A recent decision by a federal appeals court is good news for delivery drivers seeking compensation for unpaid wages and unreimbursed expenses. In an important decision dated July 17, 2020, the First Circuit U.S. Court of Appeals held that Amazon delivery drivers are considered “transportation workers engaged in interstate commerce” even if they never physically cross state lines to complete deliveries.
The decision is important because this means that Amazon delivery drivers may proceed with a class action lawsuit without having to go through private arbitration. Defendant Amazon argued that plaintiffs may only resolve disputes through arbitration, and are prohibited from filing a law suit according to the Federal Arbitration Act (FAA). The appeals court, however, disagreed with Amazon’s argument that the FAA required arbitration in this case because the FAA does not require arbitration for “entire categories of workers in the transportation industry just because those workers might not have physically crossed state lines.”
Amazon unsuccessfully argued that “last-mile delivery workers” who do not always cross state lines when traveling the final legs of the delivery did not “engage in interstate commerce” and therefore must settle claims in arbitration, not court. The court’s decision, however, firmly includes these last-mile delivery drivers as engaging in work “within the flow of interstate commerce.” The key to the decision was whether or not the delivery drivers “engaged in” interstate commerce if they did not actually travel across state lines to deliver goods. According to the appeals court, the drivers were entitled to sue employers for claims of labor law violations and it was not important that they did not actually physically cross a state line in order to make the delivery. This reasoning is based on a 2001 U.S. Supreme Court decision that held employees were engaged in interstate commerce even when employees did not actually cross a state line as long as the intrastate portion of their work was part of an overall “interstate journey.” In other words, the court did not want to penalize the drivers for being assigned delivery routes by Amazon that did not require them to cross state lines, but nonetheless was part of interstate delivery of goods.
The class action suit against Amazon was originally filed in 2017 by drivers in Massachusetts who claimed Seattle-based Amazon misclassified delivery drivers as independent contractors. This misclassification allowed Amazon to refuse to provide drivers with vehicles or reimburse for expenses incurred by drivers such as insurance, gas, and mileage. Amazon argued that arbitration was the appropriate and only forum available to plaintiffs because of the FAA. Employers favor arbitration because arbitration usually favors employers, awards are binding and not subject to appeal, and arbitration is generally much less expensive than a trial. Moreover, if an employer loses at trial, often the award includes plaintiff’s attorney’s fees.
Additionally, Amazon unsuccessfully argued that Washington state law prohibited the class action lawsuit because the employees were bound by a class action waiver that was part of their employment contract. A class action waiver prohibits employees from filing a class action against employers, but the appeals court refused to apply Washington state law. Instead, the court relied on Massachusetts state law, which is considerably more favorable to employees. Under Massachusetts state law, the appeals court held that the class action waiver was “contrary to the commonwealth’s fundamental public policy” and invalid because it was not possible to enforce the arbitration provision independently from the rest of the relevant section of the contract dealing with dispute resolution.
This decision has significant impact on the pending litigation, as well as other class action lawsuits across the country where employees are misclassified by employers in order to violate labor laws and avoid paying certain wages or reimburse expenses, and will greatly assist employees who have had their rights violated by employers.
Srourian Law Firm, with locations in Los Angeles, Westwood, Woodland Hills, and Orange County is experienced in all aspects of employment law including unpaid wages and unreimbursed expenses and have aggressively represented employees in Los Angeles, Hollywood, Santa Monica, Orange, Irvine, Anaheim, Santa Ana, Newport Beach, Costa Mesa, Fullerton, Tustin, Mission Viejo, San Clemente, Garden Grove, Laguna Niguel, Brea, Fountain Valley, Aliso Viejo, Yorba Linda, Westminster, Laguna Hills, Cypress, and La Habra.
If you or someone you know suffered employment violations as a delivery driver or employee including unpaid wages or unreimbursed expenses, you may have certain employee rights under state and federal law, and may be entitled to compensation as a part of the class action lawsuit. Please contact us to speak with one of our lawyers for a free consultation.