971 F.3d 904
W.D. Wash.2020Background
- Plaintiffs are AmFlex (Amazon Flex) delivery providers who pick up packages from Amazon facilities and make ‘‘last‑mile’’ deliveries using personal vehicles, bikes, or public transit; most deliveries are intrastate and drivers sometimes deliver restaurant or grocery orders.
- Raef Lawson signed AmFlex’s Independent Contractor Terms of Service (TOS) and did not timely opt out of its arbitration clause; other named plaintiffs opted out and are not at issue here.
- The TOS’s Section 11 contains an arbitration provision and states Section 11 is governed by the Federal Arbitration Act (FAA); the TOS otherwise selects Washington law.
- The district court denied Amazon’s motion to compel arbitration, holding AmFlex drivers fall within the FAA §1 exemption for ‘‘seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,’’ and concluding no valid arbitration agreement could be enforced.
- The Ninth Circuit affirmed: it held AmFlex drivers are transportation workers ‘‘engaged in interstate commerce’’ even if they do not themselves cross state lines, and rejected Amazon’s arguments that the FAA (by contract) or Washington law can be applied to compel arbitration.
- Judge Bress dissented, arguing §1 should cover only classes of workers who actually cross state lines in the course of their deliveries; he would have compelled arbitration.
Issues
| Issue | Plaintiff's Argument (Lawson) | Defendant's Argument (Amazon) | Held |
|---|---|---|---|
| Whether AmFlex drivers fall within FAA §1 exemption (‘‘class of workers engaged in foreign or interstate commerce’’) | AmFlex drivers deliver goods that remain in the stream of interstate commerce (packages originate out of state), so §1 applies even if drivers do not cross state lines | Last‑mile deliveries are purely intrastate; §1 requires that workers themselves cross state lines to be ‘‘engaged in interstate commerce’’ | Held: §1 covers transportation workers who move goods in interstate commerce even if they do not cross state lines; AmFlex drivers are exempt from FAA enforcement provisions |
| Whether parties’ choice‑of‑law clause (Section 11 governed by FAA and federal law) can make the FAA apply despite §1 exemption | N/A (Lawson argues FAA does not apply) | The parties contracted for the FAA to govern Section 11, so the FAA should be enforced by agreement | Held: Parties cannot contract around §1; because §1 removes FAA coverage, the choice‑of‑FAA clause does not resurrect FAA enforcement |
| Whether Washington law can govern or salvage arbitration (severability / choice‑of‑law) | N/A | If FAA does not apply, sever the choice‑of‑FAA clause so Washington law governs and arbitration can be enforced | Held: Court will not rewrite the contract; severing to import Washington law would impermissibly rewrite the TOS and ambiguities are construed against drafter (Amazon); no valid enforceable arbitration under Washington law established |
| Proper statutory construction of ‘‘engaged in interstate commerce’’—must worker cross state lines? | ‘‘Engaged in’’ need not mean the individual crosses state lines; ordinary meaning and precedent treat intrastate last‑mile deliveries of interstate shipments as part of interstate commerce | ‘‘Engaged in’’ should be read narrowly to require that the class of workers cross state lines in carrying out deliveries; otherwise §1 would swallow FAA’s pro‑arbitration purpose | Held: The phrase does not require the individual worker to cross state lines; court relied on statutory meaning at enactment, related precedents, and analogous statutes to read §1 to include last‑mile workers whose deliveries are part of interstate shipments |
Key Cases Cited
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (§1 is a narrow exemption covering only transportation workers; ‘‘engaged in commerce’’ is narrower than ‘‘involving commerce’’)
- New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) (use ordinary meaning at enactment to interpret FAA provisions)
- Harden v. Roadway Package Sys., Inc., 249 F.3d 1137 (9th Cir. 2001) (delivery drivers who contract to deliver packages nationwide fall within §1 exemption)
- Palcko v. Airborne Express, Inc., 372 F.3d 588 (3d Cir. 2004) (supervisory employees closely related to interstate package transport may be covered because their work is ‘‘practically a part of’’ interstate commerce)
- Shanks v. Delaware, Lackawanna & W. R.R. Co., 239 U.S. 556 (1916) (FELA approach: ‘‘engaged in interstate transportation’’ includes intrastate acts that are part of continuous interstate movement)
- A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (discusses when goods have ‘‘come to rest’’ and thus left interstate commerce)
- Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S. 186 (1974) (‘‘engaged in commerce’’ denotes activities within the flow of interstate commerce; used to delimit statutory reach)
- United States v. American Bldg. Maint. Indus., 422 U.S. 271 (1975) (similar limitations on ‘‘engaged in commerce’’ in other statutory contexts)
- Singh v. Uber Techs., Inc., 939 F.3d 210 (3d Cir. 2019) (residual clause may apply to transportation of passengers if drivers cross state lines or are closely related to interstate transport)
- Lenz v. Yellow Transp., Inc., 431 F.3d 348 (8th Cir. 2005) (§1 does not cover employees whose duties are only tangentially related to interstate movement)