Waithaka v. Amazon.com, Inc., 966 F.3d 10

Background

Plaintiff Bernard Waithaka is an AmFlex "last-mile" delivery driver in Massachusetts who accepted Amazon's Independent Contractor Terms of Service that require individual arbitration and contain class-action waivers.
Waithaka never crossed state lines in performing deliveries; the packages he delivered were part of interstate shipments handled earlier in Amazon’s distribution network.
District court held Waithaka’s agreement exempt from the FAA under §1 (transportation-worker exemption), applied Massachusetts law, and ruled the class-waiver/arbitration provisions unenforceable under Massachusetts public policy; Amazon appealed.
The core legal question was whether the FAA §1 residual clause ("any other class of workers engaged in . . . interstate commerce") covers last-mile drivers who perform only intrastate legs of interstate shipments.
The First Circuit held that the §1 exemption covers transportation workers who transport goods or people "within the flow of interstate commerce," even if they do not themselves cross state lines; accordingly the FAA does not apply.
Applying choice-of-law and conflict-of-law rules, the court concluded Massachusetts public policy (Wage Act and anti-waiver provision) would invalidate the class waiver; the class waiver is inseverable, so the arbitration clause is unenforceable under state law.

Issues

Issue	Waithaka's Argument	Amazon's Argument	Held
1. Does FAA §1 exempt last-mile AmFlex drivers?	Drivers are "engaged in interstate commerce" because they transport goods within the interstate flow even if they stay intrastate.	§1 covers only transportation workers who themselves perform interstate (cross‑state) transport.	§1 covers workers who transport goods/people within the flow of interstate commerce; FAA does not apply.
2. What law governs enforceability of the arbitration clause once FAA is inapplicable?	Amazon’s choice-of-law drafting left dispute-resolution law unspecified if FAA inapplicable; Massachusetts law should apply.	Sever FAA language and apply Washington law per the contract’s governing-law and severability clauses.	Strike FAA references; Washington is the contractual fallback choice of law.
3. Would Massachusetts public policy invalidate the class waiver despite the contract’s WA choice?	MA statutes (Wage Act, anti-waiver) embody a fundamental policy protecting class claims; MA law should displace WA law under Restatement §187.	Machado/Feeney require showing arbitration would make claims nonremediable; for higher-value claims MA policy might not bar waiver.	MA has materially greater interest; MA public policy would invalidate the class waiver; WA choice is displaced.
4. If class waiver is invalid, can class arbitration still be compelled?	Invalidating waiver should allow class remedies in arbitration or court.	The Agreement forbids class arbitration and treats the class waiver as inseverable.	The Agreement bars class arbitration and the class-waiver is inseverable; invalid waiver means arbitration provision is unenforceable.

Key Cases Cited

Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (interprets §1 to exempt contracts of transportation workers)
New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) (§1 covers agreements to perform work, including independent contractors)
Seaboard Air Line Ry. v. Moore, 228 U.S. 433 (1913) (intrastate toil on cars destined for other states constituted engagement in interstate commerce)
Philadelphia & Reading Ry. Co. v. Hancock, 253 U.S. 284 (1920) (local movement of interstate shipments is part of interstate commerce)
Ill. Cent. R.R. Co. v. Behrens, 233 U.S. 473 (1914) (distinguishes intrastate movements not connected to interstate shipments)
The Employers' Liability Cases, 207 U.S. 463 (1908) (early FELA precedent informing "engaged in interstate commerce")
Second Employers' Liability Cases, 223 U.S. 1 (1912) (FELA amendment limiting coverage to when employee/carrier were engaged in interstate commerce)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that disfavor arbitration, limiting state public‑policy invalidation of class waivers)
American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013) (class-waiver enforceable under FAA even if individual arbitration makes vindication of statute expensive)
Stolt‑Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010) (class arbitration cannot be compelled absent contract language permitting it)
Machado v. System4 LLC, 989 N.E.2d 464 (Mass. 2013) (Mass. SJC on employment arbitration and class waivers after Concepcion)
Feeney v. Dell, Inc., 908 N.E.2d 753 (Mass. 2009) (Mass. SJC recognizing statutory consumer‑class rights as fundamental public policy prior to Concepcion)