Uber Drivers--12,500 of Them--Demand Individual Arbitrations, Each Paid for by Uber

Uber's arbitration agreements with its drivers precludes class actions and thus requires individual arbitration. "Amazingly," Allison Frankel writes, "thousands of Uber drivers did just that. Between August and November of this year, about 12,500 drivers, many of whom had been class members in cases in which Uber successfully moved to compel arbitration, served individual arbitration demands on Uber ... These thousands of drivers filed their arbitration demands at JAMS, as mandated in Uber’s contracts."

The drivers argue Uber is required to pay for their arbitration because the terms of service say "In all cases where required by law, the Company will pay the Arbitrator's and arbitration fees."

The drivers allege “As of November 13, 2018, 12,501 demands have been filed with JAMS,” the arbitration organization. : “Of those 12,501 demands, in only 296 has Uber paid the initiating filing fees necessary for an arbitration to commence [...] only 47 have appointed arbitrators, and [...] in only six instances has Uber paid the retainer fee of the arbitrator to allow the arbitration to move forward.”

Jay-Z and Arbitration

Jay-Z persuaded New York Judge Saliann Scarpulla to stay an arbitration because of a lack of black arbitrators. Jay-Z argued that his company's arbitration agreement with Iconix Brand Group violated New York's public policy against discrimination.

Jay-Z (Shawn C. Carter), through his lawyers, argued "When Mr. Carter began reviewing arbitrators on the American Arbitration Association’s Search Platform ... he could not identify a single African-American arbitrator on the 'Large and Complex Cases' roster, composed of hundreds of arbitrators, that had the background and experience to preside over the Arbitration. After repeated requests to the AAA for diverse arbitrators with expertise in complex commercial law, the AAA was able to provide only three neutrals it identified as African-American: two men — one of whom was a partner at the law firm representing Iconix in this arbitration and thus had a glaringly obvious conflict of interest — and one woman."

However, the transcript suggests Judge Scarpulla's skepticism toward Jay-Z's argument and that she only granted a temporary stay of arbitration until the main judge on the case (Judge Barry Ostrager) hears the merits of the case.

Hat tip to Mark Kantor

International Arbitration Program at the World Bank

Three leading international arbitral institutions annually co-sponsor a joint colloquium. Leaders of  the International Centre for Settlement of Investment Disputes (ICSID), the Int'l Chamber of Commerce International Court of Arbitration, and the American Arbitration Association's International Centre for Dispute Resolution will discuss priorities and trends at their respective institutions, in Washington, DC, December 7, 2018.

Other sessions will address practical challenges faced by practitioners—i.e. ethical dilemmas, media scrutiny, compliance with awards—and offer guidance from experts in the field on how to manage these effectively.

Missouri Supreme Court Holds Unavailability of National Arbitration Forum Prevents Enforcement of Arbitration Agreement

The Missouri Supreme Court in A-1 Premium Acceptance, Inc. vs. Meeka Hunter affirmed a decision denying arbitration when a chosen arbitration forum was unavailable. The parties’ agreement, contained in a lender’s contract of adhesion, stipulated that the National Arbitration Forum (“NAF”) would resolve any disputes. However, the NAF reached an agreement with the Minnesota Attorney General and agreed not to arbitrate consumer disputes, including the one at issue here. The Missouri Supreme Court held that nothing in the Federal Arbitration Act created an obligation of the court to appoint a substitute arbitration forum or arbitrator.

However, the Missouri Supreme Court recognizes several disparate results in footnote four. In Green v. U.S. Cash Advance Ill., LLC, the 7th Circuit uses § 5 of the FAA to appoint a substitute arbitration forum reasoning that, “[the contract] makes one thing clear: These parties selected private dispute resolution. Courts should not use uncertainty in just how that would be accomplished to defeat the evident choice.” Green v. U.S. Cash Advance Ill., LLC, 724 F.3d 787, 793 (7th Cir. 2013).

Maurice Wutscher LLP provides a more detailed discussion of the procedural history and reasoning.

Kentucky’s Non-Enforcement of Employment Arbitration Agreement Preempted by Federal Arbitration Act?

The Kentucky Supreme Court unanimously refused to enforce an agreement conditioning employment on an agreement to arbitrate. Kentucky Statute 336.700(2) “prohibits employers from conditioning employment on an existing employee’s or prospective employee’s agreement to ‘waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit to which the employee or person seeking employment would otherwise be entitled . . . .’ ”, according to Northern Kentucky Area Development District v. Danielle Snyder

Several commentators have observed conflict between this Kentucky Supreme Court ruling, and the U.S. Supreme Court’s broad holding on Federal Arbitration Act (FAA) preemption of such anti-arbitration state law:

Jackson Lewis PC said “[t]he Kentucky Supreme Court’s opinion appears to be at odds with recent U.S. Supreme Court rulings on FAA preemption of state laws that treat arbitration agreements differently than other contracts, see, e.g., Kindred Nursing Centers Lmtd P’ship v. Clark, 137 S. Ct. 368 (2016).”

Vorys Sater Seymour and Pease LLP said “[i]t seems difficult to reconcile the Snyder decision with the United States Supreme Court’s 2018 decision in Epic Systems Corp. v. Lewis … that expressly upheld mandatory arbitration agreements or its 2017 decision in Kindred Nursing Centers v. Clark that prohibits rules that single out arbitration for unfavorable treatment.”

Stoll Keenon Ogden PLLC said “[i]mportantly, the Supreme Court of Kentucky’s decision appears to conflict with recent U.S. Supreme Court precedent upholding the FAA’s broad preemptive effect. See, e.g., Kindred Nursing Centers Ltd. Partnership v. Clark, 137 S.Ct. 1421 (2017).”

I commented on Epic Systems here and on Kindred Nursing here. Kindred Nursing also involved a decision by Kentucky’s Supreme Court.

Supreme Court Hearing Three Arbitration Cases in October

On October 3rd the Court heard oral arguments in New Prime, Inc. v. Oliveira, asking whether  FAA section 1, which excludes certain transportation “workers” from the FAA’s reach, applies to independent contractors, in addition to the employees, of a transportation company.  Ogletree Deakins writes: “Given the justices’ seeming alignment with Oliveira at the oral argument, it is anticipated that the Supreme Court will ultimately issue a decision allowing truck drivers and others independent contractors in the transportation industry to avoid arbitration.”

In late October the Court will hear Lamps Plus, Inc. v. Varela in which the Ninth Circuit held the agreement permitted class arbitration.

The Court will also hear Henry Schein v. Archer & White Sales, Inc. This contract provided for arbitration of all disputes, except claims for injunctive relief and involving intellectual property rights. Plaintiff sought injunctive relief and argued the case should be litigated, but defendants argued the arbitration agreement sends to the arbitrator any questions about the arbitrability of some or all of the case. The Fifth Circuit ruled that the court should decide arbitrability, and affirmed denial of the motion to compel arbitration.

The National Law Review provides a more detailed discussion of the issues.

California Supreme Court Vacates Arbitration Award and Refuses to Enforce Arbitration Clause in Void Contract

The California Supreme Court held that a law firm’s failure to disclose to the firm’s client the firm’s conflict of interest violated Rules of Professional Conduct and thus rendered the firm’s engagement agreement with its client, including the arbitration clause, unenforceable in its entirety.

This decision is interesting for:

1. applying state arbitration law rather than the Federal Arbitration Act;
2. vacating an arbitration award on the merits; and
3. not applying the separability doctrine of Prima Paint v. Flood & Conklin (1967) 388 U.S. 395.

On the first of these topics, the court said: “the parties’ agreement calls for application of California law, including the CAA, and both parties agree that the CAA governs. This case thus presents no question concerning application of the Federal Arbitration Act, 9 United States Code section 1 et seq. (See Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 470; Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 387.)”

On the second, the court said: a court may vacate an arbitration award when “[t]he arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the

decision upon the controversy submitted.” (Code Civ. Proc., § 1286.2, subd. (a)(4) (section 1286.2(a)(4)).) And: “the merits of an arbitral award are not generally subject to judicial review, but ... “the rules which give finality to the arbitrator’s determination of ordinary questions of fact or of law are inapplicable where the issue of illegality of the entire transaction is raised in a proceeding for the enforcement of the arbitrator’s award.”

Law 360 discusses the case

California Legislature Opens Door to Out of State Lawyers in Arbitration

California Governor Jerry Brown signed into law Senate Bill 766, which allows out of state lawyers to represent parties in commercial arbitrations located in California. The previous restriction on out of state lawyers stemmed from the California Supreme Court decision in Birbrower, Montalbano, Condo & Frank v. Superior Court of Santa Clara County, 17 Cal. 4th 119 (1998). As I pointed out in a past post, the extra burden imposed by that decision may have led some parties to draft arbitration clauses to steer arbitration away from California. 

Dixon Dern, a California attorney, arbitrator, and mediator, offers a more detailed discussion of the bill and its requirements.

Arbitration Clauses in Corporate Charters to Prevent Investor Class Actions?

The Securities and Exchange Commission, as I noted a few months ago, is considering whether to start allowing arbitration clauses in corporate charters, so investor-company disputes would go to individual arbitration rather than class-action litigation.

Opposing this reform is Secure Our Savings (SOS), which recently submitted a letter to SEC Chairman Jay Clayton. SOS wants the Chair "to reaffirm the SEC’s longstanding position that forced

arbitration provisions that prevent investors from bringing or participating in class actions

violate Section 29(A) of the Exchange Act." 

Criticizing SOS is Alan Kaplinsky, leader of the effort to enforce consumer-finance arbitration agreements with class waivers.

Sports Illustrated Teaches Arbitration 101: Football (Kneeling During Anthem) Kaepernick Arbitrator Denies Summary Judgment

Kaepernick alleges NFL teams conspired to keep him out of the league because of controversy surrounding his kneeling during the playing of the national anthem. The arbitrator, Penn Law Professor Stephen Burbank, denied the NFL's motion for summary judgment, so Kaepernick's grievance will proceed to hearing. As Sports Illustrated nicely puts it "the forthcoming trial won’t be a 'trial' as that term is commonly understood. There will be no jury, Burbank won’t be robed as a judge and it will all be conducted in private. This is because Kaepernick’s 'trial' is technically an arbitration hearing. The term 'trial' is used mainly out of convenience and because it will resemble a trial in many ways—evidence will be presented and attorneys for each side will question witnesses, who will testify under oath and swear to tell the whole and complete truth."

Summary judgment and other dispositive motions are generally considered less commonly granted in arbitration than litigation.

Trump Campaign Loses on Scope of Arbitration Clause

The Trump campaign's motion to compel arbitration of a former staffer's harassment suit was denied by a New York judge,  the ABA Journal reports.

The court found the arbitration clause of the staffer's nondisclosure agreement confines arbitration to any dispute "arising under or relating to this agreement,” but “does not require arbitration for any ‘dispute between the parties’ or even ‘any dispute arising out of plaintiff’s employment.”

The court wrote “The arbitration clause could have been written to require any disputes arising out of plaintiff’s employment to go to arbitration or that any claims brought by plaintiff against defendant must be sent to arbitration. But it did not.”

Trump Campaign Begins Arbitration Against Omarosa

Trump's 2020 re-election campaign filed the arbitration against former senior White House adviser Omarosa Manigault Newman, alleging she breached a nondisclosure agreement. CNBC reports the case was filed with the American Arbitration Association in New York City.

Shareholders Bound by Arbitration Clauses in Corporate Charters and By Laws?

Zachary D. Clopton of Cornell Law School and Verity Winship of the University of Illinois College of Law have published A Cooperative Federalism Approach to Shareholder Arbitration
128 Yale L.J.F. 169 (2018).

The abstract:
Arbitration dominates private law across an ever-expanding range of fields. Its latest target, however, may not be a new field as much as a new form: mandatory arbitration provisions built into corporate charters and bylaws. Recent developments in corporate law coupled with signals from the Securities and Exchange Commission suggest that regulators may be newly receptive to shareholder arbitration. What they do next may have dramatic consequences for whether and how corporate and securities laws are enforced.

The debate about the merits of arbitration is well worn, but its application to shareholder claims opens the door to a different set of responses. In particular, the overlapping authority of federal and state actors with respect to corporate law calls for approaches that sound in cooperative federalism. Yet cooperative-federalist approaches have been absent from recent debates about shareholder arbitration. This Essay explains why cooperative federalism is a natural fit for addressing these issues. Moreover, we marshal specific examples of cooperative solutions in this area that could help frame federal-state coordination going forward. Such a cooperative response would avoid unnecessary federal-state conflict and allow policymakers to approach shareholder arbitration with expertise, accountability, and mutual respect.

Uber Class-Waiver Arbitration Agreement Unenforceable

The First Circuit recently held that an arbitration clause contained in the online contract of the ride sharing app, Uber Technologies, Inc., is unenforceable under Massachusetts law. Cullinane v. Uber Technologies, Inc., No. 16-2023 (1st Cir. June 25, 2018).

In this case, plaintiffs, Uber riders, filed a class action in Massachusetts state court, challenging certain fees Uber charged as violations of state consumer protection laws. Uber removed the case to federal court and moved to compel arbitration based on an arbitration clause in Uber’s Terms of Service. In order to use the Uber app, the customers had to register for an Uber account and to agree to the company’s Terms of Service & Privacy Policy. The Terms of Service included an arbitration clause which required customers to resolve any disputes with Uber through binding arbitration and also contained a class action waiver. The district court granted Uber’s motion to compel arbitration and dismissed the lawsuit. The plaintiffs appealled to the First Circuit.

As Jeanne Kohler of Carlton Fields writes, the First Circuit found that Uber had not reasonably communicated its Terms of Service, including the mandatory arbitration clause, to its customers because the link to the Terms was not sufficiently conspicuous. The Court noted that Uber did not use a common method of conspicuously informing online app users of its terms by requiring users to click a box stating that they agree to the terms before continuing to the next screen. Instead, Uber displayed, on an enrollment screen, a rectangular box with the language “Terms of Service,” which customers were not required to click in order to review the contract. The Court noted that Uber’s terms were not conspicuously disclosed to its users because the link was not designed in a way that most users associate with hyperlinks and thus did not have the appearance of a hyperlink. Further, the hyperlink box was not sufficiently distinct from the rest of the screen, which had other links in bold with similarly sized font that were “more noticeable.”

Supreme Court to Decide Class Arbitration Case

Lamps Plus Inc. v. Varela, from the Ninth Circuit, concerns "Whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements."

The US Chamber of Commerce wants the Ninth Circuit reversed. As Supreme Court has decided many recent arbitration cases along predictable political lines, and there was a dissent to the Ninth Circuit opinion including the famously progressive (late) Judge Reinhardt, such a reversal would fit the usual pattern. Public Citizen predictably opposes the Chamber on this case.

As John Lewis of BakerHostletler writes, "the district court interpreted the arbitration agreement to authorize class arbitration. A divided 9th Circuit panel affirmed. Judges Reinhardt and Wardlaw first distinguished Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 55 U.S. 662, 684 (2010). In Stolt-Nielsen, “silence” was “more than the mere absence of language explicitly referring to class arbitration; instead, it meant absence of agreement.” So, merely because an agreement does not expressly refer to class arbitration is not determinative according to the judges. The majority then applied California contract principles to interpret the arbitration agreement. They found the agreement was ambiguous as to class arbitration and construed it against the drafter, Lamps Plus."

Article Defending Some of the Supreme Court's Controversial Arbitration Decisions

A Short Defense of Southland, Casarotto, and Other Long-Controversial Arbitration Decisions, was just published in the Loyola Consumer Law Review.

The abstract follows:

Scalding criticism of Supreme Court arbitration decisions appeared in the 1990’s and is now widespread. Over twenty years ago, the Supreme Court held that pre-dispute arbitration clauses in adhesion contracts are generally enforceable. Thoughtful scholars then feared threats to consumers' and employees' rights, and today similarly warn that the Court’s recent arbitration decisions “will provide companies with free rein to commit fraud, torts, discrimination, and other harmful acts without fear of being sued.” Professors are not the only sources of strong language opposing the Court’s arbitration decisions. Under the heading “Forced Arbitration Destroys Individual Rights,” a 2015 federal court decision declares: “Today, forced arbitration bestrides the legal landscape like a colossus, effectively stamping out the individual’s statutory rights wherever inconvenient to the businesses which impose them. What is striking is that, other than the majority of the Supreme Court, whose questionable jurisprudence erected this legal monolith, no one thinks they got it right.”

From this alleged consensus of “No one thinks they got it right,” this Article dissents in significant part. While I have long opposed Supreme Court decisions on arbitration law’s separability doctrine and judicial review of arbitration awards, and would reduce adhesive arbitration agreements’ impact on class actions, I continue to sympathize with some of the Court’s long-controversial arbitration decisions.

I choose the word “sympathize” because I believe much of the criticism of the Court’s arbitration decisions does not sufficiently weigh the difficult position the Court was in when deciding those cases. The FAA was enacted in the 1920’s before the landmark federalism case of Erie v. Tompkins, the New Deal’s expansion of the Commerce Clause and thus of federal power to preempt state law, the growth of federal employment and consumer law in the 1960’s and 1970’s, and the ensuing explosion of class actions. Each of these enormous changes to our nation’s legal landscape conflicted with the premises underlying the FAA. While Congress could have amended the FAA to accommodate and be more consistent with these enormous changes, it did not. So, reconciling an old statute with a half century of law in tension with that statute’s premises became the Court’s task.

The Courts’ critics generally argue that the drafters and adopters of the FAA did not intend for it to: (1) preempt state law or (2) cover consumer and employment arbitration agreements. This Article responds to those arguments.

Creator of Arbitral Class Waiver, Alan Kaplinksy, Profiled

Philadelphia lawyer Alan Kaplinsky profiled by Philadelphia Inquirer:

Kaplinsky takes credit for the Arbitration Waiver, an agreement that forces bank customers (and, more recently, corporate employees) to accept arbitration to settle disputes, instead of suing or joining well-financed class-action lawsuits. Kaplinsky had feared that the bureau under Cordray would effectively ban mandatory arbitration. The Trump administration has favored the practice, protecting Kaplinsky’s legacy.

“We made a lot of money defending those suits. So you could say this goes against our self-interest,” Kaplinsky told me. “But I felt class actions were being abused.

Will Securities Exchange Comm'n Permit Arbitration Clauses in Initial Public Offerings?

As Skadden explains, "Historically, the SEC has not permitted forced arbitration clauses in IPOs. The issue last arose in the context of an IPO of a U.S. company in 2012, when the Division of Corporation Finance took the position that it would not use its delegated authority to accelerate the effective date of the company’s registration statement because it was unable to conclude that such mandatory arbitration provisions were consistent with 'the public interest and protection of investors' as required by Securities Act Section 8(a)."

Various commentators weigh in:

IPO-Related Securities Litigation and the Idea of Shareholder Claim Mandatory Arbitration
By Kevin LaCroix

The Uncertain Role of IPOs in Future Securities Class Actions, by Jeff Lubitz, Institutional Shareholder Services,

SEC Weighs a Big Gift to Companies: Blocking Investor Lawsuits
By Benjamin Bain

Employment Arbitration Agreements Widespread

Employment arbitration agreements are widespread. New York Times op-ed says:

"Sixty million employees in the United States — at places from Buffalo Wild Wings to Facebook to Goldman Sachs — are now bound by mandatory-arbitration agreements, and of those, 25 million are bound by class-action bans."

Supreme Court Enforces Employment Arbitration Agreement Waivers of Class Actions

The Court in EPIC SYSTEMS CORP. v. LEWIS predictably split 5-4 with conservative justices enforcing the class waivers and progressive justices dissenting. 

Russ Bleemer writes:

The long-running controversy involves arbitration provisions that kick in due to class waivers which prohibit employees from joining class processes—litigation or arbitration—in favor of mandatory, predispute, individualized arbitration to resolve disputes with their employers.

...

[Justice] Gorsuch’s [majority] opinion rejects a 2012 National Labor Relations Board administrative [decision] that held that FAA Sec. 2 removed mandatory individual arbitration from FAA application for employee agreements.  The Court’s opinion notes that the reasoning interfered with a fundamental attribute of arbitration.

After rejecting the Sec. 2 argument, Gorsuch dismantled the employees’ other arguments.  He develops the Supreme Court precedent concerning two clashing federal statutes, finding that the National Labor Relations Act, passed in 1935, didn’t override 1925’s FAA to require class or collective actions.

Compelling Arbitration of Claims by Plaintiff Who Did Not Sign Arbitration Agreement

Coinbase, which pays cash for bitcoin, had an arbitration clause in its contract with its customer, Crypsty, which used Coinbase's services to steal from Crypsty's customers. One of those customers, Leidel was one of the individuals who filed a putative class action against Cryptsy. Leidel and  Cryptsy's receiver then sued Coinbase, alleging Coinbase aided Cryptsy’s breaches of fiduciary duty, theft, negligence, and unjust enrichment. Plaintiffs alleged Coinbase had these duties pursuant to various federal statutes and regulations.

Coinbase moved to compel arbitration, arguing the receiver was bound by the arbitration clause that Cryptsy formed, and that the doctrine of equitable estoppel bound  Leidel the arbitration clause because his claims relied on a duty owed by Coinbase to Cryptsy’s customers that arose—if at all—under the contract including the arbitration clause.

The Eleventh Circuit affirmed denial of the motion to compel arbitration because Leidel's claims allged breach of duties imposed by the Bank Secrecy Act rather than bearing a significant relationship to the arbitration agreements.

Commentary from Manatt Phelps & Phillips LLP which provides this copy of the Eleventh Circuit's opinion

Hat Tip to Tom Witherspoon

New Book on Arbitration

Arbitration: Cases, Problems, and Practice
by Matthew H. Adler, a partner at Pepper Hamilton LLP and a lecturer at the University of Virginia School of Law.

The Centrist Case for Enforcing Adhesive Arbitration Agreements

My latest article, The Centrist Case for Enforcing Adhesive Arbitration Agreements, was just published at 23 Harvard Negotiation Law Review 29 (2017)

The Abstract:

"The Politics of Arbitration Law and Centrist Proposals for Reform", 53 Harvard J. on Legislation 711 (2016), explained how issues surrounding consumer, and other adhesive,  arbitration agreements became divisive along predictable political lines (progressive vs. conservative) and proposed an intermediate (centrist) position to resolve those issues. However, "The Politics of Arbitration Law" did not argue the case for this centrist position. It left those arguments for two more articles: (1) "The Centrist Case against Current (Conservative) Arbitration Law", 68 Florida Law Review 1227 (2016), which argued against the overly-conservative parts of current arbitration law; and (2) this Article, which argues against progressive proposals to repeal, not only the overly-conservative parts of current arbitration law, but also the parts of current arbitration law that should be retained. While progressives would prohibit enforcement of individuals’ adhesive arbitration agreements, this Article argues that such agreements generally should be enforced.

Arbitration for Summer Associates at Law Firms?

The law firm of  Munger, Tolles & Olson required its summer associate employees to sign arbitration agreements -- until opposition mounted on social media, the American Bar Ass'n Journal reports.

Law.com also covered this story.

Free Course on International Arbitration

The Coursera online course of videos and readings is taught by Prof. Eric De Brabandere and Giulia Pinzauti both of the Universiteit Leiden in the Netherlands.

Hat tip to Missouri Law Professor S.I. Strong.

Arbitration Agreements in Bankruptcy

I spoke on Arbitration Agreements in Bankruptcy at the Missouri Bar Association’s Annual Bankruptcy Institute in Springfield, MO, March 9, 2018,. The topic of arbitration agreements in bankruptcy is addressed in my co-authored 2017 book, Principles of Arbitration, and in a 2018 case by the United States Court of Appeals for the Second Circuit in New York City, Anderson v. Credit One Bank.

My presentation on arbitration agreements in bankruptcy is available on  Ware’s SlideShare.

Supreme Court to Decide Arbitration of Independent Contractor Disputes

The Supreme Court agreed to decide New Prime Inc. v. Oliveira.

Oliveira agreed to work for Prime under an Independent Contractor Operating Agreement stating that the relationship between the parties was that "of carrier and independent contractor and not an employer/employee relationship." This contract said the parties agreed to arbitrate "any disputes arising under, arising out of or relating to [the contract], . . . including the arbitrability of disputes between the parties."

Oliveira filed a class action alleging that Prime violated the Fair Labor Standards Act, as well as the Missouri minimum-wage statute, by failing to pay its truck drivers minimum wage. Prime moved to compel arbitration under the FAA. Section 1 of the FAA provides that the Act shall not apply "to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." The Supreme Court has interpreted this section to "exempt[] from the FAA . . . contracts of employment of transportation workers."

The First Circuit Court of Appeals denied Prime's motion to compel in stating “a transportation-worker agreement that establishes or purports to establish an independent-contractor relationship is a contract of employment under § 1,” and thus excluded from the FAA.

Commentary by the U.S. Chamber of Commerce and Public Justice

Adhesive Arbitration Agreement with Consumer Already Litigating?

The U.S. Court of Appeals for the 11th Circuit refused to enforce an adhesive arbitration agreement between a bank and a consumer customer already suing that bank.

The Dasher v. RBC Bank (11th Cir. Feb. 13, 2018) plaintiffs alleged the bank had processed debit card transactions in such a way that it would increase overdraft charges. When the suit was brought, the bank had no arbitration agreement with plaintiffs, but during the case the bank sent customers an amended customer agreement that included an arbitration provision. By continuing to use their bank accounts, the customers arguably assented to the amended customer agreement. But the 11th Circuit said that was overridden by the fact that, as Liz Kramer puts it, "Through counsel, the named plaintiff [customer] was fighting the motion to arbitrate in the courts."

Kramer's Arbitration Nation blog goes on to say: "This is an important decision for many reasons.  First, it offers future courts an alternative argument to  “waiver” in situations like this one.... Second, it offers an important reminder to defendants that courts do not take kindly to repeated motions to compel arbitration based on evolving arbitration agreements."