Amazon, Delivery Partners Face Off Over Arbitration on Appeal

The Fourth Circuit pressed a woman who owns a company that provides delivery services for Amazon Logistics Inc. to explain why she should qualify as a transportation worker exempt from forced arbitration of a wage dispute.

Ahaji Amos and her company, Kirk Amos Delivery & Courier LLC, argued that the Amazon.com Inc. subsidiary’s contract with Kirk is actually an employment contract between Amos and Amazon. That makes Amos a transportation worker exempt from the Federal Arbitration Act, she and her company told a skeptical US Court of Appeals for the Fourth Circuit panel Wednesday.

Amazon’s no stranger to circuit court fights over the extent of the FAA’s transportation worker exemption, which the US Supreme Court expanded in its Southwest Airlines Co. v. Saxon opinion, issued in June 2022. The company headed to the Ninth Circuit in March to argue that drivers for its Flex delivery service don’t qualify for the exemption because the tip-related claims at issue in that case stem from local—not interstate—deliveries.

Amos and Kirk accuse Amazon of misclassifying them as independent contractors despite treating them as employees and of violating the Fair Labor Standards Act by failing to pay wages for all of their hours, including overtime. The district court granted Amazon’s motion to compel arbitration in 2022.

The FAA transportation worker exemption is “narrow” and “begins and ends with the contract,” Diana Siri Breaux, arguing the case for Amazon, told the Fourth Circuit. Breaux is the Seattle-based chair of Summit Law Group PLLC’s litigation group.

The exemption talks about employment contracts and types of workers—seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce—so it applies to individual people, not companies like Kirk, Breaux added.

“Arbitration is not a bad outcome,” so a bright-line rule that an LLC like Kirk can’t have an employment contract with another company like Amazon for exemption purposes makes sense, Breaux told the panel.

How Many Trucks?

One of the Fourth Circuit judges questioned why Amos’ brief didn’t mention that through Kirk she employed approximately 450 other people to make Amazon deliveries. The court discovered Kirk’s workers through Amazon’s brief, the judge said.

Amos and Kirk’s district court complaint included details about the number of people Kirk employed, Jesse H. Rigsby IV, a Banks Law Firm attorney who represents the appellants, told the court. The 450 estimate is actually spread over at least a year and a half because of high turnover, he added.

The same judge also repeatedly sought clarification as to how many delivery trucks Kirk owned or leased, several times to laughter from the courtroom. He pointed out that the judges see trucks bearing Amazon logos on highways and making deliveries to their homes and accused Amos of “trying to conceal the facts” from the court.

Kirk owned two delivery trucks and leased others, Rigsby said. The number of leased trucks fluctuated based on Amazon’s delivery needs, and the total number isn’t in the record, he added.

Amos and Kirk might not think the number of trucks is relevant, but it is, because “I want to know,” the judge said.

Arbitration Exemption Elsewhere

The First, Second, Third, and Fifth circuits have also wrestled with the appropriate reach of the transportation worker arbitration exemption in recent cases involving Uber Technologies Inc., Postmates LLC, and Flowers Foods Inc., although none dealt specifically with whether the exemption is available to LLCs like Kirk.

The First Circuit in November rejected Postmates delivery drivers’ contention that they qualified for the exemption less than a month after hearing oral argument, and the Third Circuit last month ruled that ride-hailing drivers can’t use the exemption to avoid arbitrating allegations that Uber misclassified them as independent contractors instead of employees with better pay protections.

The full Second Circuit in February declined to rehear a case in which the court blocked Flowers Foods distributors from using the provision, although multiple judges wrote separately that the opinion contravened the Supreme Court’s Saxon holding and deserved another look.

Judges Paul V. Niemeyer, Robert B. King, and Pamela A. Harris made up the panel.

Morningstar Law Group also represents Amazon.

The case is Amos v. Amazon Logistics Inc., 4th Cir., No. 22-01748, argued 5/3/23.