Ouadani v. TF Final Mile LLC
876 F.3d 31
| 1st Cir. | 2017Background
- Ouadani worked as a delivery driver for Dynamex (now TF Final Mile) from March–August 2016; Dynamex required him to “associate” with an affiliated vendor, Selwyn and Birtha Shipping LLC (SBS), which paid him.
- Ouadani never signed any contract with Dynamex or SBS and was unaware of the written Independent Contractor Agreement between Dynamex and SBS that contained a mandatory arbitration clause.
- Dynamex controlled work details: issued uniform and badge, provided schedule, assignments, e-mail account and delivery instructions; payments flowed from Dynamex to SBS, then deductions, then to Ouadani.
- After complaining in August 2016 that he lacked contractor independence and should be treated as an employee, Ouadani was removed from the schedule (terminated).
- Ouadani sued Dynamex in federal court asserting wage-and-hour and retaliation claims; Dynamex moved to compel arbitration under the Dynamex–SBS Agreement.
- The district court denied the motion because Ouadani was a nonsignatory who neither knew of nor signed the Agreement; Dynamex appealed, invoking federal common‑law doctrines (agency, equitable estoppel, third‑party beneficiary).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a nonsignatory plaintiff (Ouadani) is bound to arbitrate under the Dynamex–SBS Agreement via agency | Ouadani did not sign or know of the Agreement and brings claims on his own behalf, not as SBS’s agent | Dynamex: the arbitration clause covers disputes brought by "any agent" of SBS, so Ouadani (an agent of SBS) should arbitrate | Court: Rejected — agency theory inapt because Ouadani’s claims are personal, not claims brought as an agent acting on behalf of SBS |
| Whether equitable estoppel binds Ouadani to the arbitration clause | Ouadani: he never embraced or knew of the Agreement; his claims do not require reliance on the Agreement | Dynamex: Ouadani knowingly obtained benefits under the Agreement by performing contracted services and thus should be estopped from avoiding arbitration | Court: Rejected — estoppel does not apply where the nonsignatory did not knowingly exploit or embrace the contract; Ouadani’s claims arise from his relationship with Dynamex, not solely from the Agreement |
| Whether Ouadani is an intended third‑party beneficiary of the Agreement and thus bound to arbitrate | Ouadani: Agreement shows no intent to confer specific legal rights on him; no written subcontractor agreement was obtained as required by the Agreement | Dynamex: subcontractor‑binding provisions and the practical role of drivers imply they are intended beneficiaries | Court: Rejected — no clear manifestation of intent to confer specific legal rights on Ouadani; the Agreement’s mechanism required written assent from subcontractors, which was not obtained |
| Whether the arbitration clause otherwise covers Ouadani’s claims | Ouadani: never agreed and claims don’t depend on the Agreement | Dynamex: FAA favors arbitration and clause broadly covers wage‑hour disputes | Court: Arbitration policy does not override mutual assent; Dynamex failed to show Ouadani agreed to arbitrate |
Key Cases Cited
- InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003) (sets out federal‑common‑law doctrines for binding nonsignatories to arbitration)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA embodies liberal federal policy favoring arbitration)
- Stolt‑Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (arbitration is based on consent; cannot compel arbitration without agreement)
- AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643 (1986) (party cannot be forced to arbitrate disputes it has not agreed to submit)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (FAA applies to written arbitration agreements affecting interstate commerce)
- Grand Wireless, Inc. v. Verizon Wireless, Inc., 748 F.3d 1 (1st Cir. 2014) (distinguishable precedent where nonsignatory defendants compelled arbitration against signatory plaintiffs because claims arose from agents’ conduct and principal intended to protect agents)