18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 747 transportation provided by the airlines and the local intrastate transportation provided by Defendant’s drivers made sense when defining the nature of activity in which Plaintiffs were engaged. Id . at *13. The First Circuit reasoned that Plaintiffs would not allege that they were engaged in interstate trucking merely because they sometimes gave truck drivers rides to and from their garages, and thus it declined to find that Plaintiffs were engaged in interstate travel merely because they drove passengers to and from an airport. Id . In addition, the First Circuit opined that since only 2% of Defendant’s rides nationwide crossed state lines, the vast majority of class members never provided an interstate ride at all. Id . at *16. The First Circuit therefore held that Plaintiffs were not exempt from arbitration under § 1 of the FAA. For these reasons, the First Circuit reversed and remanded the District Court’s ruling denying Defendant’s motion to compel arbitration. Haider, et al. v. Lyft, Inc ., 2021 U.S. Dist. LEXIS 62690 (S.D.N.Y. March 31, 2021). Plaintiff filed a class action alleging that Defendant illegally collected state taxed from his pay. Defendant moved to compel arbitration of Plaintiff’s claims pursuant to an agreement that he signed when he began working for Defendant. Plaintiff contended that he was exempt from the Federal Arbitration Act (“FAA”) by the transportation worker exemption and therefore could not be compelled to submit his claim to arbitration. The Court agreed with Plaintiff and denied Defendant’s motion to compel. Although Plaintiff was based in New York City, he contended that he typically took about four fares each week between New York and New Jersey and made about two trips per month between New York and Connecticut. Id . at *3. In total, Plaintiff estimated that 4% to 5% of his fares involved travel across state lines, and since the rides were longer, about 20% of his total income. Defendant permitted drivers to drop passengers off up to 100 miles outside the driver’s coverage area. Defendant’s fare schedule included a $20 surcharge for trips between New York and New Jersey, plus an additional $19 for trips starting in New Jersey that cross the Verrazzano-Narrows Bridge into Brooklyn. Id . at *4. The Court noted that the decisional law of the U.S. Supreme Court has offered guidance on scope of § 1 by holding that it exempts "any contract for the performance of work by workers" engaged in interstate commerce including independent contractors. Id . at *6. The Court noted that Defendant marketed its service as one allowing interstate travel, and its drivers crossed state lines on more days than not. Thus Court thus concluded that Defendant’s drivers were engaged in interstate commerce, and that they fell within the FAA’s exemption for contracts of employment of transportation workers. Id . at *7-8. The Court also opined that simply because the drivers did not cross state lines all the time did not mean that § 1 did not apply, as "there is no basis in the text of § 1 for drawing a line between workers who do a lot of interstate transportation work and those who cross state lines only rarely." Id . at *11. For these reasons, the Court denied Defendant’s motion to compel arbitration. Islam, et al. v. Lyft, Inc., 2021 U.S. Dist. LEXIS 43839 (S.D.N.Y. March 9, 2021). Plaintiff, a rideshare driver, filed a class action alleging that Defendant’s practice of logging its drivers off of the Lyft app for performing too few rides violated the contract between the parties. Defendant moved to compel arbitration of Plaintiff’s claims pursuant to an arbitration provision contained in the parties’ independent contractor agreement. The Court granted the motion. Plaintiff argued that he was exempt from arbitration under § 1 of the exemption to the Federal Arbitration Act (“FAA”) for "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Id . at *2. The Court agreed with Plaintiff that, on the basis of information already in the record, he belonged to a class of workers engaged in interstate commerce, and therefore the FAA did not apply to his contract. The Court, however, determined that state law provided an alternate basis to compel arbitration. Plaintiff contended that he typically crossed state lines for his work on a weekly basis, and that interstate trips constituted about 4% to 5% of his trips. Defendant argued that rideshare transportation was inherently local in nature, which was evidenced by the fact that rideshare services were regulated on the city and state levels, with drivers in each city following a different set of local rules. Id . at *26- 27. The Court rejected Defendant’s arguments. It opined that the fact that only 2% to 3% of Lyft and Uber rides cross state lines did not render those trips "incidental." Id. at *27. The Court noted that if one in 50 of an active driver’s trips cross state lines, an individual driver would still expect to cross state lines with some frequency. Accordingly, the Court found that Plaintiff qualified for the exemption as a worker involved in interstate commerce. However, the Court noted that the contract’s arbitration clause stated, “this Agreement shall be governed by the laws of the State of California without regard to choice-of-law principles." Id . at *40-41. The Court explained that as a general matter, the inapplicability of the FAA did not render an arbitration clause void when it is otherwise enforceable under state law. Accordingly, the Court held that there was nothing improper