First Circuit Affirms Food Delivery Drivers Must Arbitrate Misclassification Claims

As reported in a prior blog post, the U.S. Court of Appeals for the First Circuit on Nov. 9, 2022, heard oral argument in the latest bids by food delivery drivers to escape arbitration of their putative class actions against Postmates and Grubhub for alleged misclassification and related wage law and sick leave violations. It did not take long for the court to issue its decisions. On Nov. 29, 2022, the court of appeals affirmed the judgment of the district court in Immediato v. Postmates, compelling arbitration of the parties' dispute. And on Dec. 2, 2022, the court did the same in Levine v. Grubhub, for essentially the same reasons explained in Immediato. In sum, the court held that Postmates and Grubhub couriers are not actively engaged in the interstate transport of goods and, thus, are not within a class of workers exempt from arbitration under Section 1 of the Federal Arbitration Act (FAA), 9 U.S.C. Section 1.

While the background of these cases was discussed in our prior blog post, a few points are worth emphasizing for this update. First, the court noted that the term "engaged in foreign or interstate commerce" in Section 1 can apply to workers who are engaged in the interstate movement of goods, even if they are responsible for only an intrastate leg of that movement, citing the court's prior decision in Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020). However, their work "must be a constituent part of that movement, as opposed to a part of an independent and contingent intrastate transaction," citing the court's prior decision in Cunningham v. Lyft, Inc., 17 F.4th 244 (1st Cir. 2021). Although the Postmates and Grubhub couriers transport goods, they do so as part of separate intrastate transactions that are not themselves within interstate commerce. The interstate journey ends when the goods are delivered to the restaurant or retailer, and the subsequent delivery of the goods is a new and separate transaction. In addition, the court noted that couriers typically travel only a few miles to perform deliveries in response to orders placed by local customers within the state. Almost all deliveries are performed within the state where the order is placed. In short, the delivery of food and other consumer goods from restaurants, grocery stores and convenience stores is a distinct intrastate journey.

Conclusion

With this decision, the First Circuit joins the Massachusetts Supreme Judicial Court and other federal courts of appeals that have addressed this question in concluding that couriers who deliver food and other goods from local vendors to local purchasers are not transportation workers engaged in interstate commerce and, thus, are not exempt from arbitration under Section 1 of the FAA.