbursement.
The drivers, who use their own vehicles for deliveries, are paid a non-negotiable $11 per hour plus
tips and are not reimbursed for fuel, insurance, tolls or other vehicle expenses, the complaint said.
The claimants alleged that some drivers may earn less than the state’s $9 per hour minimum
wage after expenses are deducted.
“By the time drivers pay for required expenses like gas, maintenance and car insurance they are
barely getting by,” the drivers’ attorney, Beth A. Ross of Leonard Carder LLP in San Francisco and
Oakland, Calif., said in an Oct. 27 statement. “This is a clear abuse of the independent contractor
designation.” An Amazon spokesperson told Bloomberg BNA Oct. 28 that the company has a long-standing
practice of not commenting on pending litigation.
Drivers Claim They Were Employees.
According to the complaint, Amazon’s “Prime Now” targets the “instant gratification market” by
offering customers the option to purchase certain items through a mobile application and to
receive those items within one or two hours. Amazon has a contract with Scoobeez, as well as
other companies, to provide Prime Now delivery drivers in California.
The drivers claimed that they were unlawfully classified as independent contractors and are due minimum wage and overtime payments, expense reimbursement, and other benefits provided to
employees under California law. They also contended that Amazon and Scoobeez are liable for
penalties stemming from their failure to provide required rest and meal breaks.
“Amazon’s mission to deliver ‘Now’ at no additional cost to its customers is being funded by the
delivery drivers,” Ross said.
Companies Allegedly Controlled Work Details.
Although a number of factors are evaluated to determine whether a worker is an employee, the
extent of control exercised by an employer over the details of a worker’s job is a significant factor.
The drivers alleged that they were hired by Scoobeez to exclusively work as delivery drivers for
Amazon and that they were required to sign “lengthy written contracts.”
Drivers work fixed schedules on prescribed routes and are required to arrive at an Amazon
warehouse 15 minutes before the start of their shifts—even though they are not compensated for
the pre-shift time, according to the complaint. The claimants said drivers wear Amazon Prime Now
uniforms and use identification cards bearing both Scoobeez’s and Amazon’s logos.
Additionally, according to the complaint, Amazon tells customers that drivers receive 100 percent
of any tips provided through the Prime Now app, but the drivers don’t know if this is true.
“I never see an accounting of what tips I receive, because everything is paid through an app,” lead
plaintiff Taree Truong said in a statement. “I have no way of knowing whether or not I have been
paid what I am due.”
Independent Contractor Classifications Scrutinized.
App-driven “sharing-economy” businesses, such as ride-hailing services Uber Technologies Inc.
and Lyft Inc., have faced similar scrutiny with regard to their independent-contractor driven
business models. In March, the U.S. District Court for the Northern District of California ruled in
two separate lawsuits that a jury must decide whether California drivers for Uber and Lyft are
independent contractors or employees .
“When a corporation labels low-wage workers ‘entrepreneurs,’ that’s not ‘sharing,’” Ross said. “It’s stealing.”
Ross was the lead attorney in a class action brought by FedEx Ground Package System Inc.
delivery drivers in California who also claimed they were misclassified as independent contractors.
In June, FedEx announced that it agreed to settle those claims for over $227 million, which is one
of the largest wage and hour settlements in recent history.
In an effort to curb employee misclassification, the Labor Department issued guidance July 15
providing employers with additional direction for classifying workers under the federal Fair Labor
Standards Act.
Reproduced with permission. Published 10/28/15. Copyright 2020 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bloombergindustry.com>