MA: Grubhub Drivers are Exempt from Federal Arbitration Act (FAA)

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From JDSupra, Richard Reibstein reports on a Massachusetts case in which Grubhub drivers were found to be exempt from the Federal Arbitration Act (FAA) because they were interstate transportation workers. This is a different finding from the Seventh Circuit Court of Appeals that said Grubhub drivers were not interstate transportation workers. Richard writes:

GRUBHUB MUST LITIGATE CLASS ACTION IN COURT AND NOT IN INDIVIDUAL ARBITRATION, ACCORDING TO MASSACHUSETTS COURT.  A Massachusetts court has denied a motion to compel arbitration of a courier’s IC misclassification claims, finding that the Federal Arbitration Act’s exemption from arbitration for interstate transportation workers applies to GrubHub because the couriers (in addition to delivering meals prepared by restaurants) also deliver pre-packaged and non-food items that originated outside of Massachusetts (such as soft drinks, chips, toilet paper, cleaning products, and flowers). GrubHub is an online and mobile food ordering and delivery company that allows its customers to order from various restaurants throughout Massachusetts and other states. Plaintiff delivery drivers alleged that the company misclassified drivers as ICs instead of employees and thereby unlawfully retained service and delivery charges, failed to reimburse them for travel expenses, and later retaliated against them. GrubHub contended that the drivers were not exempt from the FAA as interstate transportation workers simply because, in addition to prepared meals from local restaurants, they occasionally delivered pre-packaged items that emanated from states outside of Massachusetts. The court agreed with the drivers, concluding that, as the final participants in the moving stream of commercial transactions that transported and delivered pre-packaged and non-food items ‎to their ultimate users or consumers, the drivers qualified as “workers engaged in foreign or interstate commerce” for purposes of the FAA arbitration exemption. Additionally, because the drivers were exempt from arbitration, the court invalidated the class action waiver contained in GrubHub’s arbitration agreement.  This decision is at odds with a recent decision by the U.S. Court of Appeals for the Seventh Circuit, which held that couriers who make deliveries to GrubHub customers are not interstate transportation workers. An appeal is expected.  Archer v. GrubHub, Inc., No.1984CV03277 (Suffolk Super. Ct. Mass. Jan. 13, 2021).

Source: Not So Fast: January 2021 Independent Contractor Law Update | Locke Lord LLP – JDSupra

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