According to Zhitong Finance, the U.S. federal government is working on a settlement with Amazon (AMZN.US) regarding a years-long case involving a group of delivery drivers, thereby avoiding a potentially landmark ruling that could determine Amazon as the de facto employer of certain workers it has long claimed were not its employees.

Since 2024, the National Labor Relations Board (NLRB) has been suing Amazon, accusing it of violating the rights of a group of drivers who were employed by one of its former ‘Delivery Service Partners’—a contractor named Battle-Tested Strategies (BTS), based in Palmdale, California.

In this case, the NLRB’s General Counsel argued that Amazon was a ‘joint employer’ of these drivers, meaning Amazon exercised sufficient control over them and thus bore responsibility for their treatment. It also had an obligation to engage in collective bargaining after they joined the Teamsters union. The government further accused Amazon of illegally refusing to negotiate with the union.

At the start of the trial overseen by an NLRB judge in Los Angeles last September, the government contended that Amazon exerted ‘overwhelming control’ over its subcontracted drivers and that contractors paying these drivers were essentially ‘captive delivery companies created under Amazon’s direction and assistance.’ Amazon denied any wrongdoing and refused to comply with the government’s subpoena regarding whether it was a joint employer, calling it a ‘fishing expedition’ and accusing the labor board of pursuing the case improperly due to ulterior motives.

The testimonial phase of the trial, originally scheduled to resume on April 13, has now been suspended. Last Sunday, a lawyer from the NLRB General Counsel submitted a proposed settlement agreement to the presiding judge to terminate the case. According to a copy of the settlement agreement seen, Amazon will pay up to 84 workers employed by BTS two weeks’ worth of wages without admitting any wrongdoing or being deemed a joint employer.

If the settlement is approved, it would resolve one of the agency’s most significant cases against Amazon, which could have led to a ruling by an agency judge, NLRB commissioners in Washington, and potentially a federal appeals court judge, determining Amazon as a joint employer of drivers working for one of its Delivery Service Partners. Currently, Amazon contracts with thousands of such partners, managing hundreds of thousands of delivery workers.

Neither Amazon nor the NLRB provided immediate comment last Sunday night.

This shift in the agency’s stance occurred after Donald Trump reshaped it. Trump appointed Crystal Kelli, a partner at Morgan, Lewis & Bockius LLP—a law firm whose clients include Amazon—as the NLRB’s General Counsel.

In January this year, Kelli assumed the role of the NLRB’s chief prosecutor, a position with broad authority over which cases the agency pursues and how. In a February interview, Kelli stated that since she had represented Amazon more than a year ago and Morgan, Lewis did not represent Amazon in the Palmdale case, she did not need to recuse herself. She described recusal requirements as ‘case-specific.’