Massachusetts Court Narrows Employees’ Ability to Invalidate Class Action Waivers

As we explained here, employees attempting to invalidate class action waivers are in a better place if they can establish that the Federal Arbitration Act (“FAA”) does not apply. The main argument for escaping the FAA is that the employee at issue is a transportation worker and, as such, falls within an exception to the FAA. That worked for “last mile” drivers for Amazon (read more here), a decision that essentially allowed the individuals to pursue their claims on a class action basis. But what about individuals who work for Postmates?

Damon Immediato, Stephen Levine, and Eric Wickberg were couriers who worked for Postmates, LLC, an online and mobile platform that connects customers with a variety of local merchants. Postmates classified these three individuals as independent contractors. They brought a class action in Massachusetts Superior Court, alleging that they were misclassified as independent contractors and seeking damages for failure to pay the minimum wage, unreimbursed business expenses, and paid sick leave. Postmates moved to compel arbitration pursuant to the FAA. The individuals countered, claiming that the FAA did not apply because they were transportation workers.

The court sided with Postmates. Read the order here. In doing so, the Court distinguished the Postmates drivers (FAA applies) from the “last mile’ Amazon drivers (FAA does not apply) by focusing on the activity of the workers in relation to the goods. The Court relied on the following quote from the Seventh Circuit Court of Appeals, related to Grubhub drivers, to explain the distinction:

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.

This Court ordered the claims to arbitration, a decision that will likely at some point be appealed. As an aside, the plaintiffs actually first submitted their claim to arbitration, but the arbitrator declined to arbitrate. Why? Well, apparently Postmates does not pay its arbitration bills.