Jones v. UPS Supply Chain Solutions CA1/3
A160726
Cal. Ct. App.Jul 1, 2021Background:
- Plaintiffs Sue and Robert Jones (Arizona residents) worked as delivery drivers for UPS Supply Chain Solutions (SCS); Sue signed an arbitration agreement in 2014 that included a class-action waiver and invoked the FAA.
- In 2019 the Joneses sued SCS in California as a putative class action alleging wage-and-hour violations and related claims on behalf of current and former drivers.
- SCS moved to compel arbitration, arguing the FAA applies; the Joneses argued they fall within the FAA §1 exemption for "any other class of workers engaged in foreign or interstate commerce."
- Evidence conflicted: SCS presented company records indicating only intrastate (Arizona) deliveries; the Joneses submitted sworn declarations stating they regularly made deliveries from Arizona to California, Texas, New Mexico, and to SCS warehouses/clients out-of-state.
- The trial court credited the Joneses’ declarations, found substantial evidence they made interstate deliveries (and alternatively that their intrastate work was in the flow of interstate commerce), denied the motion to compel arbitration, and the Court of Appeal affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA §1 transportation-worker exemption applies | Jones: they made deliveries across state lines (and/or their intrastate work was the last leg of interstate movement) | SCS: records show only intrastate work; Jones do not qualify as engaged in interstate commerce | Court: exemption applies — trial court reasonably credited Joneses’ declarations showing interstate deliveries; affirmed |
| Who bears burden to prove exemption | Jones: opposing party must prove exemption to avoid arbitration | SCS: contends movant to compel arbitration must show FAA applies and exemption not met | Court: party claiming exemption bears burden, but trial court properly applied law and weighed evidence; no error in outcome |
| Whether intrastate deliveries can qualify (flow/continuity theory) | Jones: even intrastate deliveries can be exempt if they are part of continuous interstate movement (Nieto) | SCS: goods stored in SCS warehouses are at "rest," so interstate movement ends | Court: did not need to decide on flow theory because interstate deliveries were found; noted Nieto and similar authorities as persuasive on continuity theory |
| Consideration of evidence submitted after denial (reconsideration/new facts) | Jones: trial court’s ruling stands on evidence before it | SCS: asked appellate court to consider new evidence submitted on reconsideration | Court: declined to consider evidence not before trial court; appellate review limited to trial record |
Key Cases Cited
- New Prime, Inc. v. Oliveira, 139 S. Ct. 532 (2019) (Supreme Court recognizes §1 exemption applies to transportation workers engaged in interstate commerce)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (interprets §1 to exempt only workers actually engaged in movement of interstate commerce)
- Nieto v. Fresno Beverage Co., Inc., 33 Cal. App. 5th 274 (2019) (intrastate delivery drivers can be exempt when they perform the final leg of continuous interstate transport)
- Muller v. Roy Miller Freight Lines, LLC, 34 Cal. App. 5th 1056 (2019) (discusses tests for establishing engagement in interstate commerce)
- Performance Team Freight Systems, Inc. v. Aleman, 241 Cal. App. 4th 1233 (2015) (party claiming §1 exemption bears the burden to prove it)
- Engalla v. Permanente Medical Group, Inc., 15 Cal. 4th 951 (1997) (describes burdens in arbitration motions and opposing proofs)
- Rittman v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020) (addresses whether intrastate warehouse-to-customer deliveries are part of interstate commerce)
- A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (discusses when goods reach "permanent rest," relevant to continuity/flow analysis)