In this time of concern regarding the COVID-19 pandemic, there are other challenges still confronting companies. One involves the standard for enforcing arbitration agreements involving transportation workers. Or, stated differently, when drivers may be exempt from the Federal Arbitration Act (FAA). We have previously covered the courts’ struggles to deal with the fallout from New Prime v. Oliveira, 139 S. Ct. 232 (Jan. 12, 2019), on the transportation industry and gig drivers. See our blog posts of Jan. 17, 2019, Mar. 12, 2019, Apr. 29, 2019 and Sept. 13, 2019.
Now, U.S. District Court Judge Indira Talwani has waded into the legal thicket to determine those workers who are covered by the FAA Section 1 exemption and if the arbitration agreement with class waivers could be enforced under the Massachusetts Uniform Arbitration Act. See Cunningham v. Lyft, Inc., Case No 1:19-cv-11974, Order of Mar. 27, 2020.
In Cunningham District Judge Talwani considered the application of the FAA’s Section 1 exemption in the context of a class action alleging misclassification as independent contractors, brought by ride sharing drivers who transport paying passengers rather than goods. After analyzing Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), and Singh v. Uber Techs. Inc., 939 F. 3d 210 (3d Cir. 2019), (among others) the court concluded that there was “no basis in the statute or precedent” to restrict the Section 1 exclusion only to workers who transport goods rather than passengers. (Slip Op. at 12). Continue Reading