Amazon Arbitration Rulings Invoked Against Lyft, Grubhub

By Jon Steingart
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Law360 (August 26, 2020, 10:14 PM EDT) -- Grubhub and Lyft drivers urged two federal appeals courts to find that they're exempt from the Federal Arbitration Act in their fight to be classified as employees, citing recent appellate rulings that found the law didn't cover Amazon.com delivery drivers.

In both cases, drivers argue that the companies can't rely on the act to enforce arbitration agreements that require them to resolve disputes out of court because the law doesn't cover workers who engage in interstate commerce. The Grubhub drivers say the company is ducking its duty to pay minimum wage and overtime, while the Lyft drivers say they're entitled to paid sick leave to cope with the COVID-19 pandemic. The workers want to press their claims as class actions, which would be barred by the arbitration agreements if they're upheld.

The drivers in both cases pointed to recent rulings that clarify the arbitration act's reach. The First Circuit on July 17 and the Ninth Circuit on Aug. 19 found that Amazon drivers engage in interstate commerce, even if they operate within only one state, because their role is to transport goods for one leg of a larger journey across boundaries

The Grubhub drivers are asking the full Seventh Circuit to reconsider a three-judge panel's Aug. 4 ruling that said they could qualify for the exemption only if they crossed state lines. The Lyft drivers are asking the Ninth Circuit to review a California federal judge's April decision that sent their sick leave suit to arbitration.

"Numerous courts ... have now recognized that workers are 'engaged in interstate commerce' within the meaning of Section 1 [of the Federal Arbitration Act], even if they themselves do not cross state lines but instead transport goods (or passengers) who cross state lines 'within the flow of interstate commerce,'" the Lyft drivers wrote in their brief, quoting from the Ninth Circuit opinion in Rittmann v. Amazon.com .

The First Circuit in Waithaka v. Amazon.com found that the arbitration act's exemption covers "transportation workers who transport goods or people within the flow of interstate commerce." It doesn't matter if workers cross a state border, the First Circuit said.

The Ninth Circuit, faced with what it called "a nearly identical case," agreed with the First.

One circuit isn't required to follow another's reasoning, but they can lean on each other's analyses as persuasive authority.

Lyft driver John Rogers sued the ride-hailing company in March in San Francisco Superior County Superior Court, contending that it didn't offer paid sick leave that California requires for employees. The Grubhub case is a consolidated appeal of two suits that were filed in 2016 in Illinois federal court and in 2018 in California federal court, covering thousands of food delivery drivers in about 40 states.

Shannon Liss-Riordan, who represents the workers in both cases as well as others in a host of suits against gig economy giants, said they're forcing courts around the country to examine the FAA's reach.

"It's a significant issue that's now gelling in multiple circuits," she told Law360 Wednesday. "Now this will all be taken up with our Uber and Lyft cases, which are also in the First and Ninth Circuit."

Grubhub declined to comment. Lyft didn't immediately respond to a request for comment.

The drivers in the Lyft case are represented by Shannon Liss-Riordan of Lichten & Liss-Riordan PC.

The drivers in the Grubhub case are represented by Shannon Liss-Riordan and Thomas Fowler of Lichten & Liss-Riordan PC, and James Zouras and Ryan Stephan of Stephan Zouras LLP.

Lyft is represented by Rachael Meny, R. James Slaughter and Eugene Paige of Keker Van Nest & Peters LLP, Benjamin Barokh and Jeffrey Wu of Munger Tolles & Olson LLP, and Dane Shikman and Rohit Singla of Munger Tolles & Olson LLP.

Grubhub is represented by Robert Pritchard, Joshua Vaughn, Andrew Spurchise and Todd Church of Littler Mendelson PC.

The cases are Wallace et al v. Grubhub Holdings, Inc. et al, case number 19-1564, and Souran et al. v. GrubHub Holdings, Inc. et al., case number. 19-2156, in the U.S. Court of Appeals for the Seventh Circuit, and Rogers et al v. Lyft, Inc., case numbers 20-15689 and 20-15700, in the U.S. Court of Appeals for the Ninth Circuit.

--Editing by Adam LoBelia.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

Carmen Wallace, et al v. Grubhub Holdings, Inc., et al


Case Number

19-1564

Court

Appellate - 7th Circuit

Nature of Suit

3710 Fair Labor Standards Act

Date Filed

March 28, 2019


Case Title

Thomas Souran, et al v. Grubhub Holdings, Inc., et al


Case Number

19-2156

Court

Appellate - 7th Circuit

Nature of Suit

3710 Fair Labor Standards Act

Date Filed

June 17, 2019


Case Title

John Rogers, et al v. Lyft, Inc.


Case Number

20-15689

Court

Appellate - 9th Circuit

Nature of Suit

3790 Other Labor Litigation

Date Filed

April 16, 2020


Case Title

John Rogers, et al v. Lyft, Inc.


Case Number

20-15700

Court

Appellate - 9th Circuit

Nature of Suit

3790 Other Labor Litigation

Date Filed

April 17, 2020

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