Amazon’s Push for Delivery Guys Leaves Them Facing Employment Law Claims

This past summer, Amazon’s Jeff Bezos announced a need for aspiring entrepreneurs and offered them a chance to make $300,000 per year by starting their own Amazing delivery business with as little as $10,000 required to get started. Amazon is highly dependent on the creation of a network of independent drivers around the country as they struggle to keep up with demand. To entice entrepreneurs, Amazon uses their buying buyer to get their partners good deals on necessary items, like: vans, insurance, etc. Then they provide them with a steady stream of items to be delivered.  

The entrepreneurs tackling Amazon’s delivery needs are actually facing the bigger challenge as they attempt to recruit and hire drivers who can meet the high standards of Amazon at a low pay rate.

The structure leaves Amazon in a bit of a gray area legally. They have to be careful how much control they are exerting over the people employed by their delivery companies. Amazon already faces a number of lawsuits from delivery drivers that claim they were not paid wages as required by federal law while employed by Amazon partners and they’re including Amazon in the list of responsible parties since their job duties were on behalf of the giant online retailer. If Amazon finds a legal way to add drivers and vans without spending their own company funds, the risk could be worth it for them in the long run.  

Amazon has already gathered tens of thousands of entrepreneurs excited for this type of ground floor opportunity. The aspiring entrepreneurs go through phone interviews and several days of training. Within a few months, hundreds of new businesses have popped up all over America and they’re employing thousands of delivery drivers. More hopefuls fill a waiting list for further expansion in the coming year.

The business model appears profitable for Amazon as they avoid both the costs of training and maintaining drivers throughout the nation. The business model also appears profitable for entrepreneurs looking for a chance to run their own business with the power of Amazon supporting their efforts – many entrepreneurs are already enjoying the fruits of their efforts as Amazon partners. Yet Amazon’s new delivery model is drawing lawsuits that allege Amazon partners are violating overtime pay requirements by paying their drivers daily rates instead of hourly wages. A case in Illinois referred to the Amazon Partner Delivery Model as an “unlawful scheme” trying to avoid responsibility for providing legal wages to delivery drivers. FedEx paid out a $13 million lawsuit settlement to resolve claims of “misclassification” of workers leading to lost wages. They altered their business model in response, now requiring service providers to keep drivers on payroll. Amazon ended up settling in a similar lawsuit filed in California alleging that contract delivery drivers (listed as independent contractors) were underpaid.

Finding people willing to do quality work at low wages is a significant challenge. Most drivers are paid around $15/hour. This particular challenge has been passed from Amazon to the Amazon partners responsible for managing routes and drivers. Many expect this to be a slight redirection of the problem rather than a solution.

If you are dealing with misclassification in the workplace or you need to find out how to obtain overtime pay you are owed, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

California’s Motion to Dismiss in Dynamex-Related Case

A California Supreme Court ruling that could upend years of law regarding the frequently litigated independent contractor vs. employee issue is fighting push back from trucking groups. A large part of the transportation industry workforce is made up of independent contractors. These independent contractors generating a significant portion of the transportation industry’s life force include thousands of California truck drivers/owner-operators.

The ruling under scrutiny was in the Dynamex class action lawsuit and came down on April 30th. The ruling adopted the ABC test.

Defining the ABC Test: The ABC Test assumes most workers are employees and are eligible for the protections offered by California wage laws (including overtime pay regulations, meal break requirements, and minimum wage guarantees). Part B of the ABC Test is vital. It states that a worker has to perform work outside the usual course of business of the hiring company in order to qualify as an independent contractor. This part of the ABC Test would rule out owner-operator truck drivers. They are most often doing the same type of work as their “client” companies.

The court’s decision in the Dynamex case throws the legality of the entire California trucking industry into question. In fact, the Western States Trucking Association filed a lawsuit earlier in 2018 against the state of California over the potential enforcement of the ruling. They argued that the Dynamex ruling is in violation of federal laws on interstate transportation preempting states from passing laws that affect prices, routes and services of interstate motor carriers.

Western States Trucking Association is not the only group pushing back against the ruling on the Dynamex case. The California Trucking Association filed its own lawsuit in October 2018 to try to prevent the state from applying and enforcing the ABC test categorically.

If you have questions about how to address wage disputes, wrongful termination claims, overtime violations or questions of misclassification, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Ruling Could Turn California Gig Economy Giants’ Contractors Into Employees

Uber and Lyft and other similarly situated gig-economy companies are lobbying for Californian democrats to override a recent court ruling that could require them to reclassify their independent contractors into employees. The April ruling was handed down by the California Supreme Court. The far-reaching ruling could make it significantly harder for companies across the industry to claim their workforces are not eligible employees under state wage laws.

Hoping to blunt the ruling’s impact, businesses are urging California political leaders to take action in their favor through legislation or executive action by the governor. Either move would make noise across the national debate regarding rights and roles of workers in today’s gig economy. The businesses affected by the ruling insist that it is stifling innovation and threatening the livelihoods of California workers. They seek a balance between the need for flexible, scalable work arrangements and the rights of California workers and that the definition and implication of said definition should not be simply left to the courts or determined based on old models.

In addition to many popular gig-economy businesses, the California Chamber of Commerce has been quite outspoken in opposing the new requirements indicating that the business model of today’s gig-economy companies does not lend itself to the strict structure of a traditional employer-employee relationship. The chamber argues that forcing this on the companies leaves them in an impossible position and prevents them from continuing forward with their business model. The chamber is attempting to get a legislative fix before the session closes at month’s end. Without this type of fix, they feel entire sectors of California’s economy would be left in jeopardy. As is – without a legislative fix of some sort – the on-demand economy may no longer be a viable business model, which could be devastating as people depend on it.

The California Labor Federation reiterates their support of the ruling and insists they will resist efforts to suspend or reverse. Their stance is based on record highs of income inequality and the millions of working families struggling to make ends meet in what has become an unfair economy. They feel protecting California’s workers should be the top priority of California’s leaders rather than protecting big corporations.

If you have questions about minimum wage, overtime pay, or other employee rights provided by federal and California laws, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

NY Times Facing Discrimination & Misclassification Claims

Robert Stolarik, a photographer with an extensive working relationship with the New York Times, filed a lawsuit against the newspaper. He alleges that the New York Times misclassified him on the job, discriminated against him due to age, denied him assignments due to a past arrest, and retaliated against him when he made these claims public. During the course of his career as a photographer, Stolarik has had his photos featured on the front page of the New York Times over 30 times.

Stolarik filed the lawsuit on July 6th in the U.S. District Court for the Southern District of New York. He included a number of different accusations:

Classification as a freelancer instead of a full-time employee, which left him responsible for paying additional taxes and ineligible for the company’s benefits and retirement plan. Stolarik claims the editors referred to him as a “full time freelancer” for 14 years.

No overtime pay despite working close to 3,400 hours in overtime from 2005 through 2009.

When seeking to become a staff photographer/employee, Stolarik was told a number of times by different editors at the paper that his age (37 in 2006) prevented his hiring as a staff shooter. During that same time period, younger photographers (20-somethings) were hired on as staff photographers.

In August 2012, Stolarik was assaulted and arrested while covering a story in the Bronx. The Times made sure Stolarik had legal representation and submitted an angry letter to the NYPD about the incident. The officer was later charged and found guilty of a felony for lying about the arrest. Yet Stolarik was taken off the police beat (that he had covered for more than 10 years) in response to the arrest.

Stolarik claims that the unlawful and discriminatory practices of the New York Times resulted in a loss of income and benefits because he was denied both a staff position and freelance assignments. In addition, Stolarik claims the paper retaliated against him when he submitted a letter including these legal complaints to the paper in spring of 2016. Since that time, he has not received a single assignment from the paper’s editors.

If you have experienced workplace retaliation or you don’t know what to do about discrimination in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.