Non-Exclusivity Provisions in Last-Mile Contractor Agreements

Non-exclusivity provisions in last-mile contractor agreements do two jobs. They support the legal case for independent contractor status and give operators and contractors the flexibility the delivery model needs. A clause protects the relationship only when dispatch, payment, onboarding, and compliance practices preserve the freedom it promises.

Why non-exclusivity provisions are load-bearing contract architecture, not boilerplate

Amazon’s published carrier agreement states that it “does not obligate Carrier to perform any Services unless and until a Work Order is executed and delivered”. It also states that “Amazon may engage the services of third parties that may perform the same or similar services as those provided by Carrier”. These terms separate the agreement to do business from the obligation to perform a particular job. They also preserve Amazon’s ability to use other carriers.

The operator remains free to dispatch other carriers, while the contractor remains free to serve other clients, including competing platforms. A clause that reserves every freedom for the operator but implicitly binds the contractor is not meaningfully non-exclusive. For an operator deploying a 1099 network, that distinction belongs in the contract’s architecture. It helps define whether the contractor is operating a business or simply carrying an independent contractor label.

Entity-level restrictions address a different question. FedEx Ground’s SEC-filed service provider agreement restricts assignment without prior written consent and treats a sale of stock or assets as a transfer of control. Those provisions govern who controls or takes over the contracted business. They should not be confused with restrictions on a contractor’s right to serve other clients. The level at which a restriction operates matters as much as its wording.

How misclassification tests read non-exclusivity — and what they require beyond the contract text

The IRS, state ABC tests, and federal FLSA analysis all look at how work happens in practice, although their tests differ. California’s ABC test under AB 5 is among the strictest. Across these approaches, the freedom to serve other clients supports the independence argument, but it does not settle classification by itself. Fixed schedules or exclusive assignments can tell a different story from the signed contract.

The proposed California class action against Dlivrd Technologies illustrates that gap. The company is the parent of the platform formerly known as Dlivrd, now rebranded as Expedite. The action alleged misclassification despite independent contractor agreements, pointing to real-time app tracking, flat non-negotiable fees, and deactivation for metric failures. The challenge focused on operational control.

A credible independence argument therefore needs room for contractors to make real choices. They must be free in practice to accept or decline work orders, work for other platforms simultaneously, and invoice multiple clients. Business licenses, separate entity status, and contractor-held insurance can support that account, but paperwork cannot make contractors free to run their businesses when they have to stay available. Operators understandably worry that this freedom makes capacity less predictable. The answer lies in pay speed, route incentives, and scheduling flexibility, rather than exclusivity that undermines the classification position.

The current regulatory environment operators are writing these clauses into

Federal policy is moving, but movement is not the same as relief from classification risk. In May 2025, the DOL issued Field Assistance Bulletin 2025-1, instructing investigators to stop applying the 2024 independent contractor rule under the FLSA. On February 26, 2026, the DOL announced a further proposed rule to change how it tests worker classification. A proposal is not a settled replacement standard. Operators still face scrutiny through audits and state-level enforcement regardless of the federal posture.

State exposure runs on its own track. California’s AB 5 still sets strict rules for classification, while many states are spending more on enforcement. California and Massachusetts carry some of the steepest penalties. FedEx’s substantial settlement after misclassifying delivery drivers shows that the cost of an unsuccessful classification position is not merely theoretical.

Court access adds another risk. The U.S. Supreme Court unanimously held in Flowers Foods, Inc. v. Brock that a worker transporting goods on an intrastate leg of an interstate journey can qualify for an exemption from mandatory arbitration. That can apply even when the worker never crosses a state line or interacts with vehicles that do. The underlying suit alleged underpayment under federal and state laws. The ruling matters because an arbitration agreement may not keep a last-mile driver’s wage or classification dispute out of court.

Municipal proposals add a further layer. In New York City, a councilmember is part of the debate over proposed delivery protection legislation. Amazon’s official testimony states that the proposal would prohibit its agreements with more than 40 local small businesses known as Delivery Service Partners. Taken together, federal changes, state enforcement, court access, and local legislation make a well-constructed non-exclusivity clause more important.

What a legally sound non-exclusivity provision must clearly establish

The drafting task begins with reciprocal freedom. A filed Athenex, Inc. agreement expresses the principle directly. It states, “Neither Party shall be obligated to offer any business opportunities or to conduct business exclusively with the other Party by virtue of this Agreement”. The important feature is that neither side owes the other exclusivity simply because the agreement exists. This is a structural requirement for operators to work through with counsel as part of advice on the full relationship.

The agreement must also distinguish access to work from a promise of work. Amazon’s carrier agreement states that “Amazon makes no promises or representations whatsoever as to the amount of business that Carrier can expect”. The contractor’s obligation arises through a particular work order. The drafting and acceptance process must preserve the contractor’s ability to decline an assignment.

The contractor’s freedom to perform similar services for others should be affirmative. Merely omitting a ban leaves more room for dispute than expressly allowing work for competing platforms simultaneously. Even clear language, however, cannot cure dispatch procedures, communication requirements, or performance monitoring that create de facto exclusivity. The agreement needs supporting records, including business licenses, proof of separate entity status, contractor-held insurance, and evidence of work for multiple clients.

Why non-exclusivity also serves as an operational mechanism for both operators and contractors

Non-exclusivity is not simply a legal concession that operations must endure. Non-exclusivity lets operators draw on more contractors to handle spikes in volume without adding headcount. Contractors, in turn, can earn income from more than one platform. That flexibility is part of what attracts them to the model in the first place. Removing it would weaken both the legal argument and the operating proposition.

Amazon’s Delivery Service Partner program illustrates the scale of network-based delivery. The program has drawn billions to support DSPs and their Delivery Associates over eight years. Its use of delivery businesses shows why flexible capacity matters at the network level. But a network of contracted businesses should not be treated as proof that every person making deliveries is an independent contractor. The business-to-business relationship and the worker relationship require separate attention.

The DHL eCommerce–USPS agreement makes the distinction especially clear. DHL eCommerce announced the exclusive agreement between operators for last-mile parcel delivery on May 28, 2026, with an expected value well over $10 billion, describing it as unprecedented in the 25-year relationship. Exclusivity is not one switch controlling the whole delivery chain.

Non-exclusive contractors provide a flexible pool. The operational task is to make assignments attractive enough that contractors choose them when work is available. That shifts attention from controlling access to people toward competing for their participation. It also makes keeping contractors part of compliance as well as a concern for human resources.

How operators retain contractors they cannot legally bind to availability

An operator that keeps non-exclusivity genuine must leave contractors free to choose when they are available. It must win the contractor’s next assignment on operating terms. Pay speed is the most powerful lever in that contest. Contractors working across several platforms can direct their next shift toward the one that pays fastest. Holding funds for multiple days risks buying leftover capacity.

Same Day ACH and instant debit support the pace contractors increasingly expect from platforms. Adoption remains uneven, so these capabilities can still distinguish one operator from another. A payment system that cannot match that pace creates a retention disadvantage even when the underlying delivery work is attractive. A freedom-to-leave clause is particularly persuasive when paired with a slow payment system, though not in the operator’s favour.

If credentialing, insurance verification, and activation take weeks, contractors can go elsewhere under the very freedom the agreement preserves. Compressing that process from weeks to days provides a direct competitive advantage. Insurance access also matters to the contractor. Occupational accident insurance, or OAI, is standard for app-based platforms, and operators providing it through bulk purchasing have a cost and attraction advantage.

Under Proposition 22, app-based delivery companies in California must have OAI. The California Supreme Court upheld Proposition 22 in Castellanos v. California in July 2024. That context makes insurance provision both a compliance matter and a benefit contractors weigh when choosing platforms. The broader financial consequence reaches beyond retention. Buyers pay less for last-mile delivery businesses that face risks over 1099 driver classification, so sound practices backed by records help protect what the business is worth as well as its standing with regulators.

Building a contractor agreement and compliance stack that makes non-exclusivity enforceable over time

A durable agreement needs an operating system that keeps its promises true after signing. For insurance, that means recognizing distinct coverages, namely commercial auto liability, cargo insurance, general liability, and occupational accident insurance. These policies do not substitute for one another. Extending workers’ compensation to independent contractors can also signal or confirm an employment relationship, creating tension with the classification position. Operators should thus review coverage choices as part of how they set up the contractor relationship.

The same discipline applies to documentation. Operators should maintain business licenses, proof of separate entity status, contractor-held insurance certificates, records of work for multiple clients, and signed work orders for each engagement. Those records need continuous attention because credentials lapse, insurance expires, and contractor status changes between audits. Real-time compliance monitoring is the appropriate operating standard. The goal is to keep the documented relationship aligned with the current one.

Scale makes that task harder without automation. When contractors can join multiple platforms, operators need to credential, insure, and activate large numbers of them quickly. Manual back-office processes cannot keep pace with a non-exclusive network at scale. Automation therefore needs to cover the contractor lifecycle, including onboarding, credentialing, insurance, compliance monitoring, and payments. Speed and compliance must support each other in the workflow.

Cornucopia’s Amazon DSP contract was terminated in August 2025, resulting in workers losing jobs after voting to unionize. That example underscores the limits of treating contract language as protection from events in the delivery operation. No clause can remedy an operating-layer compliance gap after the fact. Non-exclusivity works when the agreement, the evidence, and the daily business all describe the same freedom.