54 F.4th 67
1st Cir.2022Background
- Postmates operates a platform connecting customers to local restaurants and retailers and dispatches couriers to deliver orders; nearly all Massachusetts deliveries (99.66%) are intrastate and average ~3.7 miles.
- Couriers agree to a Fleet Agreement classifying them as independent contractors and containing a mutual FAA-governed arbitration clause with a class/representative-action waiver (couriers may opt out within 30 days).
- Plaintiffs (Immediato, Levine, Wickberg), Boston-area couriers, sued in Massachusetts state court claiming misclassification and violations of Massachusetts wage-and-hour and expense-reimbursement laws; Postmates removed and moved to compel arbitration.
- The district court compelled arbitration under the FAA and dismissed after individual offers of judgment were accepted; plaintiffs appealed claiming they are exempt from the FAA under 9 U.S.C. § 1.
- The First Circuit considered whether couriers are part of a class of "transportation workers engaged in foreign or interstate commerce" (§ 1 exemption) and whether the Fleet Agreement otherwise falls under § 2's coverage.
- Holding: the couriers are not § 1 exempt because their deliveries fulfill separate intrastate retail transactions; the Fleet Agreement falls within § 2, so the FAA applies and arbitration was properly compelled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether couriers are "transportation workers engaged in foreign or interstate commerce" (§ 1) | Couriers perform the intrastate leg of interstate shipments; goods remain in interstate commerce until delivered to consumers; Waithaka controls, so couriers are exempt | Couriers deliver goods purchased from local vendors after interstate movement has ended; their work is separate intrastate commerce and not necessary to interstate movement | Not exempt under § 1; couriers perform intrastate deliveries that are not a constituent part of interstate movement |
| Whether the Fleet Agreement is covered by the FAA (§ 2) | If not § 1 exempt, plaintiffs argue contracts nonetheless do not "involve" interstate commerce and thus fall outside § 2 | "Involving commerce" is broader than "engaged in commerce"; local retail deliveries substantially affect interstate commerce, so § 2 applies | Contracts "involve" interstate commerce and are covered by § 2; FAA applies and arbitration may be compelled |
Key Cases Cited
- Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020) (held last-mile Amazon drivers were § 1 transportation workers)
- Sw. Airlines Co. v. Saxon, 142 S. Ct. 1783 (U.S. 2022) (§ 1 residual clause applies to transportation workers who play a necessary role in interstate movement)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (U.S. 2001) (interpretive guidance for § 1 residual clause; ejusdem generis principle)
- New Prime Inc. v. Oliveira, 139 S. Ct. 532 (U.S. 2019) ("contracts of employment" construed broadly; courts must consider § 1 when assessing § 2 coverage)
- Cunningham v. Lyft, Inc., 17 F.4th 244 (1st Cir. 2021) (rideshare drivers to/from airport not § 1 transportation workers; distinguishes first- and second-scenario Yellow Cab analyses)
- United States v. Yellow Cab Co., 332 U.S. 218 (U.S. 1947) (distinguished between local transport integral to interstate journeys and incidental local service)
- Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (U.S. 1995) (§ 2 extends to contracts "involving commerce" to the full extent of Congress's commerce power)
- A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (U.S. 1935) (goods held for local disposition are not "in interstate commerce")
- Am. Bldg. Maint. Indus. v. United States, 422 U.S. 271 (U.S. 1975) (local retail/distribution of previously interstate goods not "in commerce" in related statutory contexts)
- Wallace v. Grubhub Holdings, Inc., 970 F.3d 798 (7th Cir. 2020) (couriers delivering for local retail transactions are not § 1 transportation workers)
- Archer v. Grubhub Inc., 190 N.E.3d 1024 (Mass. 2022) (state-court decision reaching similar conclusion re: local-delivery couriers)