(Bloomberg) — Amazon.com Inc. was legally the boss of a group of subcontracted delivery drivers, US labor board prosecutors have concluded, rejecting the company’s claims that workers in its sprawling delivery network aren’t its employees.
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The general counsel office of the US National Labor Relations Board has determined that a group of drivers in Southern California were employees of Amazon itself, as well as of the “delivery service partner” company that hired them, agency spokesperson Kayla Blado said Thursday.
The agency prosecutors also concluded that Amazon violated federal labor law by making illegal threats and refusing to negotiate after the workers organized last year with the Teamsters. Absent a settlement, the agency’s regional director plans to issue a formal complaint against Amazon, deeming it a “joint employer,” meaning a company with enough control over workers’ conditions to be legally responsible if they’re mistreated — and obligated to negotiate if they unionize.
Amazon denied wrongdoing. “As we have said all along, there is no merit to the Teamsters’ claims,” company spokesperson Eileen Hards said in a statement, noting that the agency dismissed other allegations from the union. “If and when the agency decides it wants to litigate the remaining allegations, we expect they will be dismissed as well.”
The company has denied being the boss of its subcontracted drivers, saying that those workers are only employees of delivery service partners, or DSPs — small independent businesses that the retail giant contracts with for its delivery needs.
Delivery drivers are responsible for a crucial aspect of Amazon’s business, and by not directly employing them, the company has shielded itself from costs and liabilities that come with their work.
While the NLRB determination applies to a small group of drivers at a DSP that Amazon has already cut off work with, it creates a landmark precedent that could affect the company’s operations nationwide. More subcontracted drivers may now try to unionize and force Amazon to negotiate with them, and have a better chance of also being deemed by the government to be jointly employed by the company.
Bloomberg News reported in 2021 that Amazon imposes extensive rules regarding such drivers, including policies requiring “clean teeth, face/ears, fingernails and hair,” as well as drug testing whenever requested by the company. There’s also a prohibition on “obscene” social media posts.
DSPs are mandated to adhere to Amazon’s policies, which the company can unilaterally change at its discretion, and are required to provide the retailer with physical access to their premises and information such as geolocation data, speed and movement of the drivers, according to a contract viewed by Bloomberg at the time.
Complaints issued by NLRB prosecutors are considered by agency judges, whose rulings can be appealed to labor board members in Washington. From there, they can go to federal appeals court. The agency lacks authority to impose punitive damages or hold executives personally liable for wrongdoing, but can order companies to change policies, compensate and reinstate terminated workers, and negotiate with unions.
A group of drivers in Illinois, hired through a different DSP, have also been organizing with the Teamsters this year. The Amazon Labor Union, which won a landmark unionization vote at a New York City warehouse in 2022 — but has so far been unable to bring Amazon to the bargaining table — also affiliated with the Teamsters this summer.
While siding with the union on other issues, the NLRB regional director dismissed the Teamsters’ claims that the company’s decision to cut off business with the Southern California DSP constituted illegal retaliation.
In an emailed statement, Teamsters President Sean O’Brien said the workers’ activism in Palmdale, California, “has paved the way for every other Amazon worker in the country to demand what they deserve and to get Amazon to the bargaining table.”
–With assistance from Spencer Soper.
(Updates with comment from Amazon in the fourth paragraph.)
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