The United States Court of Appeals for the Fourth Circuit recently ruled that an arbitration clause in a contract between Amazon and an independently owned package delivery businesses was enforceable, notwithstanding the Federal Arbitration Act’s (FAA) exemption for contracts of employment with transportation workers.
Amazon Logistics, Inc. (“Amazon”) entered into a “Delivery Service Partner Program Agreement” with Kirk Amos Delivery and Courier LLC (“Kirk”) pursuant to which Kirk agreed to deliver packages to Amazon’s customers in the Durham, North Carolina area. Amazon alleged that Kirk breached the terms of the agreement, which Amazon then terminated. In response, Kirk – along with Kirk’s owner, Ahaji Amos – sued Amazon, asserting employment, tort, and contact law claims. Amazon then sought to compel arbitration pursuant to the FAA and the corresponding state law (the WUAA). Kirk and Amos objected, arguing that both the FAA and the WUAA voided the arbitration clause because Amos was a “transportation worker” within the meaning of the FAA and an “employee” within the meaning of the WUAA and, thus, was exempt from arbitration clauses.
The District Court granted Amazon’s motion to compel arbitration on the basis of the WUAA, finding that even if Amos could be considered an Amazon employee, employers and employees are permitted under the WUAA to waive the exemption, and it found that Amos, Kirk, and Amazon had waived the exemption. The District Court did not reach the question of the applicability of the FAA’s “transportation worker” exemption.
Amos and Kirk appealed. The Court of Appeals for the Fourth Circuit ruled that the FAA mandated arbitration and so the Court need not look at the WUAA. The Court found that the FAA applied to the agreement between Amazon and Kirk, and that arbitration of the plaintiffs’ claims would be required unless there was an applicable statutory exemption.
First, the Court ruled that the agreement was not a “contract of employment” because it did not promise work and compensation to an individual employee and contained “none of the hallmarks of a traditional employment contract,” such as salary, benefits, and leave. The Court then ruled that even if the agreement could be construed as a contract of employment, Kirk was not among the “class of workers” to which the FAA’s exemption applies, finding that the exemption applies only to actual human workers, not companies. Finally, the Court found that because Amos herself was not a party to the agreement, it did not matter that she may have been a “transportation worker” under the FAA.