On August 19, 2020, in a 2-1 decision, the 9th Circuit affirmed a Washington District Court’s decision rejecting Amazon.com Inc.’s plea to arbitrate wage claims brought by a class action of Amazon drivers alleging they were misclassified as independent contractors as opposed to employees.
The 9th Circuit found that the Amazon drivers were in fact transportation workers and according to Circuit Judge Milan D. Smith Jr., were “engaged in interstate commerce and thus exempt from the [Federal Arbitration Act’s] enforcement provisions[.]”
Two of three Circuit Court judges agreed that Amazon drivers did not have to physically cross state lines to fall under the definition of a transportation worker who is exempt from arbitration under the Federal Arbitration Act. Section 1 of the Federal Arbitration Act exempts from arbitration “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Because “the interstate transactions between Amazon and the customer do not conclude until the packages reach their intended destinations” Amazon drivers were considered by the Circuit Court majority to be engaged in the movement of interstate commerce even if they did not physically cross state lines.
The decision dealt Amazon another significant blow in federal courts after the 1st Circuit also rejected Amazon’s argument to arbitrate claims brought by a Massachusetts driver. Similar to the 1st Circuit, the 9th Circuit rejected Amazon’s narrow interpretation of the exemption, finding that a driver employed to deliver goods that come from out of state and are delivered to an instate customer is no different than a worker responsible for delivering goods between states.
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About Camilo Burr
Camilo Burr is an Associate in Faruqi & Faruqi’s New York office and focuses his practice on employment law and wage and hour class action litigation.