More Accountability is Needed for Amazon

More accountability is needed for Amazon

 

This week’s article will focus on a legal battle my firm is currently engaged in with Amazon. On Nov. 28, 2015, our client purchased, through Amazon, a hoverboard for her son for Christmas. The hoverboard was manufactured by a Chinese company, TurnUpUp. On Dec. 16, 2015, the hoverboard arrived. The shipping label said that it had been shipped by Forrinix Technology, a company in Alhambra, California. The hoverboard was opened on Christmas and enjoyed throughout the holiday. On New Year’s Eve, after a day of play, the hoverboard was plugged in to charge overnight. When the mother heard a noise coming from her son’s bedroom and went to investigate, she saw that the hoverboard was burning intensely like a firework, and the bed and bedroom were on fire. During the fire, our client suffered severe burns, and the bedroom sustained heavy fire damage. The cause of the fire was determined to be exploding lithium ion batteries.

Unbeknownst to our client and the rest of the world, Amazon had knowledge of a rash of hoverboard fires. Amazon had sold over 400,000 hoverboards in the weeks leading up to Christmas. It had over 60,000 separate listings for hoverboards at the peak of the season. Amazon had been receiving reports of fires associated with hoverboards around the world. According to testimony I obtained during a deposition of the head of Amazon’s Product Safety and Recalls Team, Mr. Jones, by mid-November 2015, Amazon was “monitoring” hoverboard fire issues, reviewing cases from as far back as January 2014. As Christmas approached, Amazon was in almost daily contact with the United States Consumer Products Safety Commission (CPSC) passing along reports of fires that Amazon had received from its customers.

Indeed, the CPSC had asked Amazon to monitor and report all hoverboard fires as Amazon was the largest single seller of these products in the U.S. and Amazon could directly communicate with purchasers. By Nov. 20, 2015, Amazon was aware that Costco, concerned for the safety of its customers, had pulled hoverboards from their shelves and stopped selling them to the public. Because of concern over fires, on Dec. 4, 2010, Amazon had pulled all hoverboard listings from its United Kingdom sales platform but kept selling them in the U.S. Finally, on Dec. 10, 2015, Doug Herrington, head of Amazon’s North American retail business, made the decision to remove all third-party sellers’ hoverboards from its website because of complaints “of hoverboards/batteries catching fire or exploding, or of sparking battery charges for hoverboards,” and because of concerns that the reports “might be indicative of safety issues of these products across Chinese manufacturing.” Over 60,000 separate listings were taken down from Amazon’s “marketplace.”

Although Amazon stopped selling hoverboards, Amazon neither stopped delivery of those in transit, nor did our client receive any notice from Amazon about the potential for fire.

Under California law, anyone or any enterprise in the “chain of distribution” between the manufacturer and the retailer can be held liable for injuries caused by the product. This makes everybody who is involved in the sale of the product is responsible for making sure the products are safe, which is a benefit to every consumer. They can inspect them, reject them, research them and otherwise determine if they are suitable for sale.

Additionally, they are in the best position to purchase insurance, which can cover injuries caused to consumer and at a fraction the cost of that among the many products they sell, thereby increasing the price only slightly while incorporating the true costs of the product into its sales price. If the true costs, including insurance, make the product too expensive, then application of free market principles should lead to it being discontinued from sale. This increases the cost a few pennies spread across all who use the product, which is fairer than having one injured person bear all the costs and losses associated with the product when they are injured. That is, in effect, a subsidy. (OK, I am revealing what I learned in one of my degrees involving law and economics.)

Amazon claims it is not in the chain of distribution: it is just a new form of classified advertising. This is BS. Amazon is the largest single seller of products. In its own documentation, Amazon calls itself a retailer. It gets paid a posting fee for each item listed. Amazon completely controls the content of each posting and has the right to edit and delete it. Buyers and sellers must communicate only through Amazon, and they cannot contact each other directly. The financial transaction is handled through Amazon. Amazon takes a percentage of every product sold, including shipping. Any product difficulties or complaints must go through Amazon. If a product is returned, Amazon charges the seller a return fee. Amazon offers an A-Z guaranty saying it will make the customer satisfied, including a refund, even if the manufacturer goes out of business. And now Amazon has fulfillment centers where it keeps stock on hand to satisfy orders.

Amazon has changed the landscape of our world, causing people to lose retail jobs by the hundreds of thousands. Amazon is one of the most valuable companies in the world. It must step up and be responsible corporate citizens instead of just not caring what it sells and if the consumer gets hurt.

To change this, I am working with the Consumer Attorneys of California to get a law passed, which would make Amazon just as responsible as any other retailer when the products it sells cause harm. It’s part of what I think a lawyer representing injured people should do: protect their rights and fight against corporate greed.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions and topics for future articles to help@dolanlawfirm.com.

We serve clients across the San Francisco Bay Area and California from our offices in San Francisco, Oakland, and Los Angeles. Our work is no recovery, no fee or also referred to as contingency-based. That means we collect no fee unless we obtain money for your damages and injuries.

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Are Uber drivers employees?

Today’s question comes from Jennifer T. in Diamond Heights who asks:

Q: “I drive for Uber, Lyft, and DoorDash. I have filed my taxes as an independent contractor as that’s what I was told to do by these companies. I heard that there is a new law which will provide me with protections that usually have only been provided to employees. What am I, an independent contractor or employee? What new protections do I have now?”

A: The new law that you have heard about, AB 5, amends Labor Code Section 3351, adds a new Labor Code Section 2750.3, and amends sections 606.5 and 621 of the Unemployment Insurance Code, to ensure the workers who are currently exploited by being misclassified as independent contractors are instead recognized as employees who have basic rights and protections. The legislative history produced during its enactment declared that when workers are unfairly misclassified as independent contractors: (1) these workers are harmed by the loss of significant workplace protections such as they deserve under the law, including a minimum wage, workers’ compensation if they are injured on the job, unemployment insurance, paid sick leave, and paid family leave; (2) it is unfair to other employers who must compete with companies that misclassify; and (3) there is harm to the state of California in the form of lost revenue from these companies avoiding obligations such as payroll taxes and premiums required under workers’ compensation, Social Security, unemployment, and disability insurance programs.

The new Labor Code Section 2750.3(a)(1) remedies these injustices by providing that a person providing labor or services for remuneration (money) shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied: (A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the terms of the contract for the performance of the work and in fact; (B) the person performs work that is outside the usual course of the hiring entity’s business; (C) the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

The amended Labor Code Section 3351 provides that the law applies to every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed, and specifically includes: non-resident immigrants and those without proper documentation; minors; elected and appointed paid public officers; incarcerated persons engaged in vocational rehabilitation for pay; truck drivers; and tutors. The law also exempts a long list of occupations including, but not limited to: physicians and surgeons; dentists; podiatrists; psychologists; veterinarians; licensed lawyers, architects, engineers, private investigators, accountants, barbers, estheticians, and cosmetologists; registered security brokers and advisors; real estate salespeople; live-in nannies; direct sales people; and commercial fisherman. The law also does not apply to any workers who can negotiate for their rate of pay, control their hours, and market themselves to multiple businesses, such as: travel agents; outsourced marketing consultants; HR administrators; graphic artists; design professionals; grant writers; fine artists; tax preparers; some still photographers; photojournalists; freelance writers who only do occasional work; repossession agents; and construction trucking service providers.

You, as a Lyft, Uber, and DoorDash driver, are squarely protected under this law and must now receive the benefits other employees would receive, including earning at least the minimum wage. In its perpetual refusal to follow the law, Uber has indicated that it will not comply with AB 5 and filed a federal lawsuit at the end of last year claiming the law to be unconstitutional. Notably, it did not file in a California State Court, which it predicts would be a futile exercise because AB 5 was based on a groundbreaking California Supreme Court decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (“Dynamex”), which established the new test for determining whether a particular set of job circumstances make someone an employee or independent contractor. Uber hopes the conservative U.S. Supreme Court will be more receptive to their pleas. Fortunately, this will likely be an uphill battle as the Supreme Court has routinely upheld a state’s rights to legislate its own citizens’ working conditions.

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Pause and Think Before You Hit Record: The Implications of Secret Recordings in the Workplace

By: Christopher Dolan and Vanessa Deniston

 

This week’s question comes from Edgar M…

Q: “I work for a large corporation with offices nationwide. I was recently switched to a new department, and already, I have been having problems with my new direct supervisor. He regularly makes racially charged comments around me, which I find offensive. I have told him to stop, but that has only made things worse. I have tried complaining to my HR representative about this behavior, but she is good friends with my direct supervisor and doesn’t believe my reports. I feel the only way I will be taken seriously is if I am somehow able to record my supervisor’s racist comments as proof. Can I do this if no one will take me seriously?”

A: Thank you for your question, Edgar. Certainly, the impulse to capture an injustice on tape is a hard impulse to ignore, especially when those around you are turning a blind eye to or claiming it isn’t happening. Secretly recording someone without their knowledge and consent, however, is a criminal offense under state and federal law with serious consequences.

The federal Wiretap Act of 1968 (18 U.S.C. § 2511) provides it is illegal to secretly record any oral, telephonic, or electronic communication that the communicator would reasonably expect to be private. The California Penal Code § 632(a), enacted under the California Invasion of Privacy Act of 1967, makes it illegal for any person to intentionally and without the consent of all parties to a communication use a recording device to record a confidential communication, whether or not the conversation occurs in person or through some other medium, such as over the phone. Such an offense may be punished by a fine of up to $2,500 per violation and/or by a term of imprisonment of up to one year. California is one of a handful of states with a “two-party [or “all-party”] consent” law, meaning the consent of every single party to the conversation is required before a person can legally record a confidential conversation. In other words, if nine out of ten board members agree you can record a private board meeting, that is one too few.

These criminal consequences will outweigh any potential benefit you may derive from capturing such evidence on tape, especially because in nearly all cases, secret recordings are not admissible evidence in court. Penal Code § 632(d) provides that unless you are trying to prove a violation of section 632 itself, any evidence obtained as a result of recording a confidential communication is not admissible in any judicial, administrative, legislative, or other proceeding. In short, if you have a secret recording of your supervisor spouting racist inappropriate comments that you feel is a smoking gun for your case, it will likely be excluded long before a jury can ever hear about it.

The grey area lies in whether there is a reasonable expectation of privacy in the space where the recording is made. The answer to this question depends on the recording’s location and context. For instance, there is a big difference between recording a conversation in a busy airport terminal and recording a private disciplinary meeting between you, your supervisor, and a Human Resources representative in an office behind a closed door. This is because it is reasonable to expect that a conversation in public airport terminal to be overheard by people passing by. The same is not true for the private HR meeting. 

Context may be nuanced, however. There may be reasonable expectation of privacy in that same airport terminal at 4:00am on arrival of a red-eye flight if the conversation occurs in an empty corner of the terminal where there are no staff or people in sight. Likewise, a conversation at top volume in the doorway of your supervisor’s office adjacent to an open floor plan in earshot of the entire office. There is quite a different expectation of privacy in this context, as opposed to the private HR meeting.

Even if you believe, however, that you are in an environment where there is no reasonable expectation of privacy, there are many variables to be considered and it’s likely not worth the risk. If you believe your supervisor is doing or saying something inappropriate, rather than record them, make a written complaint to your Human Resources department, quoting the specific language you heard or describing the conduct you observed and indicating it made you feel uncomfortable. By creating a written record with your employer, you protect yourself far more than you do by making a recording that could potentially expose you to criminal liability.  Always contact an employment attorney to assist you in taking legal, effective steps towards addressing a difficult workplace issue.

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