Ridesharing media has recently reported how the Virginia Supreme Court upheld a ruling wherein Amazon has to consider its Flex drivers as employees and not independent contractors, all the while criticizing Amazon for changing its legal arguments after previous losses.
Previously, Amazon Logistics tried to argue that a ruling tagging a Flex driver as an employee should not apply to all Flex drivers. But, the media said this contradicted their initial stance, wherein it insisted the ruling must apply to all drivers.
The Virginia court then dismissed Amazon’s attempt to change its previous argument, stating that the company “zig-zagged.”
The world knows Amazon Flex is an app-based delivery program where individuals can be drivers provided they sign up for three- to four-hour time slots using their own vehicles as the app streamlines the delivery of packages and groceries.
This particular case erupted when Donald Diggs, a Flex driver, applied for unemployment benefits and submitted his 1099 tax forms which show Amazon had never withheld taxes from his earnings.
This, then, triggered an investigation from the Virginia Employment Commission to determine whether Amazon was obliged to report Diggs’ earnings as wages and pay unemployment taxes.
Following an inquiry, a commission tax representative concluded Diggs and the rest of other Flex drivers as Amazon employees. Of course, Amazon disagreed to this and requested a hearing.
Evidence presented in May 2020 included the Flex contract, a liability questionnaire, the commission’s determination letter, and testimony from Diggs, an Amazon senior manager, and the tax representative.
In particular, the senior manager of Amazon testified that the Flex agreement and procedures specific to the app applied equally to every driver. Meanwhile, Diggs detailed Amazon’s performance review system and training requirements.
The hearing examiner applied the IRS’s 20-factor test, which evaluates employer control. It determined that Amazon exerted significant control over its Flex drivers, classifying them as employees. The examiner likewise ruled that Amazon must pay unemployment payroll taxes for other misclassified Flex drivers.
Therefore, Amazon appealed to the circuit court, upholding the commission’s decision. A unanimous Court of Appeals likewise affirmed that Diggs was an employee and that the ruling applied to all Flex drivers since the program’s terms were uniform.
Taking its case to the Virginia Supreme Court, Amazon argued that the lower court erred in extending the ruling to all Flex drivers.
However, here’s where the important matter is. The Supreme Court rejected Amazon’s claim, citing procedural rules that prevent parties from contradicting their prior positions in litigation. The top court found the appeal from Amazon inconsistent with its earlier arguments, stating that Amazon initially sought a broad ruling on all Flex drivers but reversed its stance after losing.
Also, Amazon alleged that the commission violated its due process rights by disallowing sufficient record-building beyond the situation of Diggs. However, the court ruled this particular claim failed under the approbate-reprobate doctrine, preventing litigants from taking contradictory positions to suit their needs.
There was also another argument from Amazon at the Court of Appeals that drivers enrolled after July 1st, 2020 must be exempt because of a legal change removing the 20-factor test of the IRS. But, the court declined to consider this argument since Amazon failed to properly present this in its brief.
While upholding the ruling, the court in Virginia noted that Amazon could seek a new hearing if future legal changes or updates to the Flex contract warranted reconsideration.