By Jonathan Stempel
NEW YORK (Reuters) -A New York state appeals court on Tuesday dismissed state Attorney General Letitia James' lawsuit accusing Amazon.com Inc (NASDAQ:AMZN) of failing to adequately protect thousands of workers at two New York City facilities against COVID-19.
The Appellate Division in Manhattan said federal law preempted James' claims that Amazon violated state labor law by retaliating against two employees, Christian Smalls and Derrick Palmer, who protested against working conditions.
It said issuing a ruling could also pose a "substantial risk of interference" with the National Labor Relations Board, which is considering essentially the same allegations of retaliation against Amazon, the second-largest U.S. private employer.
The four-judge panel also said James' effort to require Seattle-based Amazon to comply with state COVID-19 workplace guidelines was moot, because the state had withdrawn the guidance that she sought to enforce.
Morgan Rubin, a spokeswoman for James, said the attorney general will review the decision and her legal options.
"Throughout the pandemic, Amazon has failed to provide a safe working environment for New Yorkers," Rubin said. "Attorney General James remains committed to protecting Amazon workers, and all workers, from unfair treatment."
Amazon did not immediately respond to requests for comment.
James sued Amazon in February 2021 over the online retailer's health and safety protocols for workers at its JFK8 fulfillment warehouse in Staten Island and DBK1 delivery center in Queens, both in New York City.
A state trial judge rejected Amazon's bid to dismiss the case in October.
But the appeals court said protests against unsafe working conditions "relate to the workers' participation in concerted activities for the purpose of ... mutual aid or protection," and were protected activity under the National Labor Relations Act.
Amazon fired Smalls for allegedly violating a paid quarantine to lead a March 2020 protest, and gave Palmer a written warning for allegedly violating social distancing rules.
Smalls and Palmer later formed the Amazon Labor Union, which workers at the Staten Island warehouse voted by a 5-4 margin to join, according to results released last month. Turnout was about 58%.
That vote was a major victory for organized labor, which viewed Amazon as a threat to workers because of its practices and reach across many industries.
The case is New York v Amazon.com et al, New York State Supreme Court, Appellate Division, 1st Department, No. 2021-03934.