The US Supreme Court on June 21 declined to review a First Circuit ruling against Amazon, leaving in place a judgment that independent transportation contractors — Amazon’s delivery drivers — are exempt from the Federal Arbitration Act and cannot be forced into arbitration.
The case involved so-called “last-mile” delivery drivers. In 2017, Bernard Waithaka filed suit against Amazon in Massachusetts state court, asserting: misclassification of Amazon Flex drivers as independent contractors, rather than employees; violation of the Massachusetts Wage Act by requiring drivers to “bear business expenses necessary to perform their work”; and violation of the Massachusetts Minimum Wage Law. He sought class action status. Amazon moved to compel arbitration.
The FAA exemption. In 2019, the Supreme Court in a separate case ruled the Federal Arbitration Act did not apply to transportation workers engaged in interstate commerce. The FAA specifically exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” the Supreme Court said in its January 2019 ruling.
In May 2019, a federal appeals court in Washington state determined Amazon delivery drivers engage in interstate commerce despite not actually crossing state lines in the course of their deliveries. The court reasoned that because the workers delivered goods shipped from around the US to the ultimate consumer, the transportation worker exemption did apply, even if the final delivery drivers never cross state lines. Further, the court determined a strike by the workers would interrupt interstate commerce. Thus, Amazon could not compel individual arbitration in the drivers’ independent contractor misclassification lawsuit filed against it.
Waithaka v. Amazon. Back to the Massachusetts case. In July 2020, the First Circuit affirmed a district court’s ruling that denied Amazon’s motion to compel arbitration.
In its ruling, the First Circuit held the FAA exemption “encompasses the contracts of transportation workers who transport goods or people within the flow of interstate commerce, not simply those who physically cross state lines in the course of their work.”
Amazon appealed the case to the US Supreme Court in January.