Appellate Division Holds Attorney General’s COVID-19 Retaliation Claims are Preempted by Federal Law

May 17, 2022

Hannah K. Redmond - Bond, Schoeneck & King

In February 2021, New York State Attorney General, Letitia James, filed a lawsuit against Amazon alleging that the retailer failed to sufficiently prioritize hygiene, sanitation and social distancing at its fulfillment center and delivery station in New York City.¹ The Complaint also alleged that Amazon unlawfully terminated employees at those locations who complained about conditions they perceived to be unsafe.² The Complaint asserted causes of action under various sections of the New York Labor Law (NYLL), including Sections 200, 215 and 740, all of which “relate to the obligations of New York businesses to adequately protect the health and safety of employees and to refrain from discrimination or retaliation against employees who complain about potential NYLL violations.”³

Amazon moved to dismiss the Complaint on the basis that the causes of action asserted were preempted by federal law, namely the Occupational Safety and Health Act (OSH Act) and the National Labor Relations Act (NLRA). Ultimately, the trial court disagreed and denied Amazon’s motion to dismiss, holding that the NYLL § 200 claims were not preempted by the OSH Act and that the NYLL §§ 215 and 740 claims were not preempted by the NLRA.⁴

Amazon appealed the denial of its motion to dismiss and on May 10, 2021 the Appellate Division First Department, one of New York’s intermediate courts of appeal, unanimously reversed the lower court’s decision. Contrary to the court below, the Appellate Division held that the causes of action alleging violations of NYLL §§ 215 and 740 were preempted by federal labor law.⁵ The Appellate Division specifically held that the NLRA preempted the State’s retaliation claims under §§ 215 and 740 given that the alleged retaliation was based on employees’ participation in concerted activities – i.e., opposing working conditions.⁶ As such concerted activities are protected under the NLRA, the Court held that the National Labor Relations Board (NLRB), “and not the states, should serve as the forum for disputes arising out of the conduct.”⁷

Alternatively, the Appellate Division held that even if the conduct underlying the §§ 215 and 740 claims was only “arguably protected” by the NLRA, dismissal on grounds of preemption was still appropriate due to the fact that there is an NLRB charge pending against Amazon which raises similar challenges.⁸ In light of the pending NLRB charge, the First Department declined to find an exemption from preemption on the basis that the probability of inconsistent rulings on the same issue posed too great a risk of interference with the NLRB’s jurisdiction.⁹

Finally, the State’s cause of action under NYLL § 200 was dismissed as moot.¹⁰ Because the NYLL § 200 claim was based on Amazon’s alleged failure to adopt and implement COVID-19 policies consistent with state-issued guidance that was withdrawn during the pendency of this litigation, there was no longer a live controversy with respect to the § 200 claim.¹¹

While the First Department’s decision is not the end of the road for Amazon in light of the case pending before the NLRB, the decision is significant in that it indicates the Court’s hesitancy to hear state law claims when the underlying allegations encroach on matters that are traditionally left to the NLRB for resolution.

If you have any questions about the information presented in this memo, please contact Hannah Redmond, any attorney in our Labor and Employment practice or the attorney at the firm with whom you are regularly in contact.

 

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^{1  James v. Amazon.Com Inc., No. 450362/2021, 2021 WL 4812480, at *4 (N.Y. Sup. Ct. Oct. 12, 2021).
2  Id.
3  Id.
4  James, 2021 WL 4812480.
5  People v. Amazon.com, No. 15693, 2022 WL 1462607, at *1 (1st Dep’t May 10, 2022).
6  Id.
7  Id.
8  Id.
9  Id.
10  Id. at *2.
11  Id.}