Delivery Drivers Compelled to Arbitrate

Last week, the Massachusetts Supreme Court held in favor of Grubhub, in the matter of Archer v. Grubhub, Inc., by applying the narrow interpretation of “exempt workers” engaging in “interstate commerce” under the Federal Arbitration Act (FAA). In 2017, Grubhub, Inc. electronically sent an arbitration agreement to all of its employees. The agreement contained language that the employee agreed to arbitrate claims brought against the company regarding retaliation, wage and compensation, and that the agreement was to be governed by the FAA. In 2019, Grubhub workers filed suit against the company alleging claims under the Wage Act, Tips Act, and Minimum Wage Act, as well as a retaliation claim. In 2020, the company filed its motion to dismiss the action and a motion to compel arbitration enforceable under the FAA. The trial court denied the motions and held that because the nature of employment consisted of transporting and delivering goods that may have originated outside of Massachusetts, the workers fell within the exemption of being involved in interstate commerce under the FAA. Grubhub appealed to the Massachusetts Supreme Court.

At the Supreme Court, Grubhub argued the narrow exemption under the FAA only applies to those “workers engaged in foreign or interstate commerce,” namely, “contracts of employment of seamen,” or “railroad employees.” The court looked to the language in the statute and defined transportation workers as those “actually engaged in the movement of goods in interstate commerce.” The Grubhub workers were compared to those involved in the trucking industry whose main duty was to transport goods across state lines. In further comparison, similar cases have been brought in the Seventh Circuit, where Grubhub workers were considered transportation workers but not held to have engaged in interstate commerce. The Massachusetts Supreme Court relied on strict statutory interpretation and precedent in its conclusion that the Grubhub workers were not connected to moving those goods across state or national borders.

We’re in New England. What about those drivers, cities, or towns that fall on the state lines? The Massachusetts Supreme Court began its interpretation of the statute by looking to the plain language, which states it applies to “a class of workers.” It held that based on this language, the statute applied to the class itself and not an individual employee. Thus, if the class is engaged in interstate commerce, then so is the individual, but not the other way around. Overall, because the delivery drivers delivered food to and from local restaurants, eateries and convenience stores, it was not enough to find the “class” was engaging in interstate commerce. 

This decision upholds the purpose of the FAA and the judicial backing of enforcing arbitration agreements. In this new era of delivery and ease on consumers, Grubhub delivery drivers, and similar delivery services of the like, such as Uber and DoorDash, will be compelled to arbitrate their claims.

If you have questions about this topic, or any other general employment issues, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.