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Amazon Logistics, Inc. v. Virginia Employment Comm., Record No. 0310-22-2 (Va. Ct. App. Sept. 26, 2023)

Case Briefs

September 26, 2023

By: Juli M. Porto

Virginia Appellate Law Blog

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In a 32-page opinion, the Court of Appeals affirms the Virginia Employment Commission’s determination that Amazon Flex drivers are employees for purposes of unemployment tax.


Facts. Ronald Diggs, a Flex delivery driver for Amazon Logistics, Inc. filed an unemployment claim, which led the Virginia Employment Commission to find that Amazon had misclassified Diggs as an independent contractor rather than an employee, and therefore owed unemployment insurance taxes for Diggs and all other Flex drivers.

Diggs and an Amazon representative testified extensively in the hearing before the Commission. Diggs testified that Flex drivers were required to take several tutorials to become a driver, pass a background test, and meet other criteria. The drivers were required to use Amazon’s Flex app, which tracked their location, movements, speed, and other personal information. From the app, drivers received “delivery blocks,” beginning at 6:00 a.m. each morning, which they could sign up for. They were required to arrive at a Fulfillment Center before the block began and complete their deliveries before 9:00 p.m. that night. The app specified a delivery window within which each customer expected their package and suggested the best sequence of deliveries and route. Drivers wore logoed vests and shirts. They were paid weekly via direct deposit at about $20 per hour. Before being allowed to deliver packages, drivers also had to agree to Amazon’s “Independent Contractor Terms of Services.” This agreement placed imposed several requirements on drivers, including limiting the types of transportation drivers could use to deliver packages and requiring drivers to meet “Service Standards” related to safety, reliability, delivery quality, and customer service. If a driver did not meet these standards, they could lose their eligibility to deliver for Amazon. The agreement also provided that Amazon could terminate a driver’s ability to deliver for Amazon for several reasons, including “other commercially reasonable cause.”

The Amazon representative testified that Flex drivers were “not integral” to Amazon’s business and estimated that under five percent of Amazon’s deliveries were made by Flex drivers. Flex drivers were allowed to cancel a delivery block up to 45 minutes before the block was to start. Drivers went through very little training, and they were only required to wear vests while in the Fulfillment Center.

Amazon appealed the Commission’s decision to circuit court, which affirmed it. Amazon then appealed to the Court of Appeals.


Issue. Whether Amazon Flex delivery drivers are employees or independent contractors for unemployment tax purposes.


Holding. Under the Virginia Unemployment Compensation Act, Amazon Flex delivery drivers are employees.


Notes. Code § 60.2‑212(C) of the Virginia Unemployment Compensation Act describes the standards that the Commission follows when determining the employment status of a person for unemployment tax purposes. It states that “[s]ervices performed by an individual for remuneration shall be deemed to be employment” unless the Commission determines “based upon an application of the 20 factors set forth in Internal Revenue Service Revenue Ruling 87-41.” That Ruling sets out 20 factors to determine whether an employer exercises sufficient control over a person to be able to classify the person as an employee: (1) instructions; (2) training; (3) integration; (4) services rendered personally; (5) hiring, supervising, and paying assistants; (6) continuing relationship; (7) set hours of work; (8) full time required; (9) doing work on employer’s premises; (10) order or sequence set; (11) oral or written reports; (12) payment by hour, week, month; (13) payment of business and/or traveling expenses; (14) furnishing of tools and materials; (15) significant investment; (16) realization of profit or loss; (17) working for more than one firm at a time; (18) making service available to general public; (19) right to discharge; and (20) right to terminate.

“Control” is “the core consideration in the 20-factor inquiry,” and they are not “rigid criteria.” They are merely guides. Once the Commission proves that services are performed for pay, the burden shifts to the putative employer to prove by a preponderance of the evidence that a person is not an employee.

Here, the Court of Appeals agreed with the Commission’s findings that “most” of the factors suggested an employment relationship, while only factor 13 suggested an independent contractor relationship. The Court of Appeals opinion focuses on factors 1, 6, 7, 8, 9, 10, 15, 19, and 20, finding that they warrant discussion “whether due to the strenuousness of Amazon’s arguments” or in response to “Amazon’s forceful objections.”

The opinion doesn’t tell us how much Amazon owes in taxes based on this opinion, but its “forceful objection” are no doubt on account of a very large number. Amazon will no doubt appeal this decision.


Read the Opinion

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