Postmates Compels Arbitration of Misclassification Claims and Settles for $4,750

arbitration agreement over map of the world

From Reuters, reports on a settlement of claims by Postmates workers alleging that they were misclassified as independent contractors. Daniel writes:

A Boston federal judge on Monday dismissed a proposed class action accusing Postmates Inc of misclassifying couriers as independent contractors after the three named plaintiffs settled with the company in arbitration.

U.S. District Judge Richard Stearns in a brief order affirmed the arbitration awards and dismissed the 2020 lawsuit, about eight months after rejecting the plaintiffs’ bid to keep the case in court by claiming they were involved in interstate commerce and exempt from the Federal Arbitration Act.

The plaintiffs, represented by Lichten & Liss-Riordan, had claimed they should have been classified as Postmates’ employees under Massachusetts law and were owed the minimum wage, paid sick leave and reimbursements for work-related expenses.

Under the settlements approved by an arbitrator, the three plaintiffs were paid a total of $4,750.

Read the full story at Arbitration deals end Postmates misclassification row in Mass. | Reuters

The court said that the the workers were not exempt from the Federal Arbitration Act (“FAA”) they were not part of the exemption of the FAA for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  9 U.S.C. § 1.  engaged in interstate commerce. The court said

It is the goods, and not the workers, that define engagement in interstate commerce.  Whether an individual worker crosses a state line — or a foreign border — is immaterial to the determination.  See Waithaka v., Inc., 966 F.3d 10, 26 (1st Cir. 2020); Rittmann v., Inc., 971 F.3d 904, 915 (9th Cir. 2020).  Plaintiffs argue that because some of the goods they deliver are sourced from out-of-state manufacturers, they remain in the flow of interstate commerce while Postmates drivers cart them from the local store to the local customer.  In this sense, they contend that Postmates drivers are analogous to Amazon’s “last-mile delivery workers,” who the First Circuit has held to be covered by the § 1 exemption.  See Waithaka, 966 F.3d at 26.  However, as the Ninth Circuit has observed, “cases involving food delivery services like Postmates and Doordash are . . . distinguishable” from Amazon’s last-mile delivery workers because Amazon shipments travel through a national network of warehouses in which the in-state warehouse is simply a staging stop in the interstate journey.  See Rittman, 971 F.3d at 915-916 (“The packages are not held at warehouses for later sales to local retailers; they are simply part of a process by which a delivery provider transfers the packages to a different vehicle for the last mile of the packages’ interstate journeys.”).

It is true that one can find differences of opinion among courts over application of the § 1 exception to local food delivery workers.  Compare Austin v. Doordash, Inc., 2019 WL 4804781, at *4 (D. Mass. Sept. 30, 2019) (concluding that a Doordash driver “is not a transportation worker exempted by section 1 of the FAA”), with Archer v. GrubHub, Inc., No. 1984CV03277BLSI, at *12 (Mass. Super. Ct. Jan. 11, 2011) (Dkt # 21-1) (analogizing GrubHub drivers to Amazon “last mile” delivery drivers).[2]  Cases like Archer, however, are not precedential and largely ignore the Supreme Court’s “admonition that § 1 as a whole must be ‘afforded a narrow construction.’”  Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 802 (7th Cir. 2020), quoting Circuit City,532 U.S. at 118.  As the Seventh Circuit observed:

A package of potato chips . . . may travel across several states before landing in a meal prepared by a local restaurant and delivered by a Grubhub driver; likewise, a piece of dessert chocolate may have traveled all the way from Switzerland.  The plaintiffs insist that delivering such goods brings their contracts with Grubhub within § 1 of the FAA.  As they see it, the residual exemption is not so much about what the worker does as about where the goods have been.  But to fall within the exemption, the workers must be connected not simply to the goods, but to the act of moving those goods across state or national borders.  Put differently, a class of workers must themselves be “engaged in the channels of foreign or interstate commerce.” Id., quoting McWilliams v. Logicon, Inc., 143 F.3d 573, 576 (10th Cir. 1998) (emphasis added).[3] 

[2] Archer reflects the distinctly minority view.  See, e.g., Austin, 2019 WL 4804781, at *3-4 (“Plaintiff makes no allegation of a commercial connection between any interstate food distributor and the customers that receive prepared meals via Plaintiff’s delivery.”); Lee v. Postmates Inc., 2018 WL 6605659, at *7 (N.D. Cal. Dec. 17, 2018) (concluding that “making only

[3] Likewise, this court’s decision that Lyft drivers “are within a class of transportation workers excluded from coverage by Section 1 of the FAA” does not support plaintiffs’ position.  Cunningham v. Lyft, Inc., 450 F. Supp. 3d 37, 47 (D. Mass. 2020).  Cunningham dealt with the movement of passengers to and from the airport and, relying in part on Walling v. Jacksonville Paper Co., 317 U.S. 564 (1943), emphasized the “continuity of motion in interstate travel . . . .”  450 F. Supp. 3dat 46-47.

The court also reviewed whether a valid agreement to arbitrate was entered into in the first place. The court said:

Under Massachusetts law, an online contract is enforceable if there is “reasonable notice of the terms and a reasonable manifestation of assent to those terms.”  Kauders v. Uber Techs., Inc., 486 Mass. 557, 572 (2021); see also Ajemian v. Yahoo!, Inc., 83 Mass. App. Ct. 565, 573-574 (2013).  Here, both elements are satisfied. 

See Immediato v. Postmates Inc, U.S. District Court for the District of Massachusetts, No. 1:20-cv-12308.

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