Litigation and Contractual Arbitration in Interstate Commerce
Plaintiffs — often in their roles as contractors, employees, and consumers — frequently enter in contracts that include arbitration provisions. Courts in Colorado and across the country are routinely granting defendants’ motions to compel arbitration, in an attempt to lessen the taxation on their resources for certain disputes. However, the success of this movement has reached a roadblock when it comes to certain transportation workers that cross state
(January 2025) Plaintiffs — often in their role as contractors, employees, and consumers — frequently enter in contracts that include arbitration provisions. Courts in Colorado and across the country are routinely granting defendants’ motions to compel arbitration, in an attempt to lessen the taxation on their resources for certain disputes. However, the success of this movement has reached a roadblock when it comes to certain transportation workers that cross state lines.
The Federal Arbitration Act (FAA) exempts transportation workers engaged in interstate commerce. These workers may file suit in state or federal court outside the bounds of arbitration. Courts nationwide are trending toward holdings that classify certain loads as interstate commerce, which allows the exemption to block these attempts.
In November 2024, the U.S. Court of Appeals for the Tenth Circuit ruled that an independent distributor who delivered baked goods to various Colorado retail stores was engaged in interstate commerce. Brock v. Flowers Foods, No. 23-1182 (10th Cir. 2024). Because the baked goods were ordered from out-of-state bakeries, where the driver picked up the products to transport to retail stores, the Court determined he was a “last-mile” driver, and thus directly engaged in interstate commerce.
This ruling from the Tenth Circuit follows similar rulings in the Ninth Circuit and First Circuit that expand the definition of a worker that is “engaged in interstate commerce.” The Ninth Circuit found in July 2024 that a fuel technician’s role in fueling airplanes caused him to fall within this exemption, even though he never crossed state lines during his work. Lopez v. Aircraft Service Int’l, Inc., 107 F.4th 1096 (9th Cir. 2024). The First Circuit decided “last mile” delivery drivers were exempt under the FAA because they were furthering the transport of goods within the flow of interstate commerce, even though they did not physically cross state lines. Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020).
These rulings do not infringe on various courts’ findings that individuals operating in intrastate travel, such as delivery food drivers and ride-share drivers, may be compelled to submit to arbitration. See, e.g., Cunningham v. Lyft, Inc., 17 F.4th 244 (1st Cir. 2021); Immediato v. Postmates, Inc., 54 F.4th 67 (1st Cir. 2022); Singh v. Uber Techs., Inc., 67 F.4th 550 (3d Cir. 2023).
Author:
Amy Johnson, Partner and Vice-Chair of Transportation Practice