Cunningham v. Lyft, Inc., 450 F.Supp.3d 37

Background

Plaintiffs Melody Cunningham and Frunwi Mancho are Massachusetts Lyft drivers who clicked “I accept” to Lyft’s February 6, 2018 Terms of Service containing an arbitration agreement with a broad class‑action waiver.
Both plaintiffs regularly transported passengers, including airport pick‑ups and some trips that crossed from Massachusetts into New Hampshire.
Lyft moved to compel individual arbitration and stay proceedings under the Federal Arbitration Act (FAA). Plaintiffs opposed, invoking the FAA’s Section 1 transportation‑worker exemption and arguing Massachusetts law bars class‑action waivers for Wage Act claims.
Lyft argued Section 1 applies only to workers who transport goods and that plaintiffs’ interstate activity was incidental; Lyft also argued arbitration is enforceable under Massachusetts law if the FAA does not apply.
The court found (1) Section 1 is not limited to goods transporters and can cover passenger‑transport workers, and (2) the plaintiffs’ airport and cross‑border trips placed them within the Section 1 exemption as workers engaged in interstate commerce.
Because the FAA did not apply, the court applied Massachusetts law and held the class‑action waiver was unenforceable as contrary to Massachusetts public policy for Wage Act claims; the motion to compel arbitration and stay was denied.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Section 1 of the FAA covers workers who transport passengers or is limited to goods transporters	Section 1 covers transportation workers generally, including those who transport passengers	Section 1 is limited to workers who transport goods in interstate commerce	Court: Section 1 is not limited to goods; passenger transporters can fall within the exemption
Whether plaintiffs were engaged in interstate commerce such that Section 1 applies	Airport pick‑ups/last‑or‑first‑leg trips and some cross‑border rides place drivers in the continuity of interstate commerce	Drivers operate locally; any interstate activity is incidental and rare	Court: Applying Lenz factors, airport and cross‑border trips make plaintiffs transportation workers engaged in interstate commerce
Whether the FAA applies to plaintiffs’ arbitration agreements	FAA does not apply because Section 1 exempts these transportation workers	FAA applies and thus federal policy favors enforcing the arbitration clause	Court: FAA does not apply to plaintiffs’ agreements; arbitration cannot be compelled under the FAA
Whether Massachusetts law permits enforcement of the class‑action waiver when FAA does not apply	Feeney I establishes Massachusetts public policy invalidating class‑action waivers for Wage Act claims; thus waiver unenforceable	Concepcion preempts state law only where the FAA applies; if FAA does not apply, waiver should be enforceable or arbitration compelled under state arbitration law	Court: Where FAA does not apply, Feeney I remains controlling; class‑action waiver contravenes Massachusetts public policy and is unenforceable; motion to compel denied

Key Cases Cited

Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1 (Sup. Ct. 1983) (federal policy favors arbitration generally)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (Sup. Ct. 2011) (FAA preempts state rules invalidating class‑action waivers when FAA applies)
New Prime Inc. v. Oliveira, 139 S. Ct. 532 (Sup. Ct. 2019) (Section 1 exemption limits courts’ power to compel arbitration for transportation workers)
Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (Sup. Ct. 2001) (Section 1 construed narrowly to cover transportation workers)
Feeney v. Dell Inc., 454 Mass. 192 (Mass. 2009) (Feeney I) (Massachusetts public policy disfavors class‑action waivers for certain statutory claims)
Machado v. System4 LLC, 465 Mass. 508 (Mass. 2013) (applying public‑policy reasoning to Wage Act class actions)
Singh v. Uber Techs., Inc., 939 F.3d 210 (3d Cir. 2019) (interpreting Section 1 to include passenger transportation workers)
Lenz v. Yellow Transp., Inc., 431 F.3d 348 (8th Cir. 2005) (factors for determining whether a worker is engaged in interstate commerce)
Waithaka v. Amazon.com, Inc., 404 F. Supp. 3d 335 (D. Mass. 2019) (last‑mile delivery drivers held within Section 1 exemption)