Washington, D.C.'s chief prosecutor is suing Amazon over accusations the retailer deceived customers who tipped drivers and believed they would receive total compensation.
The office of D.C. Attorney General Karl Racine announced it would pursue the lawsuit on Wednesday, over one year after the Federal Trade Commission forced Amazon to return $61.7 million in driver tips it allegedly skimmed from 2016 to 2019.
"Workers in the District of Columbia and throughout our country are too often taken advantage of and not paid their hard-earned wages," Racine stated. "What's more, consumers need to know where their tips are going.
"This suit is about providing workers the tips they are owed and telling consumers the truth. Amazon, one of the world's wealthiest companies, certainly does not need to take tips that belong to workers. Amazon can and should do better."
In the original FTC complaint, the agency claimed Amazon overpromised compensation to drivers in its Flex program, which was launched in 2015 to allow ordinary people to deliver packages on behalf of the retailer.
Amazon allegedly guaranteed that drivers would receive all their own tip money and "earn an hourly rate of $18 to $25." In addition, the complaint stated that the company told customers that "100% of your tips are passed on to your courier."
However, regulators alleged that in 2016 Amazon switched to a variable-pay system without disclosing to employees, thus allowing the retailer to advertise higher salaries based on estimated tip amounts.
"While Amazon later paid single-damages restitution for this conduct as part of a settlement," multiple FTC commissioners argued Amazon's conduct "would have warranted more than just restitution if the agency possessed [the] authority to award penalties," Racine's lawsuit stated.
The retailer "has thus far escaped any other consequences," the suit added.
Amazon has continuously denied any wrongdoing stemming from the FTC complaint.
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