18th Annual Workplace Class Action Report - 2022 Edition

206 Annual Workplace Class Action Litigation Report: 2022 Edition Capriole, et al. v. Uber Technologies, Inc. , 7 F.4th 854 (9th Cir. 2021). Plaintiffs, a group of drivers, filed a class action alleging that Defendant misclassified drivers as independent contractors and thereby failed to pay them minimum wages and overtime compensation, as well as failed to provide paid sick leave in violation of state wage & hour laws. Defendant sought to compel arbitration of the drivers’ claims based on the mandatory arbitration agreement the drivers signed, which included a class action waiver. Plaintiffs argued that drivers were exempt from mandatory arbitration under § 1 of the Federal Arbitration Act (“FAA”) because the drivers were a class of workers engaged in interstate commerce. In support of their arguments, Plaintiffs pointed to data in Massachusetts, where the lawsuit was initially filed, showing the relative frequency that drivers crossed state lines or picked up and dropped off at airports. The District Court rejected those arguments because the nationwide data showed drivers spent the vast majority of their time in a single state. The District Court granted the motion to compel arbitration. It reasoned that the record did not support such a broad interpretation of the interstate commerce exemption. On appeal, the Ninth Circuit affirmed the District Court’s ruling. The Ninth Circuit determined that the ultimate question on appeal was whether drivers were engaged in interstate commerce within the meaning of the FAA; and if the drivers were engaged in interstate commerce, then they were exempt from the FAA and their claims were not subject to mandatory arbitration and they could bring their classification claims in federal court. Citing case law authorities from across the country, the Ninth Circuit agreed drivers were not engaged in interstate commerce and thus their claims were subject to mandatory arbitration under the FAA. First, the Ninth Circuit found the Uber drivers’ services were “primarily local and instrastate in nature.” Id . at 864. It opined that this conclusion remained true even if the drivers sometimes crossed state lines or started and ended their service in different states. Thus, the Ninth Circuit reasoned that “interstate trips, even when combined with trips to the airport, represent a very small percentage of Uber rides, and only occasionally implicate interstate commerce.” Id . The Ninth Circuit further held that when assessing the nationwide data for purpose of the exemption, rather than cherry-picking data from a limited geographic region, it was important to further the “very purpose of the FAA, by which Congress sought to create a national policy favoring arbitration.” Id . at 862. The Ninth Circuit observed that any “alternative approach would potentially produce absurd results whereby the FAA would apply differently to neighboring states, or even neighboring cities in the same state.” Id . For these reasons, the Ninth Circuit affirmed the District Court’s ruling granting Defendant’s motion to compel. Carmona, et al. v. Domino’s Pizza, 2021 U.S. App. LEXIS 38045 (9th Cir. Dec. 23, 2021) . Plaintiffs, a group of delivery drivers, filed a class action alleging that Defendant failed to pay all wages due in violation of the California Labor Code. Defendant filed a motion to compel arbitration of Plaintiffs’ claims pursuant to an arbitration agreement the drivers had signed at the commencement of their employment. The District Court denied the motion, and on appeal, the Ninth Circuit affirmed the District Court’s ruling. The District Court had found that Plaintiffs were exempt from the Federal Arbitration Act (“FAA”) under 9 U.S.C. § 1 because they were transportation workers "engaged in foreign or interstate commerce." Id . at *4. Defendant’s franchises bought various goods to make pizzas from suppliers outside of California, which were delivered by third-parties its Supply Center. At the Supply Center, employees reapportioned, weighed, packaged, and otherwise prepared the goods to be sent to franchisees, which were delivered to the franchises by drivers ("D&S drivers"). Plaintiffs worked as D&S drivers. The Ninth Circuit explained that the residual clause of the FAA applied only if the class of workers was engaged in a "single, unbroken stream of interstate commerce" that rendered interstate commerce a "central part" of their job description. Id . at *5. Defendant did not dispute that the third-parties who delivered goods to the Supply Center were engaged in interstate commerce, but it argued that the D&S drivers who delivered goods to individual franchisees in California were not so engaged because the franchisees placed orders with the Supply Center in the state, and the goods delivered were not in the same form in which they arrived at the Supply Center. Id . at *5-6. The Ninth Circuit disagreed. It held that the D&S drivers operated in a "single, unbroken stream of interstate commerce" that rendered the interstate commerce a "central part" of their job description. Id . at *7. The Ninth Circuit determined that the relevant goods were not transformed into a different form and were procured out-of-state by Defendant to be sold to one of Defendant’s franchises, and therefore, were sufficiently connected to make the drivers exempt from the FAA under the residual clause of § 1. For these reasons, the Ninth Circuit affirmed the District Court’s ruling denying Defendant’s motion to compel arbitration. Emmanuel, et al. v. Handy Technologies, Inc. , 2021 U.S. App. LEXIS 8467 (1st Cir. March 22, 2021). Plaintiff brought a putative class action on behalf of herself and other similarly-situated workers alleging that