Joining other courts that have addressed the same issue in their own jurisdictions, on July 27 the Commonwealth’s highest court decided Grubhub’s food delivery drivers are not a “class of workers engaged in … interstate commerce” and, therefore, are not exempt from the Federal Arbitration Act (FAA). In line with the pro-arbitration policy of the FAA, Grubhub can therefore enforce their drivers’ arbitration agreements, forcing them to arbitrate their claims individually with the company rather than pursue their claims together as a class action.
In Archer v. Grubhub, Inc., former Grubhub drivers brought a class action lawsuit against the company asserting violations of the Wage Act, Tips Act, and Minimum Wage Act, as well as claims of retaliation. Grubhub sought to compel arbitration with each individual employee in accordance with the terms of the arbitration agreements that it requires drivers to sign. The Trial Court initially sided with the drivers and allowed the class action to proceed. Grubhub appealed, however, and the Supreme Judicial Court reversed the Trial Court decision, dismissing the class action complaint and compelling arbitration. The decision turned on whether Grubhub drivers could be termed a “class of workers engaged in . . . interstate commerce.” If so, they would be exempt from the FAA and could pursue claims in court. If not, they could be forced to arbitrate. The Court reasoned that “the question is not whether any individual worker was engaged in interstate commerce, but whether the class of workers to which the individual belonged was engaged in interstate commerce.” Because the drivers delivered food from restaurants located in the Commonwealth of Massachusetts to Grubhub customers also located in the Commonwealth, the Court held the drivers were not engaged in interstate commerce, even though the ingredients for the meals they delivered may have traveled in interstate commerce before arriving at Massachusetts restaurants.
The drivers argued that they were akin to Amazon’s last-mile delivery workers, who the First Circuit held are exempt from the FAA in a 2020 decision. Whereas the Amazon case involved the last transportation step in a long interstate journey, the Court reasoned in this case that the Grubhub meals were “not part of [an] ongoing and continuous interstate transmission.” For companies and individuals involved in similar future cases, a key consideration is whether delivery to the final destination in the Commonwealth is envisioned by the originator of the goods at the beginning of the transaction. In this instance, the food wholesalers who provided ingredients to local restaurants did not envision the ultimate delivery of prepared meals to Commonwealth residents. Grubhub drivers instead “transported goods that had already completed the interstate journey” and, the Court held, were not engaged in interstate commerce.