939 F.3d 210
3rd Cir.2019Background
- Jaswinder Singh sued Uber (putative class) in New Jersey alleging misclassification as independent contractors and wage-law violations; Uber removed and moved to dismiss and compel arbitration under the Rasier Software Sublicense Agreement (which contains an arbitration provision and a delegation clause).
- Singh opposed, arguing among other things that the Federal Arbitration Act (FAA) does not apply because §1 exempts “contracts of employment” of “any other class of workers engaged in foreign or interstate commerce” and that discovery was needed on whether drivers are engaged in interstate commerce.
- The District Court compelled arbitration, holding the §1 residual clause does not cover transportation workers who transport passengers (only goods), and found the delegation clause enforceable.
- On appeal the Third Circuit held that §1 is not limited to goods‑transporters and may cover passenger‑transporting workers if they are engaged in interstate commerce or in work closely related thereto.
- Because the complaint and incorporated documents did not resolve whether Singh’s class is engaged in interstate commerce, the Third Circuit vacated and remanded for limited discovery on that question and directed the District Court to apply a summary‑judgment standard if Uber renews its motion; the court left other challenges (Seventh Amendment, NLRA/Norris‑LaGuardia, unconscionability) for the District Court to address after resolving FAA applicability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of §1 residual clause — goods vs. passengers | §1 can cover drivers who transport passengers | §1 is limited to workers who move goods in interstate commerce | §1 is not limited to goods; may cover passenger transporters if engaged in interstate commerce or work closely related to it |
| Whether Singh’s class is “engaged in … interstate commerce” (§1) | Singh proffered affidavit alleging interstate trips and requested discovery | Uber argued drivers operate locally and FAA governs; delegation clause delegates arbitrability | Pleadings insufficient to resolve; remand for limited discovery on interstate‑commerce question; apply summary‑judgment standard if motion renewed |
| Standard for resolving FAA‑applicability and motion to compel (Guidotti) | When facts are disputed, plaintiff is entitled to limited discovery and a Rule 56 standard | If agreement to arbitrate is apparent, Rule 12(b)(6) standard applies | Third Circuit applies Guidotti: use Rule 12 where pleadings suffice; otherwise allow restricted discovery and then Rule 56 |
| Delegation clause/enforceability | Singh challenged enforceability and scope of delegation clause | Uber argued valid delegation clause requires arbitrator to decide threshold issues | Court did not resolve all challenges; held that New Prime requires courts to decide whether §1 exclusion applies; if FAA applies then valid delegation clauses govern other arbitrability questions and those go to arbitrator |
Key Cases Cited
- Tenney Eng’g, Inc. v. United Elec. Radio & Mach. Workers, 207 F.2d 450 (3d Cir. 1953) (en banc) (interpreting §1 residual clause via ejusdem generis to focus on transportation‑related workers)
- Amalgamated Ass’n of St., Elec. Ry. & Motor Coach Emps. v. Pennsylvania Greyhound Lines, 192 F.2d 310 (3d Cir. 1951) (holding bus‑line employees fall within §1 exemption)
- Pa. Greyhound Lines v. Amalgamated Ass’n of St., Elec. Ry. & Motor Coach Emps., 193 F.2d 327 (3d Cir. 1952) (same)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (Supreme Court: §1’s residual clause limited to transportation workers)
- New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) (Supreme Court: courts must decide whether §1 exclusion applies even if a delegation clause exists)
- Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013) (framework for deciding whether a motion to compel is adjudicated under Rule 12 or Rule 56 and when limited discovery is appropriate)
- Rent‑A‑Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (delegation clauses are severable and may assign arbitrability questions to arbitrators)
