Labor & Employment Law Daily Wrap Up, PROCEDURE—Va. Sup. Ct.: Amazon’s shifting arguments regarding drivers’ employment status leads to loss on appeal, (Mar 7, 2025)

By Todd Harrison, J.D.

After a state employment commission found Amazon’s Flex drivers were employees for unemployment compensation purposes, Amazon changed gears, arguing against its original legal strategy.

Upon consideration of the record, briefs, and argument of counsel, the Virginia Supreme Court determined that Amazon had waived its arguments on appeal and affirmed a lower court’s holding that the Amazon’s Flex drivers were employees insofar as unemployment compensation was concerned. Throughout the initial proceedings before the Virginia Employment Commission, Amazon had argued for a class-wide ruling on the classification of all Flex drivers and had also asserted that the evidence was sufficient to make such a ruling. Now, Amazon sought a reversal of the appellate court’s decision, contending that the evidence was insufficient to support a class-wide holding. The court here found Amazon did not address the sufficiency of the evidence and instead alleged constitutional and statutory violations, arguments it had waived (Amazon Logistics, Inc. v. Virginia Employment Commission, No. 230865 (Va. Sup. Ct. Mar. 6, 2025)).

Amazon Flex is an app-based program in which participants sign up as a delivery driver for three-to-four hour time blocks during which they use their own vehicles to complete the delivery of groceries or Amazon packages.

Employees. One Flex driver whose claim for unemployment benefits was denied by the Virginia Employment Commission for insufficient earnings requested a reconsideration and provided proof of his earnings via 1099 forms issued by Amazon. The forms reflected that Amazon had not deducted taxes from the earnings.

After learning of this, the Commission assigned the case to a tax representative to determine Amazon’s tax liability and whether Amazon was required to report the driver’s earnings as wages. The tax representative concluded that the driver and other similarly engaged Flex drivers were Amazon employees.

Commission hearing. Amazon appealed this decision and requested a hearing before the Commission. A special examiner conducted the hearing to determine Amazon’s tax liability. At the time of the hearing, Virginia law incorporated the IRS’s 20-factor test used to determine employment status.

Over the course of the hearing, Amazon contended that the terms of its Flex driver agreement and its app-specific procedures applied equally to all drivers who signed up for the program. The special examiner concluded that Amazon exerted control over its Flex drivers and the services provided by the driver who had requested reconsideration constituted employment under state law. Amazon was ordered to pay unemployment payroll taxes for all Flex drivers who were misclassified as independent contractors.

Appeals. Amazon appealed to the circuit court, which affirmed the Commission’s decision. A unanimous panel of the Court of Appeals affirmed the circuit court’s judgment.

At the Court of Appeals, Amazon asserted a new argument—that the decision must be vacated as to any Flex drivers who enrolled in the program after July 1, 2020, because the relevant state statute was amended to no longer include the IRS’s 20-factor test. The appellate court found Amazon waived this argument by failing to fully develop it in its brief. This appeal to the state high court followed.

Sufficient or insufficient? Amazon’s sole assignment of error asserted that the administrative record was insufficient to support an employment classification holding that applied to all Flex drivers. Its brief, on the other hand, argued everything but a lack of sufficient evidence, said the court.

At oral argument, Amazon clarified that its appeal, and its assignment of error, centered on sufficiency grounds—that is, the record was insufficient to support an employment classification holding for the entire “class” of Flex drivers. However, rather than supporting a sufficiency argument, Amazon’s brief listed three ways that the Commission allegedly exceeded its prescribed statutory powers.

“At bottom, Amazon’s allegations against the Commission are unrelated to the claims of insufficient evidence,” said the court. Amazon did not argue at any point how the evidence presented at the hearing was insufficient to support the Commission’s decision and instead centered its position on federal due process rights guaranteed under federal class action law, not the sufficiency of evidence under Virginia law. Despite Amazon’s efforts, its arguments were simply not properly before the court.

Approbated and reprobated. In addition, the court found that Amazon’s arguments succumbed to the approbate-reprobate doctrine and were therefore waived.

Amazon not only participated in the process outlined by state statute, it affirmatively sought a class-wide ruling from the Commission and argued that the evidence would support such a ruling. The Commission agreed that a class-wide ruling was appropriate, ultimately finding that all Flex drivers were employees. After this loss, Amazon attempted to pivot away from this strategy, now arguing that the record was insufficient to support a ruling that applies to all Flex drivers and that it had only ever sought a limited decision for the single driver who had requested a reconsideration.

“Such a contradictory shift in position to mitigate self-inflicted wounds violates the approbate-reprobate doctrine,” said the court. As such, the court found that Amazon had waived these arguments.

Ends of justice exception. Finally, Amazon argued that the court should reach the merits of this case by invoking the ends of justice exception. However, the court explained that because Amazon asserted arguments that failed to support the assignment of error and approbated and reprobated its position, it was precluded from applying the exception to reach the merits of Amazon’s assignment of error.

The case is No. 230865.

Judge: Per curiam.

Attorneys: Stephanie Schuster (Morgan, Lewis & Bockius) for Amazon Logistics, Inc. Jason S. Miyares, Office of the Attorney General of Virginia, for Virginia Employment Commission.

Companies: Amazon Logistics, Inc.

Cases: Procedure CoverageLiability EmployeeStatus StateLawClaims VirginiaNews