Trial Magazine

In our modern corporate landscape, large companies frequently outsource work to independent contractors. Classifying workers as independent contractors lets companies increase efficiency to keep up with market demand while reducing the costs and legal obligations associated with a direct employment relationship. This business model further benefits companies by serving as a shield from liability for the negligent acts of purported independent contractors at the expense of the injured public. However, when you can prove an agency relationship existed, vicarious liability may be established under the doctrine of respondeat superior.¹

An individualized analysis based on the particular facts of a case is required to determine whether an agency or independent contractor relationship exists.² Generally, “[an] independent contractor is one who, exercising an independent employment, contracts to do a piece of work according to his own methods, without being subject to the control of his employer except as to the result of his work.”³ However, “where one who performs work for another represents the will of that other, not only as to the result, but also as to the means by which the result is accomplished, he is not an independent contractor but an agent.”⁴

Proving respondeat superior in an agency relationship will vary based on jurisdiction but widely depends on the level of control, or right to control, the purported principal maintains over the agent’s performance of the work at issue.

The test to determine the existence of agency is whether the purported principal has the right and authority to control and direct the means and methods of the undertaking.⁵ A principal does not have to maintain control over every single aspect of the agent’s work or micromanage the agent for there to be an agency relationship.⁶ Instead, it is enough to demonstrate the principal’s or employer’s right to direct the person as to the time, place, degree, and amount of services to be performed.⁷ Moreover, the relationship will be considered one of agency unless the only interest of the principal is in the “finished product.”⁸

When evaluating the existence of the right to control, and thus an agency relationship, jurisdictions may examine several factors. These include: direct evidence of the right or exercise of control; furnishing of equipment; method of payment; and right to terminate.⁹ Importantly, a “mere declaration does not make the contract something other than agency if a proper construction of its terms shows that the relation is one in fact of principal and agent.”¹⁰

Whether a person is an agent or an independent contractor is a question of fact, and our firm recently asked a jury in South Carolina to answer that question in the context of Amazon’s delivery drivers. The case, Shaw v. Amazon.com, Inc., involved serious injuries to a 43-year-old man who was driving his motorcycle on a straightaway when an Amazon delivery van turned left in front of him.¹¹ The driver of the van was directly employed by one of Amazon’s delivery service partners (DSPs), which are independently owned and operated companies that Amazon contracts with to deliver packages on its behalf.

Amazon’s defense against the plaintiff’s claims of vicarious liability and corporate negligence was simple: It claimed that no agency relationship existed between Amazon and the DSP or Amazon and the DSP’s driver. The jury disagreed and found in favor of the plaintiff. This was the first time nationally that a jury analyzed Amazon’s control over the DSP program to determine whether the e-commerce giant is responsible for the negligent acts of its delivery associates.

To dismantle the independent contractor defense, the plaintiff’s team built an arsenal of facts to demonstrate Amazon’s indisputable control over its delivery drivers—and you can use similar tactics in any case in which the defendant asserts the independent contractor defense.

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Logistics models are often complex and require a thorough examination and understanding to ensure the identification of all responsible parties.

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Learn the Logistics

Logistics models are often complex and require a thorough examination and understanding to ensure the identification of all responsible parties, including drivers or intermediaries potentially misclassified as independent contractors. Some of the most popular logistics companies in the United States are Amazon Logistics, DHL, FedEx, and UPS.

Amazon, once reliant on established shipping giants like FedEx and UPS, has now surpassed these mainstays to become North America’s top delivery network.¹² Amazon Logistics processed 4.79 billion U.S. delivery orders in 2022, equivalent to 13.13 million delivery orders per day or 546,941 per hour.¹³ In 2023, Amazon was projected to deliver over 5.9 billion packages.¹⁴

Amazon’s success stems from its vast network of fulfillment and sort centers, innovative delivery methods, and a workforce of millions of contracted drivers throughout its complex logistics network. To fully appreciate the control Amazon exerts over its behemoth delivery network, it is important to understand Amazon’s primary motivation for moving into logistics.

After struggling with fulfilling its quick delivery promises to customers, Amazon built its own logistics network to ensure more reliable service and faster delivery times to keep up with demand as its online customer base exploded.¹⁵ Its freight network includes global mile, middle mile, and last mile delivery programs.¹⁶

Amazon’s DSP Program is probably the most recognizable to the American public, which includes the trademark Amazon Prime delivery vans seen in neighborhoods across the country.¹⁷ The DSP Program is just one component of a larger delivery network and provides Amazon with more than 3,000 independently owned small businesses that Amazon vets, selects, and contracts with to perform “last mile” deliveries—or the final step in transporting Amazon packages from a hub or fulfillment center to customers’ doorsteps.¹⁸ In the United States alone, these DSPs employ more than 285,000 delivery drivers—called Amazon delivery associates—who help Amazon deliver millions of packages per day.

By partnering with thousands of DSPs, Amazon has revolutionized the shipping and transportation industries.¹⁹ Last year, Amazon, through its subsidiary Amazon Logistics, delivered more packages to homes in the United States than FedEx, the post office, and UPS, making it the biggest private parcel carrier in the country.²⁰

Amazon—like many other companies that benefit from this business model—leans heavily on its contract language with its DSPs as a basis for disclaiming liability for third-party injuries. The agreements with the DSPs explicitly state that the local delivery companies are independent contractors—not employees—of Amazon and that they are solely responsible for all conduct and supervision of the Amazon delivery associates the DSPs employ.²¹

As a result, Amazon contends it is insulated from tort liability for negligent acts of DSP drivers delivering packages on its behalf.²² However, the contract language alone is not determinative of whether an actual agency relationship existed.²³ In Shaw, Amazon argued that it contracted with its DSPs and their drivers for a specific outcome—package delivery—and that the DSPs had the liberty to use their own methods free from Amazon’s oversight and control to reach that result. The opposite is true: Amazon controls and monitors nearly every aspect of its last-mile delivery network.

Name the Right Defendants

Given the complexity of logistics networks, an early analysis of the logistics model and identifying the defendants involved is key to developing an effective litigation strategy.

For example, in Amazon cases, Amazon’s Relay Program involves semi- and box trucks that haul cargo from warehouse to warehouse; the DSP Program is for last-mile deliveries; and Flex drivers use their own vehicles to deliver direct to consumer doorsteps.²⁴ Amazon is a major corporation with numerous subsidiaries. Research which company, or companies, are implicated either through oversight of the drivers or ownership interests in the fleet vehicles.

Identifying a purported principal, like Amazon, and its involvement in a case can be difficult given the outsourcing to third-party carriers. In the context of Amazon, you may encounter motor vehicle cases involving Flex drivers who are operating their own personal vehicles. Amazon will likely not be identified on any collision report. Similarly, in Amazon Relay cases, the carriers are often independently owned and operated motor carriers.

In collisions involving vehicles used in Amazon’s DSP Program, the determination is much easier. Amazon will either be identified in the collision report as the vehicle owner, or the branding of the van will immediately notify you to the company’s involvement. Keep in mind that some of Amazon’s DSPs will operate unbranded vehicles. In that case, additional research may be needed if the van was procured through one of Amazon’s fleet management or leasing vendors.

If you can identify Amazon’s involvement presuit, we have found it’s best practice to file suit against the driver, the third-party carrier, and Amazon Logistics, Inc. immediately. This strategy will help streamline discovery and allow you to obtain the necessary contract agreements, policies and procedures manuals, and training materials directly from Amazon to build your agency case.

Collect the Essential Evidence

Amazon monitors a wide range of data on its delivery drivers using AI-enabled cameras and other tracking systems. For example, it has had Netradyne dash cameras on all its branded vehicles since April 2023.²⁵ Amazon also recently invested more than $200 million to implement new safety technologies across its transportation network.²⁶

Amazon’s implementation of driver tracking technology serves a dual purpose. While it enhances public safety by monitoring driver behavior, it also functions as a comprehensive tool for optimizing delivery efficiency. This approach is not unique to Amazon. More than 50% of medium- to large-sized commercial carrier fleets are using tracking and telematics systems, a field that continues to advance rapidly.²⁷ Additionally, in the realm of gig work, DoorDash, Lyft, and Uber have implemented systems to monitor driver safety and maintain control over their operational efficiency.²⁸

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By mandating the use of specific technologies and closely monitoring driver performance, these platforms exert significant control.

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The level of oversight these companies exercise goes beyond simply ensuring the completion of assigned tasks. This oversight extends to route optimization; performance monitoring to include tracking of acceptance rates, trip duration, and customer feedback; safety metrics including distracted driving, speeding, hard braking, and other unsafe driving behaviors; and real-time in-app communications with drivers. By mandating the use of specific technologies and closely monitoring various aspects of driver performance, these platforms exert significant control over how delivery services are performed.

Data evidence. When representing a client injured by an Amazon delivery driver, know what data is available, how to obtain it, and how to analyze it. Just as in any trucking case in which telematics can reveal crucial evidence, Amazon uses a variety of algorithms and technologies to plan and optimize routes assigned to DSPs and delivery associates. There are multiple data metrics to be obtained from each individual route, including package count, delivery stop sequence, and how a driver’s delivery efficiency compares to the overall assignment along the route.

Amazon also requires its DSPs and delivery associates to use certain software applications, either developed by Amazon or third-party vendors, so that it can closely monitor in real time the entirety of the delivery process, including driver conduct. It is essential to identify every application used and request and analyze all tracked metrics.

For example, Amazon requires delivery associates to download a third-party app, Mentor by eDriving, and be logged into the app for the duration of a driver’s 10-hour delivery shift. Mentor acts as a personalized driving coach. It tracks driving behaviors such as speeding, hard braking, cornering, seatbelt violations, and distracted driving events, and it assigns a FICO score, akin to traditional credit score ratings.

This data is then provided to Amazon, which uses it to provide scorecards and incentive pay to the DSPs and delivery drivers. This data is particularly useful in a distracted driving case because it can be analyzed historically to prove direct corporate negligence (such as negligent hiring, training, and retention).

For example, in Shaw, we subpoenaed the delivery associate’s FICO scores and corresponding metrics from eDriving for the duration of his tenure as an Amazon delivery associate and were able to prove he had more than 90 counts of distracted driving—which Amazon knew about—before the collision.²⁹

DSPs are independently owned businesses and may also implement other mobile apps and messaging software beyond Amazon’s requirements. It is important to request in discovery the identification of any additional tracking, scheduling, or team communication software applications that are used. If the software application is owned by a third party and not proprietary of Amazon, the best practice is to subpoena the data and metrics directly from the source. A digital forensics expert can help you understand the data evidence.

Documentary evidence. Although the process of collecting data and other documentary evidence from large corporations like Amazon is arduous, it is essential to exposing whether an agency relationship exists. Amazon’s internal documents dictating the processes and procedures for the different components of its logistics network are voluminous.

Like other companies, Amazon has hiring requirements, onboarding and other training materials, and policies and procedures manuals its third-party carriers and drivers must comply with to deliver packages on behalf of Amazon. These documents­—along with the extensive data metrics obtained from required tracking applications or telematics systems to establish control over hiring, firing, training, and retention; use of company tools; and method of payment—are all evidence of an agency relationship.

Finally, keep it simple. Know the agency law in your jurisdiction and synthesize the evidence you obtain from the documents and data to develop a checklist of the 10 to 15 most important pieces of evidence that establish the company’s pervasive control over its alleged independent contractors.

This will provide a roadmap for key admissions from local managers or workers to systematically dismantle the independent contractor defense and overcome dispositive motions. Ultimately, having workers themselves acknowledge the principal’s authority and control makes it more difficult for companies to maintain that these individuals are truly independent contractors.

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Alexandra N. Heaton is a trial lawyer at Yarborough Applegate in Charleston, S.C., and can be reached at alex@yarboroughapplegate.com.

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Notes

1. S.C. Ins. Co. v. James C. Greene & Co., 348 S.E.2d 617, 624 (S.C. Ct. App. 1986) (citing Reynolds v. Witte, 13 S.C. 5 (1879)).
2. Young v. Warr, 165 S.E.2d 797, 802 (S.C. 1969).
3. Id. (quoting 56 C.J.S. Master and Servant §3(1)).
4. Id. (quoting 2 C.J.S. Agency §2(d)) (other citations omitted).
5. Wilkinson ex rel. Wilkinson v. Palmetto State Transp. Co., 676 S.E.2d 700, 702 (S.C. 2009) (citations omitted).
6. Shatto v. McLeod Reg’l Med. Ctr., 753 S.E.2d 416, 420 (S.C. 2013) (quoting Nelson v. Yellow Cab Co., 538 S.E.2d 276, 280 (S.C. Ct. App. 2000)).
7. Id.
8. Id. (observing that “the relationship is one of agency when the employer reserves control and an interest in the performance of the work other than the finished product”) (citations omitted; emphasis added).
9. Wilkinson, 676 S.E.2d at 702.
10. Tate v. Claussen-Lawrence Const. Co., 167 S.E. 826, 829 (S.C. 1933); see also Kilgore Grp., Inc. v. S.C. Employment Sec. Comm’n, 437 S.E.2d 48, 50 (S.C. 1993); Todd’s Ice Cream, Inc. v. S.C. Employment Sec. Comm’n, 315 S.E.2d 373, 376 (S.C. Ct. App. 1984).
11. Additional pleadings outlining the agency argument against Amazon can be found in the public index. Shaw v. Amazon.com Inc., No. 2021-CP-18-02173 (S.C. Ct. Com. Pl. Dorchester Cnty. Dec. 7, 2023).
12. Seth Clevenger, Amazon Takes No. 1 Spot on Top 100 Logistics List, Transport Topics (Apr. 12, 2024), https://www.ttnews.com/articles/amazon-top-100-logistics.
13. Amazon Logistics Statistics, CapitalOne Shopping Research (Oct. 8, 2024), https://capitaloneshopping.com/research/amazon-logistics-statistics/.
14. Chris Morris, Amazon Is Set to Deliver 5.9 Billion Packages This Year—More Than UPS or FedEx in a Big Reversal, Fortune (Nov. 27, 2023), https://fortune.com/2023/11/27/amazon-delivers-more-packages-than-ups-fedex/.
15. Jay Greene, Amazon’s Big Holiday Shopping Advantage: An In-House Shipping Network Swollen by Pandemic-Fueled Growth, Wash. Post (Nov. 27, 2020), https://www.washingtonpost.com/technology/2020/11/27/amazon-shipping-competitive-threat/.
16. See Freight 101: First, Middle, and Last Mile Explained, Amazon (Feb. 1, 2024), https://freight.amazon.com/newsroom/2024-mile-stages?ref=E_CO_R4S_2024-mile-stages_WEB_AR_.
17. See Logistics, Amazon, https://logistics.amazon.com/.
18. An Update on Amazon’s Delivery Service Partner (DSP) Program, Amazon (Jan. 9, 2024), https://www.aboutamazon.com/news/policy-news-views/amazon-dsp-program-update.
19. Id.
20. Dana Mattioli & Esther Fund, The Biggest Delivery Business in the U.S. Is No Longer UPS or FedEx, The Wall St. J. (Nov. 27, 2023) https://www.wsj.com/business/amazon-vans-outnumber-ups-fedex-750f3c04.
21. Shaw, No. 2021-CP-18-02173, supra note 11.
22. Id. (See Amazon’s Answer to Plaintiffs’ Second Amended Complaint).
23. Tate, 167 S.E. at 829 (1933); see also Kilgore Group, Inc., S.E.2d at 50; Todd’s Ice Cream, Inc., 315 S.E.2d at 376.
24. Amazon Freight, https://freight.amazon.com/about-us; Amazon Relay, https://relay.amazon.com/; Amazon Flex, https://flex.amazon.com/.
25. The Power of Vision: Humanizing the Interaction Transportation Companies Have With Their Drivers to Enhance Driving Performance, Amazon, https://www.amazon.com/stores/Netradyne/Netradyne/page/3304DF88-2CA0-4498-96B3-28F7F9F1A57C.
26. Udit Madan, Amazon Will Spend $200 Million on Safety Technology Across Its Transportation Network in 2023, Amazon (Feb. 27, 2023), https://www.aboutamazon.com/news/transportation/amazon-will-spend-200-million-on-safety-technology-across-its-transportation-network-in-2023.
27. How Fleets Are Leveraging Telematics to Improve Their Bottom Line, CCJ (Mar. 24, 2023), https://www.ccjdigital.com/technology/video/15352529/penske-study-examines-fleets-use-of-telematics-data.
28. How We’re Testing New Features to Help Promote Dasher Safety on the Road, DoorDash (Nov. 3, 2023), https://about.doordash.com/en-us/news/testing-new-features-to-promote-safe-driving; Driving Safety Forward, Uber, https://www.uber.com/fr/en/ride/safety/.
29. Shaw, No. 2021-CP-18-02173, supra note 11.