Local delivery company to lay off 55 employees after Amazon cancels contract

Denise G. Callahan, Journal-News, Hamilton, Ohio
·3 min read

Sep. 27—WEST CHESTER TWP. — Amazon has cancelled a contract with one of its delivery company franchisees, forcing the layoff of 55 employees who operated out of the new distribution center on Allen Road in West Chester Twp.

Second Samuel Transport Inc. sent a Worker Adjustment and Retraining Notification (WARN) Act letter to the Ohio Department of Job and Family Services on Sept. 8 notifying of the imminent layoff.

"Please be informed that on September 8, 2022, Second Samuel Transport Inc., a DSP whose sole business is to provide delivery services for Amazon, was informed by Amazon that they will not be renewing our contract thereby causing us to lay off all employees and cease business not later than November 8, 2022. Second Samuel Transport Inc. employs 365 employees in 4 states," the letter reads.

The company's Director of Human Resources Eric Crytzer told the Journal-News he could not discuss the layoffs, but in the letter explained why they could not be more precise about the layoff dates.

"Because Amazon completely controls route assignments and will ramp us down at their prerogative, we are unable to provide exact dates any better than this," Crytzer wrote.

In 2018, Amazon started a program offering entrepreneurs an opportunity to become delivery service partners (DSP) with the mega marketplace. With an investment of $10,000 they were promised annual profits of $75,000 to $300,000.

Second Samuel Transport has been operating out of the new 145,000-square foot "last mile" Amazon distribution center that opened for business last September at the corner of Allen and Cincinnati Dayton roads. The delivery station where employees sort packages and load vehicles will not be impacted by this action.

Andre Woodson, a spokesman for Amazon told the Journal-News, he could not comment on the contract termination or a class action lawsuit that has been filed by other former delivery partners. In December he said they had hired hundreds of employees at the "state-of-the-art" delivery station.

A class action lawsuit representing about 2,500 DSPs was filed in April in the federal district court in Washington state. The lawsuit claims Amazon Logistics, Inc. makes it nearly impossible for the companies to operate successfully and "prematurely and wrongfully terminated" the plaintiffs without good cause.

"Amazon is among the world's largest companies and dominates e-commerce in the United States. With over 300 million active users, Amazon, as of 2021, controlled more than 40% of the U.S. e-commerce market share and measures quarterly profits in billions of dollars," the lawsuit reads.

"The typical DSP has a fleet of approximately 20 — 40 Amazon-branded vans. As of December 2021, approximately 2,500 DSPs were part of Amazon's DSP Program. The purpose of the DSP Program is to shield Amazon from its responsibilities to delivery drivers and the public. Amazon, by and through ALI, exercises near complete control over the DSPs but fails to provide the required safeguards under Washington's Franchise Investment Protection Act."

The lawsuit was dismissed on Friday because Amazon convinced the federal judge arbitration is required under the terms of the DSP agreement. The motion for arbitration also states Amazon was well within its rights not to renew its contract with the lead plaintiff in the class action.

"Under well-settled law, this case is subject to arbitration, not litigation in this Court. Each of the Plaintiffs entered into a Delivery Service Partner Program Agreement ("Agreement") with Defendant Amazon Logistics, Inc.," the motion for arbitration reads. "The Agreement mandates that the parties must resolve any disputes arising out of the Agreement through arbitration. Ignoring the Agreement and its arbitration requirement, Plaintiffs now seek to pursue a class action lawsuit against Amazon in the wrong forum."