When Amazon visits a home or business to drop off a buyer’s latest purchase, the package may be delivered by either company employees or independent delivery persons, known as “Flex” drivers, who use their own cars when transporting merchandise. One “Flex” driver filed a putative class action suit against Amazon on behalf of similarly classified workers who claim that Amazon spied on them in violation of state and federal laws. Amazon argued that “Flex” drivers’ employment terms require them to submit all claims to arbitration rather than to a court. The District Court disagreed, and now the Ninth Circuit has affirmed.

Plaintiff Drickey Jackson sued Amazon.Com, Inc. in 2021 for injunctive relief and damages caused by an invasion of the privacy of “Flex” drivers when Amazon unlawfully “monitored and wiretapped” closed, private Facebook group conversations among them. Judge William Q. Hayes of the Southern District of California denied Amazon’s motion to compel arbitration because he did not believe the dispute fell within the scope of the “Flex” drivers’ mandatory arbitration clause in their “Terms of Service Agreement” (TOS) contract with the company. Amazon argued, unsuccessfully, that the 2019 TOS, rather than the earlier one, should apply.

In a 2-1 decision authored by Justice Mary M. Schroeder of the Ninth Circuit Court of Appeal, with a partial concurrence and a partial dissent by Justice Susan P. Graber, the majority ruled that the district court correctly denied Amazon’s motion to compel arbitration. Schroeder wrote that agreement fell “outside the scope” of the TOS because the “spying” did not occur during employment hours, but at times when the “Flex” drivers were off-the-clock. In addition, the court ruled that “the alleged misconduct would be wrongful even if there had been no contract.”

Schroeder made it clear that the Court had not been asked to determine whether “Flex” drivers are employees or independent contractors. She explained that when Jackson signed up to join Amazon in 2016, he signed a TOS that contained an arbitration clause that covered “any dispute or claim . . .

arising out of or relating in any way to this Agreement, including . . . participation in the program or . . . performance of services.” While Jackson had the right to opt out of the clause, he did not do so. Amazon also emailed an updated version of the 2016 TOS to Jackson in 2019.

The private, closed Facebook conversations covered a variety of topics, including their pay, benefits, working conditions, unionizing activities and planned strikes. It also discussed approaches by researchers who were “examining Amazon’s workforce.” Jackson cited several laws that Amazon broke when it wiretapped and monitored its workers’ Facebook conversations. These included the California Invasion of Privacy Act, part of California’s Penal Code; the California Constitution; the Federal Wiretap Act; and the Stored Communication Act.

The Ninth Circuit opinion began by rejecting Amazon’s claims that the court lacked jurisdiction to hear the appeal. This argument was unpersuasive due to precedent that said denials of motions to compel arbitration are “immediately appealable” because they “deprive appellants of the opportunity to arbitrate disputes…decisions(s) with serious consequences that can only be challenged by immediate appeal.”

Next, the opinion discussed whether the 2016 or 2019 TOS should apply. It ruled that the 2016 agreement should be applied because Amazon failed to show any evidence that Jackson either received or consented to the subsequent TOS that had allegedly been distributed to him by email. Since the burden to show notice and assent was on Amazon, the company failed to meet that requirement.

With these preliminary arguments decided, Schroeder then turned to the key issue: how to interpret the 2016 arbitration clause. She made it clear that Jackson’s allegations “involve employer misconduct wholly unrelated to the parties’ agreement.” She said that the “controversy in this case is ultimately not about any characteristics or conduct of class members, but whether Amazon is indeed liable for wiretapping and invasion of privacy.” She summarized that all relevant precedents ruled that arbitration can be denied when “the harm was not related to the employment.” The only relationship, she wrote, is that Amazon’s misconduct did occur while Jackson and members of his class were employed.

The opinion concluded that “Amazon’s alleged misconduct existed independently of the contract

and therefore fell outside the scope of the arbitration provision in the 2016 TOS. The district court therefore correctly denied Amazon’s motion to compel arbitration.”

Amazon is the second-largest company in the world, and certainly the world’s largest online retailer. Its revenue in 2023 was reported to be $502.19 billion. One can’t help but wonder why it would feel a need to spy on the Facebook posts of its “Flex” drivers. Perhaps this will be discovered during the next phase of the class action suit.