A federal district court last week halted a provision of California labor law that would have banned mandatory arbitration clauses in employment agreements on, weakening AB 5. Amazon asks the Ninth Circuit Court of Appeal to enforce arbitration in a case involving delivery drivers claiming misclassification.
California ban. On Jan. 31, the District Court for the Eastern District of California permanently enjoined enforcement of AB 51, a provision of California labor law that would have banned mandatory arbitration clauses in employment agreements on and after Jan. 1, Lawyers and Settlements reports.
AB 51 was signed into Law in October 2019. While it was slated to go into effect Jan. 1, The US Chamber of Commerce sued the state to enjoin enforcement of AB 51, arguing AB 51 violated the Federal Arbitration Act, citing precedent established in two US Supreme Court decisions: Epic Systems Corp. v. Lewis and Kindred Nursing Centers. Ltd. Partnership v. Clark. A federal court issued a temporary stay on Dec. 30.
The Jan. 31 ruling will likely weaken efforts to enforce AB 5, according to the report. California may appeal to the US Supreme Court, which may decline to review the case because “it presents no issue not already resolved in Epic Systems or Kindred Nursing Centers,” Lawyers and Settlements reported.
Amazon drivers. Amazon on Monday asked the Ninth Circuit Court of Appeal to overturn a lower court ruling that its local delivery drivers fall under a transportation worker exemption in the Federal Arbitration Act and therefore could not be compelled to arbitrate their labor disputes, Courthouse News reports.
The case, Rittman v. Amazon.com, is a Fair Labor Standards Act collective action alleging that Amazon misclassified its delivery drivers as independent contractors. Originally filed in 2016, the case took a turn after the US Supreme Court ruling that carrier companies cannot enforce arbitration agreements because the Federal Arbitration Act exempts transportation workers.
In April 2019, a US district court said that the Federal Arbitration Act was inapplicable to the Amazon drivers and that Washington state law can’t be used to enforce the arbitration provision.
Amazon attorney David Salmons argued before the panel that Amazon drivers typically do not cross state lines and therefore the interstate commerce exemption to the FAA does not apply to them.
The Rittman case is at odds with other cases in the courts. In June 2019, a US district judge in the Northern District of California ruled delivery drivers must arbitrate with Amazon since it’s “not a transportation company like FedEx or DHL.”