Last week, the United States Federal Court for the District of Massachusetts granted Defendant food delivery company DoorDash’s motion to compel arbitration in a case brought by employee and food delivery driver, Darnell Austin. In Austin v. DoorDash, Inc., Austin alleged that while working for DoorDash, his wages fell below the Massachusetts minimum wage, in violation of the Massachusetts Wage Act. DoorDash moved to dismiss and compel arbitration pursuant to an arbitration provision included in the contractor agreement Austin entered into with DoorDash.
The key issue before the court was whether the arbitration agreement was exempt from the Federal Arbitration Act’s coverage, and therefore, unenforceable. While the FAA generally requires courts to enforce arbitration agreements, there are a number of exceptions, including “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The Supreme Court has interpreted this exception to apply to “only contracts of employment of transportation workers.” Austin argued that as a delivery driver, he was a transportation worker, and therefore fell under this exception to the FAA.
As the Court noted, “little consensus has been realized” with respect to what constitutes a “transportation worker.” Given that the First Circuit has yet to interpret the phrase, the Austin court, found eight factors enumerated by the Eight Circuit helpful:
First, whether the employee works in the transportation industry; second, whether the employee is directly responsible for transporting the goods in interstate commerce; third, whether the employee handles goods that travel interstate; fourth, whether the employee supervises employees who are themselves transportation workers, such as truck drivers; fifth, whether, like seamen or railroad employees, the employee is within a class of employees for which special arbitration already existed when Congress enacted the FAA; sixth, whether the vehicle itself is vital to the commercial enterprise of the employer; seventh, whether a strike by the employee would disrupt interstate commerce; and eighth, the nexus that exists between the employee’s job duties and the vehicle the employee uses in carrying out his duties.
While the Court found that the first, sixth and eighth factors favored Austin, Austin could not overcome the fact that he did not allege that he ever crossed state lines nor was he ever offered routes that involved transporting meals across state lines. Further, the Court distinguished Austin’s delivery of prepared meals from a restaurant to a customer from delivery from a manufacturer who intends for its products to enter the flow of interstate commerce to its final destination, stating that Austin made no allegation that a “manufacturer intended to make its products available to consumers in their homes via [DoorDash’s] service and drivers. Instead, the final destination from the vantage point of the interstate food distributors are the restaurant where [Austin] picks up orders, and not the customers to whom he makes deliveries.”
Notably, the Court signaled that similar challenges to arbitration provisions can be expected to continue. In fact, the Court identified hypothetical scenarios which might necessitate a different outcome, including “if the driver had alleged that he crossed state lines to deliver goods, as might occur where a delivery driver is stationed close to a state’s border,” or if the driver “delivers groceries for a store that buys goods in interstate commerce.”
Following the Supreme Court’s Epic Systems Corp. v. Lewis decision last year, in which, as a previous HR Minute article discussed, the Court upheld arbitration clauses requiring employees to submit to individual arbitration of claims, foreclosing an employee’s ability to file claims in court or to arbitrate on a class basis, employers’ use of arbitration clauses became ubiquitous, especially within the so-called gig economy. Unsurprisingly, employee challenges to arbitration provisions are now pervasive in courts throughout the country. And, as the court telegraphed in Austin, there is no slowdown in sight.
Employers who use arbitration provisions should anticipate potential challenges from employees and ensure their provisions are enforceable in the current legal landscape.