A Recent DoorDash Opinion Addresses Several Pivotal Arbitration Issues

• Published date: 25 January 2023
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Employee Benefits & Compensation, Employment Litigation/ Tribunals, Arbitration & Dispute Resolution, Class Actions
• Law Firm: BakerHostetler
• Author: Mr John Lewis

Two DoorDash delivery drivers filed a class action against the company and two of its employees alleging violations of federal and state wage and hour laws. After removal of the case to the Southern District of New York, the defendants filed motions to compel arbitration, to strike the complainants' class action allegations and to stay the case pending resolution of the individual claims.

Judge Valerie E. Caproni of the Southern District of New York, a 2013 President Obama nominee, analyzed a number of the critical issues presented in the case before granting the defendants' motion. Mullo v. DoorDash, Inc. No. 22-cv-2430 (S.D.N.Y. Jan. 17, 2023).

The Arbitral Background

The plaintiffs had agreed to the terms of DoorDash's Independent Contractor Agreement (ICA), which was presented in a hyperlink when they applied for work. The ICA prominently advised that it contained an arbitration clause covering all disputes involving the ICA, including under federal and state labor laws, and that it included a waiver of the right to engage in a class action involving ICA-related disputes both in arbitration and in court. While delivery workers could opt out of the arbitration agreement, the plaintiffs had not done so. Finally, while the ICA originally provided that all arbitrations would be governed by the American Arbitration Association's (AAA) Commercial Arbitration Rules, that was changed to the International Institute for Conflict Prevention & Resolution (CPR) Rules during the plaintiffs' delivery work.

Arbitration and Class Allegations

The plaintiffs in Mullo did not dispute that the Federal Arbitration Act (FAA) was applicable to the ICA arbitration provisions, and because they worked in New York City and not across state lines, no exemptions to the FAA appeared relevant. Moreover, while the plaintiffs generally did object to the validity of the arbitration agreement, they did not specifically single out the clause delegating questions of arbitrability to the arbitrator. Hence, the validity of the arbitration agreement had to be addressed by the arbitrator and not the court. See Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 70-72 (2010).

With no avenue available under federal law, the plaintiffs took the position that the class action waiver was unenforceable under state contract law. In this case the court found it was New York state contract law under which the plaintiffs 'regularly worked.' See Compl. '. But the 'grab-bag of arguments' the plaintiffs...