New Jersey sues Amazon, accusing its delivery network of illegally suppressing wages

New Jersey filed a lawsuit against Amazon on Tuesday, accusing the e-commerce giant of illegally exploiting its dominant position in the package delivery network to suppress the wages and working conditions of thousands of delivery drivers while preventing them from organizing unions.

The lawsuit has been submitted to the federal court in New Jersey, accusing Amazon of violating federal and state antitrust laws through its "Delivery Service Partners" program. The complaint states that Amazon has implemented illegal "buyer monopolies" in this program, meaning it has the ability to dictate prices and terms, thereby controlling the small businesses and drivers it employs to deliver packages.

Unlike traditional monopoly cases that focus on consumer prices, New Jersey argues that Amazon uses its buyer power to suppress the pay of delivery contractors and drivers by making delivery service partners almost entirely dependent on the company while strictly controlling their operations. The complaint alleges that Amazon dictates routes, hiring, pay, performance standards, and other aspects of these businesses, leaving them with little bargaining power or ability to serve other customers.

The state also accuses Amazon of terminating or threatening to terminate contracts with delivery contractors whose workers attempt to organize unions, thereby preventing union formation, and limiting competition among contractors through policies that restrict mutual hiring of drivers. Amazon disputes this claim. The complaint mentions organizing activities at an Amazon delivery station in Queens, New York, where Amazon allegedly reduced routes, laid off workers, and ultimately terminated a contractor's contract following union activities.

New Jersey Attorney General Jennifer Davenport is seeking triple damages, a court order prohibiting the described anti-competitive behavior, and preliminary injunctive relief to prevent Amazon from terminating more delivery service partners during the litigation.

The complaint states that the income of delivery service partner drivers is far below that of employees at United Parcel Service, FedEx, and the U.S. Postal Service, while they work under harsh conditions, including electronic monitoring, opaque performance metrics, and pressure to meet delivery quotas. It also claims that Amazon's policies effectively prevent drivers from moving between delivery contractors, limiting labor competition and keeping wages below competitive levels.

Amazon spokesperson Steve Kelly stated that the lawsuit is "factually baseless" and that the description of the Delivery Service Partners program and labor conditions is incorrect.

Kelly stated that delivery service partners are independent business owners who decide on hiring, fleet management, and capacity planning on their own and can choose to work with companies other than Amazon. He added that based on data considering factors such as site complexity, traffic, and geography, most delivery routes are completed on time or ahead of schedule.

Kelly noted that Amazon had previously cooperated with the Attorney General's office, but the state did not raise the core allegations in the complaint before filing the lawsuit. He stated that Amazon believes "the facts will speak for themselves in court."