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Thousands of drivers file arbitration claims against Amazon
NEW YORK | Thousands of delivery drivers filed legal claims against Amazon on Tuesday, alleging the company’s classification of them as independent contractors instead of employees has led to unpaid wages and other financial losses.
Two law firms spearheading the action said about 15,860 Amazon Flex drivers have submitted arbitration claims with the American Arbitration Association, where 453 similar cases are already being litigated.
Amazon’s Flex program, which was founded in 2015, signs up drivers to deliver packages with their own cars and a special app.
The company pitches the work as a flexible, part-time opportunity that allows people to earn extra income during the hours they choose. Most drivers earn $18-25 per hour, according to Amazon, though how much they get paid can depend on other factors, such as their location and how long it takes to complete deliveries.
The arbitration claims submitted Tuesday were made by drivers in California, Illinois and Massachusetts, all of which have rules that limit the amount of control companies can exert over independent contractors. The claims, collected over a span of four years by attorneys Joseph Sellers and Steven Tindall, maintain the drivers should be classified as Amazon employees instead of independent contractors, based on current laws in the three states.
That change would allow Flex drivers to collect unpaid wages because Amazon only pays them for a pre-determined number of hours regardless of how long it takes to complete deliveries, according to the lawyers. It would also allow Flex drivers to receive overtime pay if they work more than 40 hours a week and get reimbursements for work-related expenses, such as gas costs and vehicle wear and tear.
Gas and other vehicle costs are a “huge expense to our clients,” Tindall said during an interview. He also said one client represented in the claims worked 7-day weeks making deliveries for Amazon during a holiday period and never was paid overtime.
In a prepared statement, Amazon spokesperson Branden Baribeau touted the benefits of the Flex program, saying it gives “individuals the opportunity to set their own schedule and be their own boss, while earning competitive pay.”
“We hear from most of the Amazon Flex delivery partners that they love the flexibility of the program, and we’re proud of the work they do on behalf of customers every day,” Baribeau said.
Tindall and Sellers say they have so far succeeded in seven of the eight arbitration claims against Amazon they took to trial. The drivers they represented in those cases were awarded an average of $9,000 in damages.
Amazon’s business model for its driving workforce — made up of independent contractors and third-party businesses that allow the company to avoid unionization – faces scrutiny and challenges from different corners.
A bipartisan group of more than 30 U.S. senators sent Amazon CEO Andy Jassy a letter last week asking for more information on the company’s relationship with the thousands of independent businesses that make millions of deliveries each day as part of Amazon’s Delivery Service Partners program.
In March, the Wisconsin Supreme Court let stand a lower court ruling that declared Flex drivers to be employees — a decision that would allow them to be part of the state’s unemployment insurance system and entitled to jobless pay if they are laid off.
The Teamsters union, which is seeking to organize Amazon’s drivers, also filed a complaint at the National Labor Relations Board last year challenging how the company classifies some of its drivers.
GM board approves another $6 billion share repurchase
WASHINGTON | General Motors has approved another $6 billion share repurchase as the Detroit automaker adds to its 2024 momentum.
The Tuesday announcement follows a $10 billion share buyback authorization in November of last year. Shares in the Detroit automaker rose 1.4% to $48.21 Tuesday while broader markets were mixed. GM’s shares are up 34% since the beginning of 2024.
GM, which announced in April that it was moving its Detroit headquarters to a new downtown office building next year, also raised its dividend to 12 cents per share from the previous 9 cents per share.
Also Tuesday, GM said it’s investing another $850 million into the troubled Cruise autonomous vehicle unit. The money will “help with operational cash needs” at Cruise until the company finds the right long-term capital strategy that could include partnerships and funding from outside of GM.
Cruise suspended operations in October when one of its Chevrolet Bolt autonomous electric vehicles dragged a San Francisco pedestrian roughly 20 feet (6 meters) to the curb at roughly 7 miles per hour (11 kilometers per hour), after the pedestrian was hit by a human-driven vehicle.
But the California Public Utilities Commission, which in August granted Cruise a permit to operate an around-the-clock fleet of computer-driven taxis throughout San Francisco, alleged Cruise then covered up details of the crash for more than two weeks. The incident resulted in Cruise’s license to operate its driverless fleet in California being suspended by regulators and triggered a purge of its leadership.
At Deutsche Bank’s Global Automotive Conference Tuesday, GM Chief Financial Officer Paul Jacobson said the company has reduced its full-year electric vehicle production forecast to between 200,000 to 250,000. Previously the company had predicted 200,000 to 300,000.
Industry analysts had expected EVs to account for 10% of U.S. vehicle sales this year, but it’s now trending toward about 8%, Jacobson said.
This year has proven to be a bit of a renaissance for General Motors, whose shares sunk to around $26 late last year. Excluding the pandemic swoon in spring of 2020, GM shares hadn’t fallen that low in a decade.
GM turned a first-quarter profit of $2.97 billion, up 25% over the same period a year earlier, boosted by strong deliveries of pickup trucks and other higher-profit vehicles. Though U.S. vehicle sales dipped slightly early this year, the company has emphasized its focus on profitability and managing expenses. It easily beat Wall Street’s sales and profit targets and raised its guidance for 2024.
GM’s resurgence comes as rival U.S. automakers seem to be treading water, even as new car sales remain healthy. Ford’s shares are up less than 1% this year and the company’s first-quarter net income fell 24% from a year ago.
Stellantis reported a first-quarter sales decline and its shares are down almost 7% this year.
Elon Musk’s Tesla reported a sharp first-quarter sales decline amid increased competition and a slowdown in electric vehicle sales. Sales fell 9% in the period, the first year-over-year quarterly sales decline in nearly four years. The drop in sales came even as the company rolled out numerous and generous price cuts to some models. Tesla shares have lost nearly a third of their value this year.
Waffle House raises worker pay after strikes and pressure
Waffle House is increasing pay for its U.S. workers after a year-long push from labor advocates.
In a video message to employees late last month, Waffle House CEO Joe Rogers III said base pay would rise to at least $3 per hour in June and then gradually rise to at least $5.25 per hour by June 2026. Base pay doesn’t include workers’ tips, and will be higher in some states depending on minimum wage laws, Rogers said.
Rogers said wage increases will be paid for by higher menu prices, and that wages will rise more slowly in some rural markets than in urban ones. The company is also adding tenure bonuses and premiums for working later shifts.
Waffle House wouldn’t confirm the wage increase Tuesday when it was contacted by The Associated Press. The Union of Southern Service Workers, a labor group affiliated with the Service Employees International Union, provided the AP with a link to the video.
Over the last year, the Union of Southern Service Workers has held strikes at Waffle House locations to demand higher pay, 24-hour security at restaurants and an end to the company’s practice of deducting $3.15 per day from workers’ paychecks for meals regardless of whether they eat while on the job.
The group also has asked the Department of Labor to review the meal deductions.
“The raises show that the company is feeling the heat,” Katie Giede, a Waffle House server in Atlanta who wants to see wages increased to $25 per hour, said. “We’re going to keep organizing and keep fighting until we win.”
Waffle House has 2,000 restaurant locations across the U.S., primarily in the South and Midwest. The company has its corporate headquarters in Norcross, Georgia.
—From AP reports
