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Amazon and a group of delivery drivers using its Flex program told a federal judge in Seattle on Tuesday that they have reached an agreement in principle to resolve a lawsuit accusing the company of improperly withholding customer tips.

In a joint filing, Amazon.com Inc., Amazon Logistics Inc. and five named drivers said they are finalizing settlement terms and asked the court to pause the case while the agreement is completed. The parties said they expect to submit dismissal paperwork within 60 days and will provide an update if additional time is needed.

U.S. District Judge Barbara J. Rothstein responded by halting all deadlines and canceling pending motions, including a request filed last year seeking to revive a Massachusetts-specific claim and certify a class of nearly 3,500 drivers in that state.

The lawsuit, originally filed in early 2021, alleges that Amazon violated consumer protection laws by failing to honor representations that Flex drivers would receive the full amount of tips left by customers. Drivers claimed the company used tips to subsidize base pay rather than passing them through as promised.

The case previously reached the Ninth Circuit, which upheld a lower court’s decision refusing to force the dispute into arbitration. The U.S. Supreme Court later declined to review that ruling.

In mid-2024, Judge Rothstein declined to certify a nationwide class covering more than 150,000 Flex drivers, finding that most had already received compensation through a separate $61.7 million settlement Amazon reached with federal regulators over similar allegations.

One plaintiff later sought to pursue claims under Massachusetts law, arguing that state statutes could allow for enhanced damages beyond what was provided through the federal settlement. That request, along with other pending motions, has now been set aside while settlement talks continue.

Amazon had also asked the court to delay proceedings pending guidance from the U.S. Supreme Court in an unrelated case examining whether certain delivery drivers fall outside federal arbitration requirements. The judge indicated those issues could be revisited if the settlement does not move forward.

If the agreement is finalized, the case will be dismissed. If not, the court said the parties may refile their motions and resume litigation.

The case is Cain et al. v. Amazon.com Inc. et al., case number 2:21-cv-00204, in the U.S. District Court for the Western District of Washington.