Amazon faces class action for work-from-home costs in California. What does the case mean for you?

Amazon’s logo suggests that it sells products from proverbial A to Z, with a smiley face underneath, but that grin has turned to a frown with a recent California court case.

Engineer David Williams has filed a class-action lawsuit against the e-commerce titan over reimbursements for working from home during the COVID-19 pandemic. A judge has just allowed the case to proceed despite objections from Amazon. The proceeding holds interesting implications for employers across the country, but the effects won’t be immediate because Williams has sued under the California labor code.

Here are four quick questions and answers about the case.

What does Williams want?

Daniel Wiessner of Reuters laid out the claims back in March, when the 2021 case was expanded into a class action covering all Amazon employees in the state.

Williams said that “he and other workers used their personal phones and home internet and electricity to work remotely and that the company flouted a state law requiring reimbursements for work-related expenses.”

A unique California law allows employees to sue companies on behalf of the state – it’s called the “Private Attorney General Act” – and divide a quarter of the penalties among themselves. Those claims also can’t be sent to arbitration, according to the Reuters report.

The total figures involved could be substantial. Katyanna Quach of The Register writes that the case applies to “over 4,000 workers employed in California across 12 locations, [and Williams is] arguing these costs will range from $50 to $100 per month during the time they were told to stay away from corporate campuses as the coronavirus spread.”

What did the judge just rule?

One might expect that Amazon wouldn’t agree with these claims. And it doesn’t. 

The Bezos-led behemoth asked U.S. District Judge Vince Chhabria to dismiss the case, making an interesting argument. Because the state government instituted a lockdown requiring remote work, the company said, it wasn’t responsible for reimbursing workers during that time.

Chhbabria didn’t agree. “Even if true, that does not absolve Amazon of liability,” he wrote. “What matters is whether Williams incurred those expenses ‘in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.’”

In short, the case against Amazon can continue.

What comes next?

Both Williams and Amazon have work to do. That suggests the case will rumble along for some time to come.

“Chhabaria did grant Amazon's request to dismiss the engineer's claims that it violated California's laws alleging ‘unfair business practices,’” Quach writes, “but gave Williams's legal team 14 days to file an amended complaint.”

For its part, the company will have to decide whether fighting the case is worth its time and effort. While millions of dollars are potentially at stake, they aren’t that many millions of dollars. Williams’ suit alleges “more than $5 million in controversy.” 

A few hours of a single Prime Day should take care of that. On the other hand, the company may be eager not to set an example of giving in quite so quickly to a labor claim.

How will this affect me?

In the most basic sense, this shouldn’t affect operations in any other states.

California’s law includes specific language that makes this very much an open case: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer."

Don’t have this law? A case like this shouldn’t be your problem. On the other hand, as Suzanne Lucas writes for Inc., “what happens in California tends to spread across the nation. If the engineer wins, you may see this concept spreading across states.”

That could be a negative outcome for workers, she writes. Given that employers already pay for internet and electricity costs at their office buildings, they have little incentive to offer remote work and cover duplicate expenses for those working from home. What’s more, the costs workers save from avoiding a commute would likely more than cover the added expenses at issue in this case.

Lucas ends her piece – and this one – with wise advice overall. “Be careful about how you treat your employees and how you approach work from home. Even if Amazon wins here, the court expenses are tremendous. Amazon has the cash to fight it; smaller businesses won't.”