Amazon’s Legal Fights with NLRB Could Affect Future of Joint Employer Doctrine

Online retailer Amazon receives over 11.95 million orders each day and contracts with delivery service partners (DSPs) to complete its abundant deliveries. Amazon employees, technology, and operations work to fulfill online orders, and the orders are packaged at fulfillment centers and dispatched to delivery stations. At the delivery stations, the DSPs take over. They direct teams of delivery associates to load the packages into their vehicles and deliver them to Amazon customers.

Amazon currently has over 3,500 DSPs worldwide and prides itself on maintaining mutually beneficial relationships with each. Recently, however, decisions from the National Labor Relations Board (NLRB) concerning the relationship between Amazon, its DSPs, and the DSPs’ delivery drivers threaten not only the future of Amazon’s delivery model but also the future of the joint employer doctrine.

Delivery Drivers Unionize

In Palmdale, California, approximately 84 delivery drivers working for Amazon DSP Battle-Tested Strategies voted to unionize with Teamsters Local Union No. 396, an affiliate of the International Brotherhood of Teamsters. The organized members of Teamsters 396 negotiated a contract with Battle-Tested Strategies that, among other things, demanded an immediate wage increase and contained provisions governing future wage increases and vehicle conditions.

Under Amazon’s contract with Battle-Tested Strategies, Amazon maintained control over details such as wage floors, delivery routes, and delivery schedules. The negotiated contract between Teamsters 396 and Battle-Tested Strategies required Amazon to revisit and potentially alter such details.

In April 2023, the unionized delivery drivers informed Amazon of the negotiated contract between Battle-Tested Strategies and Teamsters 396 and demanded that Amazon recognize the drivers’ right to contract. Amazon, however, maintained the delivery drivers were not Amazon employees but rather employees of Battle-Tested Strategies, and thus, it declined to negotiate any contract with Teamsters 396. Strikes ensued, Amazon terminated its contract with Battle-Tested Strategies, and Teamsters 396 filed charges with the NLRB accusing Amazon of unfair labor practices.

Teamsters 396 alleged Amazon failed to bargain with it in good faith and terminated its contract with Battle-Tested Strategies when delivery drivers began engaging in union activity. In response to the NLRB charges, Amazon repeatedly asserted that the 84 Palmdale drivers were employed by Battle-Tested Strategies—a third party—and that it should not be responsible for any “union busting” or failure to collectively bargain. Specifically, Amazon asserted it didn’t exert sufficient control over the delivery drivers to qualify as a joint employer.

After a lengthy investigation into Teamsters 396’s allegations, however, the NLRB regional director disagreed with Amazon and concluded the company is a joint employer of its delivery drivers. As a joint employer, Amazon would have a duty to collectively bargain with unions such as Teamsters 396.

Aftermath of NLRB’s Determination

Teamsters’ spokespersons indicated the union confidently expected the Palmdale, California, “joint employer” ruling to extend to all unionized DSPs and delivery drivers nationwide. That appears to be exactly the path the NLRB seeks to pave.

In Atlanta, Georgia, on September 4, 2024, an NLRB prosecutor similarly determined that Amazon should be held jointly liable alongside a DSP for allegedly discouraging delivery drivers from unionizing. The Board is expected to file complaints against Amazon in both cases (the Palmdale, California, case and the Atlanta case) unless Amazon agrees to settle the matters.

Bottom Line: What Is the Effect on Everyday Employers?

The joint employer doctrine has been an evolving and contentious area of employment law since its inception. Currently, companies can only be considered joint employers if they exercise substantial and direct immediate control over one of more of a worker’s essential terms and conditions of employment.

The NLRB, however, has at various times sought to aggressively expand the scope of the joint employer doctrine. For instance, in October 2023, the Board issued a rule that would have considered companies joint employers if they possessed or reserved any ability to control workers—even if not direct control, exercised control, or control related to the essential terms and conditions of a worker’s employment. The U.S. District Court for the Eastern District of Texas struck down the NLRB’s rule on March 8, 2023.

The fights between the NLRB and Amazon serve as recent examples of the Board seeking to broadly enforce the joint employer doctrine and exhibit the potential for contentious litigation when any degree of control is exercised over a contract worker.

Brittany L. Smith is an attorney with Steptoe & Johnson PLLC in Charleston, West Virginia, and can be reached at brittany.smith@steptoe-johnson.com.

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