Massachusetts Highest Court Holds Grubhub Drivers Are Not Exempt from Arbitration under FAA

From JDSupra, Andrew Farrington and Eric Magnuson discuss a recent case in which the court said that Grubhub drivers were bound by the arbitration agreement that they signed. Andrew and Eric write:
In Archer, et al. v Grubhub, Inc., the Massachusetts Supreme Judicial Court (SJC) ruled that § 1 of the Federal Arbitration Act (FAA) applies to Grubhub delivery drivers.
The plaintiffs, former delivery drivers for Grubhub, commenced a putative class action against Grubhub in the Massachusetts Superior Court. The drivers alleged that Grubhub violated Massachusetts statutes, including the wage act (G.L. c 149, §§ 148 and 150), the tips act (G.L. c. 149, § 152A), and the minimum-wage act (G.L. c. 151, § 7).
Grubhub filed a motion to compel arbitration and to dismiss the complaint. Grubhub asserted that each plaintiff had entered into an agreement to arbitrate with Grubhub, which was enforceable under the FAA. The drivers counterargued, among other things, that they were not subject to the FAA.

§ 1 of the FAA exempts “seamen” and “railroad employees” from compelled arbitration. § 1 of the FAA also includes a so-called residual clause. That clause exempts “any other class of worker engaged in foreign or interstate commerce” from compelled arbitration.

“The plaintiff drivers insist[ed],” the SJC explained, “that they fall within the residual category because they are transportation workers who transport and deliver goods, such as prepackaged chips or soda, in the flow of interstate commerce.”

The lower court ruled in favor of the drivers.

The SJC reversed and remanded the matter for entry of an order compelling arbitration.

The SJC reasoned:

[T]he plaintiffs do not fit within the narrowly defined class of workers engaged in interstate commerce; they were not “connected . . . to the act of moving . . . goods across [S]tate or national borders.’” [Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 802 (7th Cir. 2020).] Rather, they transported goods that had already completed the interstate journey by the time the goods arrived at the restaurant, delicatessen, or convenience store to which they were sent; as such, the plaintiffs are dissimilar to the railroad workers, seamen, or the other limited, interstate class of workers contemplated by Congress when enacting § 1 of the FAA. Therefore, the plaintiffs do not fall into the § 1 exclusion for “any other class of workers engaged in foreign or interstate commerce” and are subject to the FAA.

You can review the SJC’s decision here.

Massachusetts Supreme Judicial Court

Docket Number: SJC-13228

Case Name: Archer, et al. v. Grubhub, Inc.

Date of Decision: July 27, 2022

Judge: Justice Dalila A. Wendlandt

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