e-commerce

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According to a recent decision, employers who want to keep employees on their premises for security checks after they have already clocked out must pay their employees to do so—at least in Pennsylvania.

In 2013, two Amazon.com employees filed a putative class action in the Philadelphia County Court of Common Pleas against their employer, certain of Amazon’s affiliates, and Integrity Staffing Solutions, Inc., seeking compensation under the Pennsylvania Minimum Wage Act (“PMWA”), 43 Pa. Cons. Stat. § 333.101 et seq. for time spent undergoing a mandatory security check after their shifts had already ended. The plaintiffs worked in a warehouse in Pennsylvania where they performed tasks related to fulfilling customer orders placed on Amazon. At the end of their shifts, the plaintiffs were not allowed to immediately leave the premises, as they were required to remain at the warehouse to proceed through a screening process that included walking through a metal detector. If the alarm went off, the worker would be subject to a secondary screening process where a security guard would search the worker’s bags and personal items. The plaintiffs alleged that the entire screening process could take up to twenty minutes, or even more if there were delays.  The defendants did not compensate the workers for any of this time.

In two prior blog posts, we covered how online marketplaces, like Amazon, are being held responsible for defective and counterfeit products sold on their platforms.  In the latest development in this space, California’s Court of Appeal (Second Appellate District) determined that Amazon could be held strictly liable for injuries a consumer suffered from a defective hoverboard she bought from the retailer, even though Amazon neither manufactured nor sold the product.  Loomis v. Amazon.com LLC.

In a recent post, we summarized recent developments in litigation and legislative activity concerning whether online marketplaces may be directly liable for the sale of defective and counterfeit products on their platforms. Now the executive branch has weighed in, with President Trump issuing (on Prime Day, no less) a Memorandum on Stopping Counterfeit Trafficking on E-Commerce Platforms Through Fines and Civil Penalties.

Consumers are doing more and more shopping online. But when a consumer buys a product that is defective or counterfeit, are online marketplaces liable for misconduct by third-party sellers?

E-commerce platforms have generally avoided being treated like their brick-and-mortar counterparts by arguing that they do not actually “sell” goods, but rather provide services (e.g., payment processing, storage, shipping) to third-party sellers, who in turn sell products to consumers. However, recent court decisions and looming legislation may change this dynamic, opening up online marketplaces to product liability and intellectual property claims for products sold by third-parties on their platforms.

The global pandemic has brought about countless changes, including, for many households, increased reliance on online retail and delivery services, such as Amazon.

When consumers sign up for these services or place their orders, they are likely to see a notice regarding terms and conditions, which may include an arbitration agreement pursuant to which the consumer agrees to arbitrate disputes arising from the use of the service, rather than pursue their claims in court. Recent decisions underscore the importance of the terms of these agreements and the challenges consumers may face if they wish to avoid arbitration of disputes with service providers, especially when they continue to rely on those services.

In July 2020, the Pennsylvania Supreme Court agreed to tackle the thorny question of whether Amazon can be held liable for defective products sold by third parties on its website. The Third Circuit offered up the case in June after hearing arguments in February and concluding that it was “unable to predict based on existing case law, if and how the Pennsylvania Supreme Court would apply [the law] to e-commerce businesses like Amazon.” The Pennsylvania Supreme Court agreed to address this matter of first impression and decide whether Amazon faces strict liability for products purchased from third-party vendors when the product “was neither possessed nor owned by” Amazon.

Over the past month, state enforcers have declared a war on price gouging, but some of the most effective enforcers have not been the states. Online platforms and other large retailers have taken extraordinary steps to restrict price gouging, and their monitoring has already led to hundreds of thousands of items pulled from e-commerce websites. With entire countries engaging in social distancing, e-commerce has become de-facto commerce for many, and this dramatic and sudden shift gives online sellers enormous influence on price gouging enforcement.