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Amazon workplace investigation is through but court battles rage on

Accusing the New York attorney general of going after it in bad faith, Amazon wants its claims against the Democrat reinstated.

MANHATTAN (CN) — Amazon’s decision to discipline and fire employees who complained about lax safety measures in the early days of the pandemic spurred a state investigation and tangle of ongoing legal proceedings in New York. The e-commerce giant fought its latest battle Tuesday in front of the Second Circuit. 

At issue was a lawsuit Amazon filed in response to an investigation by New York Attorney General Letitia James into whether the company failed to protect workers and then retaliated against those who blew the whistle. Amazon claimed that James was overstepping her authority since workplace safety is tightly regulated on the federal level. U.S. District Judge Brian Cogan disagreed that the probe was federally preempted, however, ruling that the state is authorized enforce its own labor laws and health and safety regulations. 

Arguing for Amazon Tuesday, Gibson Dunn attorney Jason Schwartz pushed the three-judge appeals panel to reverse. “This is about as clear a case of NLRB preemption as can be,” he said in court. 

As to Cogan's finding that James did not act in bad faith, Schwartz recalled the attorney general's quick reaction to Amazon's firing of one of the disciplined employees, Christian Smalls. James called the action “shameful and disgraceful.” 

“She announced from the beginning a pre-baked conclusion that Amazon was guilty, and then designed an investigation to get to that result,” said Schwartz. 

Schwartz urged the panel to rule Amazon exempt from the Younger abstention — case law that says federal courts should abstain from ruling on cases pending in state court — because the civil suit was not “akin to a criminal proceeding” since it didn’t seek penalties against Amazon. 

U.S. Circuit Judge Steven Menashi and Beth Robinson asked how penalties are defined differently from the injunctive relief, compensatory damages and equitable disgorgement the state has sought. 

“An individual couldn’t bring this kind of lawsuit,” the Trump-appointed Menashi noted. 

Less than a week after Amazon filed its suit in Brooklyn federal court, the attorney general’s office in February 2021 filed state worker-safety and retaliation claims resulting from its investigation. That matter has now been dismissed by a state appeals court, which ruled its safety claims moot since New York has since changed its Covid-19 guidance. 

Putting it at odds with Judge Cogan’s ruling, the state appeals panel found that retaliation should be handled under federal law. As the state ruling noted, the National Labor Relations Board is proceeding with a similar lawsuit in the Eastern District of New York.

The attorney general plans to ask for a rehearing. It addressed the ruling in a letter in the Second Circuit, saying it was reviewing the decision. “However, the decision confirms that New York state courts are an adequate forum for Amazon to obtain judicial review of its preemption defenses,” the letter states. 

During Tuesday’s hearing, attorney Ester Murdukhayeva said Amazon hadn’t proved it can get out of Younger, noting that that preemption claims come with an “extremely high bar.” 

While the state lawsuit continues, Schwartz asked the Second Circuit to hold its own suit in abeyance. He noted that, if the attorney general loses on review or gives up its suit, Amazon’s federal claims would be narrowed or perhaps moot. 

Rounding out the panel on Tuesday was U.S. Circuit Judge Pierre Leval, a Clinton appointee. 

The attorney general’s office declined to comment on the proceedings. Amazon did not immediately respond to a request. 

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