UPDATE 1-Washington DC sues Amazon over withheld delivery driver tips

(Adds no immediate Amazon comment, background, byline)

By David Shepardson

WASHINGTON, Dec 7 (Reuters) - The District of Columbia attorney general's office on Wednesday sued Amazon.com Inc and its Amazon Logistics subsidiary alleging the biggest online retailer had withheld tips from delivery drivers.

Washington Attorney General Karl Racine said the company "tricked consumers into thinking they were increasing drivers' compensation when Amazon was actually diverting tips to reduce its own labor costs and increase profits" through its Amazon Flex service.

Amazon Flex drivers use their own vehicles to deliver goods and groceries ordered through programs like Prime Now and Amazon Fresh. The FTC alleged the company kept drivers' tips over a 2-1/2 year period and stopped the practice after learning of the FTC investigation in 2019, the FTC said in 2021.

The lawsuit, filed in the Superior Court for the District of Columbia, seeks civil penalties for every violation and a court order to bar Amazon from re-engaging in the practice.

Last year under a settlement with the U.S. Federal Trade Commission, Amazon paid $61.7 million to more than 140,000 drivers.

Amazon has "thus far escaped appropriate accountability, including any civil penalties, for consumer harm," Racine said in a statement.

"When a company is caught stealing from its workers, it is not enough for the company to repay the amount stolen. Stealing from workers is theft, and significant penalties are necessary to strongly disincentivize this unlawful conduct."

Amazon did not immediately provide a comment.

In 2021 the company disagreed that the way it reported pay to drivers was unclear. "We added additional clarity in 2019 and are pleased to put this matter behind us," an Amazon spokeswoman said at the time. (Reporting by David Shepardson; Editing by Richard Chang)