Amazon has agreed to pay $3.95 million to settle a lawsuit by which it was accused of subsidizing its labor prices by stealing the information its drivers obtained to cowl a part of the workers’ base wages, D.C. Legal professional Normal Brian L. Schwalb introduced Friday.
In response to Schwalb, Amazon misled customers in Washington, D.C., between 2016 and 2019 by assuring them that each one the information they offered would go to Amazon’s Flex drivers, staff who ship packages with their very own vehicles.
Schwalb’s workplace alleged that by diverting hundreds of thousands of {dollars} in ideas, Amazon was in a position to save by itself working prices and due to this fact improve earnings.
“When companies mislead customers to boost their profits by stealing tips intended for their workers, they are cheating their consumers, their employees, and their competitors who play by the rules,” Schwalb mentioned.
Amazon mentioned in a press release to Fox Information Digital that the corporate disagrees with the allegations, noting that Amazon Flex has developed since then.
“For nearly a decade, Amazon Flex has empowered delivery partners to earn extra money on their own schedules,” Amazon spokesperson Steve Kelly mentioned. “Like any successful program, Amazon Flex has evolved over time, and this lawsuit relates to a practice we changed more than five years ago. While we continue to disagree with these allegations, we’re happy to have the matter behind us so we can continue to focus on supporting delivery partners and customers.”
When Amazon Flex launched in 2015, customers had been in a position to tip their supply drivers at checkout, which acknowledged that 100% of the information would go to the drivers.
The lawsuit claimed that Amazon modified its driver cost mannequin the next 12 months, and that as an alternative of permitting the tricks to improve the motive force’s whole compensation, the corporate used it to cowl the workers’ base wages Amazon had already promised to pay the drivers.
In response to the Federal Commerce Fee, the cost mannequin change was not disclosed to the drivers or the customers, permitting the mannequin to proceed taking ideas till 2019, when Amazon grew to become “aware of the FTC’s investigation in 2019.”
The corporate was accused of stealing greater than $1 million in tricks to cowl its labor bills.
As a part of a settlement with the FTC in 2021, all the client ideas at subject had been finally paid to the drivers, based on an Amazon spokesperson at the moment.
Other than the restitution-only settlement with the FTC, the lawyer normal’s workplace filed a lawsuit for injunctive aid and civil penalties, noting that extra penalties had been warranted to disincentivize illegal habits.
“It’s not sufficient, after being caught, to simply give back the ill-gotten gains,” Schwalb mentioned. “Rather, there must be meaningful consequences to deter misconduct from happening in the first place. Especially when living expenses are harder and harder to afford, my office will continue to ensure that hardworking District residents receive every penny of their earnings and consumers have confidence that they are not being misled.”
In response to the settlement, Amazon has denied all of the allegations and claims.
“Amazon maintains that it made truthful, complete, unambiguous, and accurate representations to customers regarding tips for drivers,” the settlement acknowledged.
In response to the settlement phrases, Amazon pays $3.95 million, together with $2.45 million in penalties and $1.5 million in prices.
The corporate has additionally agreed to keep up clear tipping practices.
“If Amazon uses tips for any purpose other than increasing driver compensation, the company must make clear disclosures about how tips are used on both its website and its app,” the settlement acknowledged.
Fox Information’ Daniella Genovese contributed to this report.
