524 F.Supp.3d 251
S.D.N.Y.2021Background
- Plaintiffs are present and former Uber Black Car drivers in NYC who signed Uber’s Software License Agreement/Technology Services Agreement and did not opt out of an arbitration provision.
- Plaintiffs sued for breach of contract (alleging unlawful deductions of sales tax/BCF surcharge and withholding excess from "Upfront Pricing") and sought class treatment under Fed. R. Civ. P. 23.
- Uber moved to compel arbitration under the Federal Arbitration Act (FAA); Plaintiffs sought limited discovery about interstate trips and moved to resist arbitration under FAA § 1 (the § 1 residual exemption for certain transportation workers).
- Plaintiffs alleged some interstate trips (e.g., ~4–20% of trips/income for named plaintiffs in sample periods) and cited Uber policies (airport pricing, NJ surcharge, app adjustments) as showing interstate commerce involvement.
- The Court concluded the question of § 1 applicability could be decided on the complaint, denied Plaintiffs’ discovery motion, held Plaintiffs’ class is not a class of workers “engaged in interstate commerce,” found a valid arbitration agreement, and compelled arbitration; the case was dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs’ class is exempt from the FAA under § 1 as a class of workers "engaged in interstate commerce" | Plaintiffs: NYC Uber drivers routinely perform interstate trips and connect passengers to interstate/international hubs; individual trip statistics show significant interstate activity | Uber: Drivers’ work is predominantly intrastate; occasional interstate trips are incidental; § 1 is narrow and applies only where interstate movement is central to the class’s job | Held: Plaintiffs are not a class of workers engaged in interstate commerce; § 1 does not apply |
| Whether limited discovery on interstate trips is warranted before deciding arbitrability | Plaintiffs: discovery needed to show classwide interstate activity | Uber: complaint and incorporated documents suffice; no discovery necessary | Held: Denied — court can decide § 1 issue on the complaint |
| Whether parties entered into a valid arbitration agreement | Plaintiffs: (did not dispute) | Uber: Plaintiffs accepted agreements containing a broad arbitration clause and didn’t opt out | Held: Valid arbitration agreement exists |
| Whether Plaintiffs’ claims fall within the scope of the arbitration clause (including NYLL claims) | Plaintiffs: seek statutory wage claims; argued case-specific defenses to arbitration | Uber: arbitration clause broadly covers disputes relating to the agreement and wage-hour statutes | Held: Claims (including NYLL) fall within the arbitration provision and must be arbitrated |
Key Cases Cited
- Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir.) (FAA preemption and arbitration principles)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (federal policy favoring arbitration)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (arbitration agreements enforceable according to their terms)
- New Prime Inc. v. Oliveira, 139 S. Ct. 532 (U.S. 2019) (courts must decide § 1 applicability before compelling arbitration)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (U.S. 2001) (§ 1 residual clause limited by ejusdem generis to transportation workers)
- Wallace v. Grubhub Holdings, Inc., 970 F.3d 798 (7th Cir. 2020) (interstate movement must be central to class’s job for § 1 exemption)
- Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020) (last-mile delivery workers can be engaged in interstate commerce depending on business context)
- Singh v. Uber Techs. Inc., 939 F.3d 210 (3d Cir. 2019) (guidance on showing industry/class-level interstate commerce for § 1)
- Rittman v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020) (§ 1 can cover workers moving goods within flow of interstate commerce)
- United States v. Yellow Cab Co., 332 U.S. 218 (U.S. 1947) (local taxi service’s relation to interstate transit is often incidental and not integral)