State attorneys general seeking to build on incremental wins in the long fight over gig worker classification can look to New Jersey as it escalates its driver employment status suits with a sweeping case against
New Jersey’s AG and labor department accused Amazon of misclassifying delivery drivers in its Flex program as independent contractors, depriving them of benefits and legal protections employees receive, including paid family leave, unemployment benefits, and minimum wage and overtime pay.
Amazon has fought similar legal battles in other states, as have
State AGs are generally better positioned than driver plaintiffs to bring misclassification suits, but their efforts are complicated by variations in the tests used to determine worker classification and the popularity of gig-based delivery and transportation services.
Regulators and attorneys general rarely, if ever, win wholesale reclassification of a company’s drivers as employees, particularly at a large corporation like Amazon, said Samantha Prince, a professor at Penn State Dickinson Law.
But there’s a growing track record of “being able to at least take a bite at the apple and get some benefit for them that’s typically only available to employees,” she said, citing Wisconsin’s and Virginia’s smaller wins related to unemployment benefits in 2024 and 2025.
Amazon disputes the misclassification claims in the Oct. 20 litigation.
“These lawsuits are wrong on the facts and the law, and misrepresent what Amazon Flex is and how it works,” said spokesperson Mary Kate Paradis, noting drivers can set their schedules by selecting available time blocks. “Many drivers tell us they value this flexibility and the ability to be their own boss.”
Aggressive States
Despite the many obstacles to their winning a case, state AGs and regulators pose the biggest legal threat to businesses worried about worker classification challenges, said Todd Lebowitz, a partner at BakerHostetler LLP in Cleveland.
That’s thanks in part to a softening of federal enforcement under the Trump administration and the prevalence of mandatory arbitration clauses. These clauses don’t inhibit court access for AGs and regulatory agencies.
Delivery drivers can be barred from bringing lawsuits through mandatory arbitration clauses, although the US Supreme Court is revisiting whether “last-mile” drivers can escape arbitration demands through the Federal Arbitration Act’s transportation worker exemption.
“There are several states that are pretty aggressive about it, and they like to publicize their wins and their settlements,” Lebowitz said of delivery driver suits, naming California, Massachusetts, Minnesota, New Jersey, and Washington DC as among the most active.
The Illinois AG announced an $11 million settlement with DoorDash in 2024 over driver tips. Instacart agreed to a $46.5 million settlement with the San Diego city attorney in 2022 over driver classification.
State and local officials often win back pay for drivers or state benefit funds with no change in companies’ treatment of drivers going forward.
New Jersey’s wins include settlements with
In the Amazon suit, New Jersey is taking a bigger swing—asking the court to order a change in the drivers’ classification, back pay for allegedly lost wages, penalties, and money for state benefit funds.
Although Amazon is sure to fight hard, New Jersey has a strong argument that Flex drivers are employees under the strict three-factor “ABC” test that the state uses for worker classification, said Maya Pinto, senior researcher and policy analyst at the National Employment Law Project. That’s because the company exerts control over the drivers’ work and pay, among other factors, she said.
Virginia and Wisconsin’s labor agencies found Amazon’s drivers should be classified as employees under less stringent classification tests for purposes of unemployment benefits, and state courts upheld those findings.
“The companies that run these delivery apps, they fail every test for independent contractor status out there,” Pinto said.
In Wisconsin, a state appellate court found Amazon met only five of nine possible factors for showing workers are independent contractors. The state’s unemployment law requires at least six. Among the factors it failed were that a contractor advertises as operating an independent business and they contract with multiple employing entities. The state supreme court affirmed the decision.
The New Jersey DOL also is considering a regulation to clarify how it applies the ABC test. Opponents, which include some Democratic state lawmakers, say it would make New Jersey’s test the toughest in the nation and prevent many businesses from contracting with independent workers.
The New Jersey AG’s office and DOL declined to comment on the pending Amazon litigation.
‘Ugly Fight’
Smaller companies aren’t as successful at fending off regulatory actions without reclassifying workers, Lebowitz said. Regulators won recent cases forcing reclassification in the home health industry, he added.
But that’s rare when targeting large corporations like Amazon.
“It’s a big ugly fight when you’re dealing with companies that are that well-funded and they’ve been pretty successful in getting settlements that don’t require them to reclassify. And they’re not admitting that they’ve done anything wrong,” he said. “Every settlement is a business decision.”
A few states have achieved longer-lasting success, such as Uber and Lyft settlements with Massachusetts and New York state officials that guaranteed minimum pay rates and benefits.
Private litigation also continues but often faces mandatory arbitration agreements and class-action waivers, said Shannon Liss-Riordan, a plaintiff’s attorney with Lichten & Liss-Riordan P.C. representing drivers in suing Amazon.
She avoided being forced into arbitration in a class action against Amazon in 2016, but the case has faced persistent delays and hasn’t yet made it to trial.
“The litigation has just crept along so slowly,” she said. “In the meantime the companies make money and the legal protections are ignored.”
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