Los Angeles partner Steve Katz recently spoke to Law360 about the implications of a Washington district court ruling which found that that delivery drivers who contracted with Amazon.com Inc. and Amazon Logistics Inc. fit the definition of transportation workers engaged in interstate commerce, and as such are exempt from the Federal Arbitration Act and can pursue their collective wage-and-hour dispute in court.
According to Law360, the narrowly-focused decision signals that courts might mean problems for transportation employers who have long relied on precedents favoring arbitration in employment disputes.
Steve was among several attorneys in the article who cautioned against reading too much into the Amazon decision, which they say the company will surely challenge on appeal.
"The application of New Prime in the [Amazon] decision is straightforward and uncontroversial," said Katz. "The decision illustrates the new focus of litigation over arbitration enforcement in disputes with truckers — not whether the agreement is one 'of employment' under Section 1, but whether the trucker is 'engaged in foreign or interstate commerce."
"If the trucker is not engaged in foreign or interstate commerce, then Section 1 simply cannot apply regardless of New Prime, and the FAA would govern the arbitration agreement," he explained.
"The court's ultimate ruling that there is no law that applies to the arbitration agreement — and therefore that it cannot be enforced under state law — may be the most Kafkaesque judicial opinion I have seen in over 30 years of practice," Katz said. "I am confident that the Ninth Circuit would reverse it if [Amazon] files an appeal."
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