Hunton Retail Law Resource

In a significant win for employers operating businesses utilizing delivery drivers, on November 29, 2022, the First Circuit Court of Appeals held in Immediato v. Postmates, Inc. that couriers completing local, intrastate deliveries were not exempt from the Federal Arbitration Act (“FAA”), and could be compelled to submit to arbitration, because they were not engaged in foreign or interstate commerce.

On September 15, 2021, a divided Ninth Circuit panel in Chamber of Commerce v. Bonta, Case No. 20-15291, upheld Assembly Bill 51 (“AB 51”), a bill that would prohibit employers from requiring employees to execute arbitration agreements as a condition of their employment.  The Ninth Circuit’s ruling reversed in part the District Court’s ruling that AB 51 is preempted by the Federal Arbitration Act (“FAA”).

On Monday, the US Supreme Court agreed to consider whether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator. It is a question on which circuits have been divided. On one hand, some courts have found that the gateway question of arbitrability—whether the claims fall within the scope of the carve-out provision—is for the arbitrator to decide. On the other, some courts have found that, where there is a carve-out provision, there is no clear and unmistakable evidence of the parties’ intent to delegate questions of arbitrability to an arbitrator, and questions of arbitrability are to be decided by the court. Undoubtedly, resolution is necessary.

As reported on December 30, 2019 on the Hunton Employment & Labor Perspectives blog, Judge Kimberly J. Mueller of the United States District Court for the Eastern District of California granted a temporary restraining order that temporarily prohibits the state of California from enforcing AB 51, a law that would prohibit companies in California from requiring arbitration agreements as a condition of employment.

On Friday, December 6, 2019, a business coalition led by the US Chamber of Commerce filed suit challenging a new California law that forbids employers from offering and entering into certain arbitration agreements with their workers. Signed into law by California Governor Gavin Newsom on October 10, 2019, Assembly Bill 51 (AB 51) will impose criminal liability on employers who require applicants or employees, “as a condition of reemployment, continued employment, or the receipt of any employment-related benefit,” to “waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act” and other related employment statutes. Additionally, AB 51 will impose criminal liability on employers who retaliate against applicants or employees who refuse to enter into banned mandatory arbitration agreements.