Court divided on N.Y.’s power to sue Amazon over COVID workplace policies

Betty Q. Hixson

Staten Island Amazon workers protest in Times Square as they demand union rights, in New York City, U.S., December 22, 2021. REUTERS/Ahmed Gaber

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  • Amazon seeks to block state’s lawsuit over worker retaliation
  • Judges divided over whether federal law trumps state’s claims
  • State AG appealing ruling that dismissed its case

(Reuters) – A U.S. appeals court on Tuesday wrestled with whether federal labor law bars a lawsuit by the New York attorney general’s office accusing Inc of violating a state law by failing to protect workers at a Staten Island warehouse from COVID-19.

The preemption question is crucial to Amazon’s bid to revive its own separate lawsuit seeking to block the AG’s office from probing the company’s workplace safety policies, which came before a three-judge panel of the 2nd U.S. Circuit Court of Appeals on Tuesday.

A federal judge in Brooklyn last year dismissed Amazon’s lawsuit, saying it would interfere with the AG’s case that was proceeding in state court. The state claims that Amazon unlawfully retaliated against two workers who protested its alleged failure to implement COVID-19 safety policies.

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Amazon in its appeal says that the alleged conduct is regulated by the federal National Labor Relations Act, which protects workers’ rights to engage in “protected concerted activity,” and the claims can only be heard by the National Labor Relations Board and not in a state court.

A New York state appeals court earlier this month agreed that the AG’s lawsuit was preempted by federal labor law and dismissed it. The state is appealing to New York’s highest court, the Court of Appeals.

On Tuesday, the 2nd Circuit panel focused on whether the AG’s claims, which allege violations of a state whistleblower law, are similar enough to claims typically brought under federal labor law to be preempted.

Circuit Judge Beth Robinson sounded skeptical while questioning Amazon’s lawyer, Jason Schwartz of Gibson Dunn & Crutcher.

“The [state] law doesn’t care whether you did it alone or with other people. In the NLRB context, you care about an exercise of concerted activity,” Robinson said. “Aren’t those two distinct sets of things that happen to overlap?”

But later on, Circuit Judge Steven Menashi seemed to agree with Amazon’s view, saying the AG was merely placing different labels on the same alleged conduct.

“[Amazon] can retaliate against concerted activity because they’re outraged that the concerted activity revealed state law violations,” Menashi said. “The NLRB would still say that’s liability under the NLRA, right?”

New York Assistant Solicitor General Ester Murdukhayeva, who argued for the state, told Menashi that despite the similarities between the cases, each would require different factual findings to prove liability.

Reuters listened to a livestream of the arguments.

The 2nd Circuit panel also grappled with whether the dismissal of the AG’s case by the state court rendered Amazon’s appeal moot. The judges seemed to conclude that the appeal was still live because of the AG’s attempt to revive its lawsuit in state court.

The panel also included Circuit Judge Pierre Leval, who said little during the hour-long arguments.

The case is Inc v. Attorney General Letitia James, 2nd U.S. Circuit Court of Appeals, No. 21-2007.

For Amazon: Jason Schwartz of Gibson Dunn & Crutcher

For the Attorney General: Assistant Solicitor General Ester Murdukhayeva

Read more:

Amazon seeks to revive bid to block NY lawsuit over COVID-19 policies

Amazon loses bid to stop New York from probing COVID-19 standards wins dismissal of NY attorney general lawsuit over worker safety

New York accuses Amazon of backsliding over worker safety, seeks monitor

U.S. labor board claims Amazon illegally fired warehouse worker

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Our Standards: The Thomson Reuters Trust Principles.

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