1,700 Bay Area delivery workers join mass arbitration claim against Amazon

Saman Khodaei said that delivering packages for Amazon as part of its DoorDash-like Flex program was stressful.

The company gave him a set number of packages to deliver in a block of time, he said — noon to 2 p.m, for example. But any number of things could and did delay his deliveries — traffic, of course, since he lived in Los Angeles, but also packages not being ready or even available to be picked up when signed on for his shift or the lack of parking at the Whole Foods stores where he sometimes picked up orders.

The delays were crucial, because Amazon didn’t start paying him until he picked up his packages and wouldn’t pay him extra if it took him longer than the company estimated to make his deliveries.

And every dollar counted, because Amazon treated him as an independent contractor, so he was responsible for paying for his own gas and the wear and tear on his car.

Khodaei said he learned later, after researching the issue, that in addition to causing him stress, Amazon was arguably violating California law.

So he fought back.

About four years ago, along with some 452 other Flex drivers, he filed an arbitration claim against the company. In his claim, he alleged that by misclassifying him as a contractor, Amazon had illegally avoided paying him for the hours he actually worked, including overtime, and reimbursing him for his business-related expenses.

Last October, he won his case, securing $16,000 in damages for uncompensated work and unreimbursed expenses.

“I want every other driver who has [been] mistreated like me in Amazon Flex ... [to] lawfully and completely get paid and [for] Amazon [to] stop taking advantage of drivers because they don’t know their rights,” he told The Examiner.

Now, he might get his wish — at least in part.

Khodaei’s case was one of nine test cases out of 453 arbitration claims that a group of attorneys used to try to establish that Amazon was violating labor laws in its treatment of Flex workers, according to those attorneys.

After winning eight of those first nine cases, the lawyers on Tuesday assisted more than 15,750 other Amazon Flex drivers — including more than 1,700 in the Bay Area — in filing their own arbitration actions against the e-commerce giant .

Like Khodaei, the workers — who are spread across California, Massachusetts and Illinois — allege Amazon misclassified them as independent contractors and, as a result, failed to pay them for the hours they worked or for their business-related expenses, including mileage.

“Our goal ... [is] just to have Amazon recognize that these people are really their employees,” said Steven Tindall, an attorney at Gibbs Law Group who is representing the workers in their arbitration claims.

Amazon spokesman Branden Baribeau declined to comment on the mass arbitration filings or the allegations that the company had misclassified workers and deprived them of pay and expense reimbursements. Instead, in an emailed statement, he said Flex offers “competitive pay” while allowing workers to “set their own schedule and be their own boss.”

“We hear from most of the Amazon Flex delivery partners that they love the flexibility of the program,” he said.

In recent years, Amazon has built up a massive logistics operation that now delivers more packages than either UPS or FedEx. While many people are familiar with the Amazon-branded panel vans that deliver packages in residential neighborhoods, the company also depends on workers in its Flex program who use their personal vehicles to make what are often last-minute or rush deliveries.

Flex works similarly to DoorDash, Instacart or Uber. As with those companies, Amazon treats Flex drivers as independent contractors, rather than employees.

With Flex, drivers essentially sign up for shifts with the company on an ad hoc basis. Amazon gives them a set number of packages to deliver during a block of time and typically pays them a predetermined amount that’s based on the duration of that block.

If a delivery takes longer than Amazon forecasts, the company typically doesn’t pay drivers more — except in California, to meet the minimum-pay requirements of Proposition 22 . It also doesn’t pay drivers’ expenses, except, again in California, to reach the minimum Prop. 22 requirements. And it doesn’t pay overtime to drivers who spend more than 40 hours per week driving for Flex.

Fanny Jimenez said she has been driving for Flex for five years. The 37-year-old San Francisco resident has kids, and the program allowed her to work around their schedule. Until about five months ago, she was driving six to eight hours per day for Flex, six days per week. She said the pay she gets through Flex has been good enough that when it’s busy, she forgoes driving for Lyft, Uber and DoorDash , she said.

She’s not entirely happy with the work, though. In recent months, she said, she’s only been driving about four to five hours per day because it’s been a lot slower at Amazon’s distribution center in the Dogpatch neighborhood. Sometimes it takes her longer to deliver packages than Amazon allots her. And then there’s the issue of expense.

“I wish they’d pay for [my] miles,” Jimenez said.

That Amazon treats Flex workers as contractors and doesn’t pay such expenses is illegal under California, Massachusetts and Illinois law, attorneys for the drivers say. Because making deliveries is part of Amazon’s core business and it exercises considerable control over Flex drivers that are making those deliveries, those states’ laws require the company to treat those drivers as employees, not contractors, they argue.

But in the contract it requires Flex workers to sign, Amazon bars workers from filing suit — either as individuals or as part of a class action — to enforce their rights. It also prohibits them from filing an arbitration claim as a class.

Forcing employees into individual arbitration claims has been a growing theme in employment law since the U.S. Supreme Court opened the door to the practice in 2001. Companies and business advocates have argued that arbitration can be less expensive and faster than going through the courts.

But arbitration also offers numerous advantages to corporations. Unlike lawsuits, arbitration actions are typically kept private, which can prevent other employees who may have had their rights violated from knowing about them, said David Levine, a law professor at UC Law SF.

Indeed, none of the three Flex workers The Examiner spoke with outside Amazon’s Dogpatch distribution center had heard about the mass arbitration claims filed last week.

Additionally, because the decisionmakers in arbitration cases are typically lawyers or former judges rather than juries, there’s the sense that companies can avoid the kinds of massive payouts that juries might award, he said.

In response to such mandatory arbitration clauses, plaintiffs lawyers have been increasingly turning to mass arbitration actions, in which numerous employees file arbitration claims at once. The Amazon action last week is one of the biggest of its kind, Levine said.

“It’s kind of a way to fight back,” he said.

So far, the arbitrators in the Amazon cases have largely agreed with the Flex drivers. Of the eight rulings that went in workers’ favor, arbitrators have awarded the winning drivers an average of $9,000 in damages and as much as $22,000 in one case, according to Tindall and Joseph Sellers, a partner at Cohen Milstein Sellers & Toll who is also representing the workers.

In its explanation of terms for California Flex drivers, Amazon cites Prop. 22. That law, which was passed by voters in 2020 and classifies certain delivery and ride-hailing drivers as independent contractors, is currently being reviewed by the California Supreme Court. While it remains in force, Amazon hasn’t used it as a defense in the arbitration cases, Tindall said.

Tindall and Sellers said they’re hopeful that the more than 16,000 remaining cases will move faster now that they’ve gone through those test cases. And as big as that number is, they could add to that total. As of 2021, 2.9 million people in the U.S. had downloaded the Flex app, Bloomberg reported.

“We have people contacting us,” Tindall said.

“Every day,” Sellers said.