460 F.Supp.3d 191
D. Conn.2020Background
- Plaintiffs Neal Bissonnette and Tyler Wojnarowski are franchisee distributors who purchased and resold Flowers Foods products under Distribution Agreements that classify them as independent contractors.
- Plaintiffs pick up bakery products delivered to local warehouses and deliver and merchandize those products to retail customers in Connecticut; they allege they work ~40 hours/week delivering and performing territory sales/service duties.
- Each Distribution Agreement incorporates an Arbitration Agreement (Ex. K) requiring FAA arbitration, contains a delegation clause, and includes a broad class/collective-action waiver.
- Plaintiffs sued under the FLSA and Connecticut wage laws asserting misclassification and unpaid wages; Defendants moved to dismiss or, alternatively, to compel arbitration.
- Plaintiffs argued they fall within Section 1 of the FAA (the transportation-worker exemption) and so cannot be compelled to arbitrate; Defendants argued the exemption does not apply and arbitration must be compelled.
- The Court held Plaintiffs are not transportation workers under Section 1 of the FAA, compelled arbitration, granted dismissal in favor of arbitration, and closed the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of FAA §1 (transportation-worker exemption) | Plaintiffs are "last-mile" drivers delivering goods that traveled in interstate commerce and thus fall within the exemption | Plaintiffs perform broader franchisee sales/business duties (not purely transportation) and contracts permit delegation; exemption thus inapplicable | Plaintiffs are not transportation workers under §1; FAA applies and arbitration is required |
| Who decides arbitrability given a delegation clause | Delegation clause exists but FAA applicability is for court to decide; Plaintiffs relied on exemption to avoid arbitration | Defendants invoked delegation and arbitration clauses to have arbitrator decide arbitrability | Court decided FAA applicability (per New Prime) and resolved §1 issue for itself, then compelled arbitration |
| Use of Connecticut law to compel arbitration if FAA inapplicable | Plaintiffs contended Connecticut law might prevent enforcement of FAA-based arbitration | Defendants argued state law supports arbitration and no analogous transportation exemption exists in CT | Court declined to rely on state law to compel arbitration if FAA exempted plaintiffs; because FAA applied, compelled arbitration under FAA |
| Enforceability of class-action waiver | Plaintiffs argued waiver unenforceable under Connecticut public policy | Defendants urged waiver is valid and arbitration should proceed individually | Court did not separately invalidate waiver; arbitration compelled and class/collective relief foreclosed by the Arbitration Agreement |
Key Cases Cited
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (interpreting FAA §1 residual clause as limited to transportation workers)
- New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) (Section 1 exemption covers independent contractors; courts decide §1 applicability)
- Doctor’s Assocs., Inc. v. Alemayehu, 934 F.3d 245 (2d Cir. 2019) (federal policy favoring arbitration and analysis of arbitration agreements)
- Lenz v. Yellow Transp., Inc., 431 F.3d 348 (8th Cir. 2005) (multi-factor approach for transportation-worker analysis)
- Adams v. Suozzi, 433 F.3d 220 (2d Cir. 2005) (narrow scope of transportation-worker exemption)
- Kowalewski v. Samandarov, 590 F. Supp. 2d 477 (S.D.N.Y. 2008) (analysis distinguishing workers one step removed from physical delivery of goods)