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Amazon and Action Messenger’s Partnership Misclassified Delivery Drivers Alleged In New Class Action Lawsuit

By on October 26, 2016

A familiar sight around Los Angeles now is a white, windowless van with a magnetic Amazon.com sign slapped across one side and a delivery driver dropping off Amazon.com packages around the neighborhood.  The delivery drivers, who most people assume are employed by Amazon.com, are actually employed Action Messenger Service.

One driver, Carlos Morales, filed an employment class action against both Amazon.com and Action Messenger Service in Alameda Superior Court.  Morales alleges that he was misclassified as an independent contractor, when he was actually under the control of Amazon and Action Messenger, and therefore was an employee and entitled to meal and rest breaks.  

Misclassification of an employee is a common tactic used by many businesses to offset the cost of employees.  The employer wins and the employee often is left without rightful pay and benefits under California and Federal labor laws.

The Division of Labor Standards Enforcement (DLSE) “applies the “multi-factor” or the “economic realities” test adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341, in determining where an employee is misclassified.

When applying the economic realities test, the most significant factor considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Additional factors that may be considered depending on the issue involved are:

  1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
  2. Whether or not the work is a part of the regular business of the principal or alleged employer;
  3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
  4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
  5. Whether the service rendered requires a special skill;
  6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
  7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
  8. The length of time for which the services are to be performed;
  9. The degree of permanence of the working relationship;
  10. The method of payment, whether by time or by the job; and
  11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288).

 

Other points to remember in determining whether a worker is an employee or independent contractor are that the existence of a written agreement purporting to establish an independent contractor relationship is not determinative (Borello, Id.at 349), and the fact that a worker is issued a 1099 form rather than a W-2 form is also not determinative with respect to independent contractor status. (Toyota Motor Sales v. Superior Court (1990) 220 Cal.App.3d 864, 877).”

The class action complaint alleges that Amazon maintained significant control over the Action Messenger Service employees, including Plaintiff Morales, by setting work hours and pay structures, paid each employee a flat day rate that did not take into account the actual hours each employee worked that day, and required remaining packages were delivered back to Amazon at the end of each day.

Amazon even provided the Action Messenger Service employees with “Amazon provided Plaintiff with a delivery truck with an Amazon logo, a handheld device used to scan packages . . . a polo shirt with the Amazon logo, a baseball cap with Amazon logo, route guidance, access to Amazon’s resources,” according to the complaint.

If the allegations in the complaint prove true, Amazon might be in for a large settlement along with “joint employer” Action Messenger Service.   Morales also alleges that Amazon and Action Messenger failed to pay employees for all hours worked and failed to pay final wages on time.  The case name is Carlos Morales v. Amazon.com LLC; Peach Inc. dba Action Messenger Service filed in Alameda County Superior Court (RG16-832863).

 

SHOULD THE NCAA AND PAC-12 CONFERENCE PAY COLLEGE ATHLETES?

 

Lamar Dawson thinks so.  The former University of California linebacker filed a class action complaint this week alleging that the NCAA and PAC-12 should compensate college athletes because the athlete meet the definition of “employees” under federal and California labor laws.

 

The NCAA currently faces another class action that the Supreme Court may here next session. NCAA v. O’Bannon, an antitrust suit originally filed by former UCLA basketball start Ed O’Bannon fighting for players rights to make money off their name, image and likeness. Dawson’s class action lawsuit is different in that the plaintiff is alleging that the NCAA and the PAC-12 are the student athlete’s employer.  

 

For the NCAA and PAC-12, the lawsuit might be a way to keep student athletes happy by paying them, but how much? What would the hourly rate be?  The complaint cites that the NCAA disclosed its revenues are $6.1 billion annually and that student athletes have no choice other than to comply with the rules of the NCAA.

 

“Not a single dollar of that enormous revenue would exist if it were not for the efforts of the athletes themselves. In so doing, Defendants have controlled and regulated the employment of student athletes who have not met, and currently do not meet, any test for exemption from the payment of minimum wage, overtime wages and other wage entitlements,” according to the complaint.

 

The lawsuit seeks unpaid wages, overtime pay and damages contending that college players were required to work more than 8 hours a day and 40 hours a week without adequate compensation.

 

According to the Los Angeles Times, the NCAA spokesman disputed the claims premise stating that student-athletes are not employees and it has been made clear throughout the legal process.

 

The spokesman does have ground to stand on, at least for the federal claims.  Just in March 2016, the U.S. District Court for the Southern District of Indiana ruled that student athletes are not employees citing that the Department of Labor expressly took the position that ‘as part of their overall educational program, public or private schools and institutions of higher learning may permit or require students to engage in activities in connection with dramatics, student publications, glee clubs, bands, choirs, debating teams, radio stations, intramural and interscholastic athletics and other similar endeavors. Activities of students in such programs, conducted primarily for the benefit of the participants as part of the educational opportunities provided to the students by the school or institution, are not ‘work’ under the FLSA and do not result in an employee-employer relationship between the student and the school or institution.’

 

But, California state labor laws protect employees more than other states.  We will wait to see how this plays out in court.

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