Amazon pushed a Ninth Circuit panel on Monday to find its contracted driver-partners must arbitrate their labor grievances rather than file, a decision that could have a lasting effect on trucking companies as it may force the court to define the boundaries of interstate commerce.
Just over a year ago, the United States Supreme Court held that a trucking company could not compel it’s independent contractor drivers to arbitrate their wage complaints against the company as they found Congress intended to exempt all interstate transportation workers from the Federal Arbitration Act (New Prime Inc. v. Oliveira).
Lawyers on both sides sparred over whether this same exemption applies to workers who deliver packages solely within a city or state, and whether drivers who almost never leave the state are still considered to be“engaged in foreign or interstate commerce.”
Apparently, from Amazon’s standpoint, it makes no difference where the package originated. If it’s picked up and delivered locally, the driver isn’t covered by the arbitration exemption.
“Local delivery drivers are not exempt interstate commerce workers, whether they are employed by a large company like Amazon or a small company like a mom and pop store close by,” Amazon attorney David Salmons told the panel, comprising U.S. Circuit Judges Milan Smith, N. Randy Smith and Daniel Bress. Both Smiths are George W. Bush appointees, Bress was appointed by Donald Trump.
“What you focus on is the activities that the worker is engaged to perform. They pick up in their local area, they deliver in their local area, and the path of the goods before they pick it up is entirely happenstance from their point of view,” Salmons said.
This case was brought by Bernadean Rittman, a Seattle contractor with Amazon. His case, and many others accuse Amazon of misclassifying delivery drivers as independent contractors, denying them overtime-pay and other benefits available to regular employees.
Salmons argued that the contractors were unlike the independent contractors involved in the New Prime v. Oliveira as Rittman and the rest of the contractors operate more like pizza delivery drivers.
Judge Milan Smith disagreed. “The local pizza parlor may only be in business in that state. But Amazon is the one of the biggest companies in the United States, maybe in the world,” he said. “What the employer does and the nature of its business is critical, is it not?”
“Where does the stream of interstate commerce end? You got a package from a merchant in New York through Amazon and they deliver it to the local folks. Does it end when the independent contractor delivers it to the person who bought it?” Judge Smith asked.
It raises some serious questions regarding the boundaries set with interstate commerce.