As we indicated in a January 17, 2019 blog article, the New Prime v. Oliveira, 139 S. Ct. 532 (2019), opinion was likely to lead to uncertainty in the transportation industry. Some imaginative commentators even forecast that the Federal Arbitration Act (FAA) Section 1 exemption could be a tool to unravel arbitration agreements with class waivers in a broad swath of companies that transport, carry or deliver goods or commodities. We believe those commentators, however, are construing Section 1 far too broadly and out of context.
Now, we are seeing some of the arguments regarding the scope of the FAA’s Section 1 play out in Rittman v. Amazon.com, Case No. 2:16-cv-01554 (W.D. Wash.) Rittmann involves a Fair Labor Standards Act collective action alleging that Amazon did not properly compensate its delivery drivers. But, it has now focused on whether Amazon’s local delivery drivers (who may also use other means of delivery) fall within Section 1 exemption, making their arbitration agreements unenforceable after New Prime. For those who may have forgotten, Section 1 excludes from the Act’s coverage: “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Continue Reading