Ninth Circuit Issues Win for Amazon Delivery Drivers

A recent ruling from the U.S. Court of Appeals for the Ninth Circuit upholds the right of Amazon delivery drivers to bring employment claims in court, rejecting Amazon.com’s argument that such claims must be decided through private arbitration. The Ninth Circuit joined the First Circuit Court of Appeals in holding that Amazon delivery drivers, through their Amazon Flex program, are transportation workers engaged in interstate commerce and therefore, not subject to the Federal Arbitration Act (“FAA”).

In Rittman v. Amazon.com, a group of workers filed a class and collective action alleging violation of federal and state wage laws and that Amazon misclassifies its drivers as independent contractors rather than employees. In response, Amazon moved to compel certain claims to arbitration under the FAA, because one of the named Plaintiffs did not opt-out of Amazon’s Terms of Service Agreement (“TOS”). Amazon’s TOS requires its drivers to arbitrate their legal claims before an arbitrator rather than a court of law. The District Court denied Amazon’s motion to compel and held that the delivery drivers are engaged in interstate commerce – a function that is exempted from the FAA. Amazon appealed to the Ninth Circuit.

The Ninth Circuit upheld the District Court’s decision in full. As the Ninth Circuit explained, the FAA generally provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. However, the FAA contains several exemptions, including one applicable to employment contracts of “seamen, railroad employees, [and] and other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.

In their appeal, Amazon argued that the delivery drivers must actually cross state lines to be “engaged in interstate commerce.” The Ninth Circuit, using the plain meaning of the statutory text of the FAA, case law interpreting the exemption’s scope and application, and the construction of similar statutory language, concluded that transportation workers need not cross state lines to be considered “engaged in foreign or interstate commerce” under the FAA. Specifically, because the transportation workers were actually engaged in the movement of goods in interstate commerce, the arbitration clause is not applicable. Accordingly, the case will be sent back to the District Court and litigation will continue, unless Amazon appeals and the Supreme Court takes the case.

While the Ninth Circuit’s decision is a win for workers seeking to enforce their statutory rights in court, the time has long passed for Congress to reexamine the FAA and the over-reliance on forced arbitration policies.