The basics:

• New Jersey sues Amazon over its Delivery Service Partner program
• State alleges Amazon suppresses driver wages, limits competition
• Lawsuit claims Amazon retaliated against unionization efforts
• Amazon denies the allegations, plans to defend the case

New Jersey is suing Amazon over allegations the e-commerce giant is using its market power to suppress wages and limit opportunities for thousands of delivery drivers in the state.

The state filed the lawsuit Aug. 4 in U.S. District Court in Newark. It claims Amazon unlawfully restricts competition for drivers in its Delivery Service Partner program by discouraging or preventing third-party companies from hiring one another’s employees.

The state also alleges that Amazon retaliates against drivers who try to organize, as well as uses its dominance over the delivery network to keep wages low and working conditions poor.

Launched in 2018, the DSP program relies on a network of thousands of small contracted companies to handle last-mile delivery of packages from Amazon’s warehouses to customers’ doorsteps. The state accused Amazon of controlling key aspects of that initiative, such as route assignments, driver performance, hiring practices, uniforms, software and delivery vehicles.

According to the complaint, Amazon also monitored drivers through artificial intelligence, in-vehicle cameras and other technology.

Additionally, the company responded to unionization efforts by intimidating workers and reallocating delivery routes. In one case, Amazon ended a delivery partner’s operations after organizing activity, causing numerous drivers to lose their jobs, the state alleges.

A monopsony first

According to New Jersey Attorney General Jennifer Davenport, the case is the first brought by a state alleging a company of illegally maintaining a monopsony, a market in which a dominant buyer controls labor conditions.

New Jersey seeks monetary compensation as well as a court order to stop the alleged conduct.

Amazon keeps wages low and imposes harsh working conditions on thousands of New Jersey drivers because they are stifling competition for their labor.

It’s illegal and we will see them in court.https://t.co/FTTAuQLeP6 pic.twitter.com/Nwc9OgQk3B

— Attorney General Jennifer Davenport (@NewJerseyOAG) August 4, 2026

Davenport said, “My office is acting to stand up for thousands of New Jersey delivery drivers who are being exploited every day by one of the world’s biggest, richest corporations. As our complaint alleges, Amazon built a company worth trillions while subjecting drivers in its delivery network to artificially low pay and punishing working conditions thanks to its overwhelming power in the labor market. I will continue to fight monopolies and the devasting effects they have on our residents.”

‘Not grounded in fact’

In a statement to NJBIZ, Amazon said, “This complaint is not grounded in fact. The Attorney General’s characterization of the DSP Program and the claims about working conditions are just wrong. The truth is, DSPs are independent business owners who make their own decisions about hiring, fleet management, and capacity planning — and they choose whether to work with other companies besides Amazon.

“Had the Attorney General bothered to look at the facts, they would have also seen that the vast majority of routes are finished on-time or early — built on real-world data accounting for stop complexity, traffic, and geography. DSPs manage their drivers’ workday and route execution, and DSP employees are free to choose their employer and associate with who they want, full stop.”

The truth is, [Delivery Service Partners] are independent business owners who make their own decisions about hiring, fleet management, and capacity planning…
– Amazon

The company added, “Despite our cooperation, the Attorney General’s office did not raise the central claims in this complaint with us before filing suit. They chose a press conference over a conversation or real effort to understand the truth, but we’re confident the facts will speak for themselves in court.”

New Jersey also has several other lawsuits against Amazon involving competition, workplace discrimination and the classification of delivery drivers.

According to the AG’s office, all three cases are ongoing.