The First Circuit recently issued an opinion concluding that “last-mile delivery workers who haul goods on the final legs of interstate journeys are transportation workers ‘engaged in … interstate commerce,’ regardless of whether the workers themselves physically cross state lines.” As a result, the Federal Arbitration Act does not govern their arbitration agreements. Waithaka v. Amazon.com, Inc., No. 19-1848 (1st Cir. July 17, 2020) (click here for a copy of the decision). The case involved a class action for minimum wage violations and improper classification as independent contractors under Massachusetts laws. The First Circuit engaged in a very detailed, thoughtful analysis of the text, structure, and purpose of the FAA to conclude that last-mile delivery workers are exempt from the FAA.
After concluding that federal law did not govern the arbitration agreements at issue, the First Circuit then examined the agreements pursuant to state law. The First Circuit held that the class action waiver in the arbitration agreement violates the public policy of the state of Massachusetts. Because the class action waiver was unenforceable, the court also addressed whether a class action could then proceed in arbitration. Relying in part on the Supreme Court’s decision in Stolt-Nielsen, that the shift from bilateral to class arbitration is fundamental, and also relying on the terms of Amazon’s agreement forbidding class proceedings, the First Circuit concluded class arbitration could not occur. As a result, the district court was correct in denying Amazon’s motion to compel arbitration.
The First Circuit decision leaves open whether other workers who are “practically a part” of interstate transportation, “such as workers sorting goods in warehouses during their interstate journeys or servicing cars or trucks used to make deliveries,” are exempt from the FAA.