“Last Mile” Delivery Drivers Exempt from Federal Arbitration Act

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The United States Court of Appeals for the First Circuit has held that, despite never crossing state lines in the course of their duties, “last mile” delivery drivers qualify for the Federal Arbitration Act’s (“FAA”) exemption for transportation workers due to their sufficient engagement in interstate commerce. Accordingly, the FAA did not apply to the Plaintiff’s contract, state law applied instead, and the Plaintiff’s claims could proceed in court rather than via arbitration. Waithaka v. Amazon.com, Inc. et al.

Plaintiff Bernart Waithaka signed up to provide so-called “last mile” delivery services for Amazon, the contract for which provided for mandatory arbitration of any disputes and barred class action proceedings. When he filed a putative class action suit in state court against Amazon claiming workers were misclassified as independent contractors and that Amazon failed to properly pay or reimburse workers, Amazon removed the case to federal court and moved to compel arbitration. The United States District Court for the District of Massachusetts denied the motion to compel arbitration, and Amazon appealed.

Citing to the United States Supreme Court’s 2001 holding that the exemption applied only to “transportation workers,” the First Circuit held that last mile delivery workers are sufficiently “engaged in…interstate commerce” whether or not they physically crossed state lines. On that basis, the First Circuit held that the exemption applied and the FAA did not govern the dispute, rejecting Amazon’s “cramped construction of [FAA] Section 1’s exemption for transportation workers.” Similar suits involving defendants such as Uber, Lyft and Grubhub remain pending across the Country, including in the Seventh and Ninth U.S. Circuit Courts of Appeals. While it remains to be seen whether those Circuits will agree with the First Circuit and whether state law in various jurisdictions would provide protections as substantial as those in Massachusetts against class action waivers, Plaintiff Waithaka can proceed in court.

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