Betancourt v. Transportation Brokerage Specialists, Inc. (March 29, 2021, A159528)
Plaintiff brought a putative wage-and-hour class action on behalf of drivers who deliver out-of-state goods in the course of the final intrastate segment of the shipment. The defendant delivery company moved to compel individual arbitration pursuant to an arbitration agreement with a class-action waiver, arguing that the Federal Arbitration Act (FAA) applied to preempt California precedent circumscribing the enforcement of class-action waivers. The trial court denied the motion, concluding the FAA was inapplicable because the drivers fell within the FAA’s exemption for transportation workers engaged in interstate commerce.
The Court of Appeal affirmed in part and reversed in part, holding the trial court erred by not compelling the plaintiff to arbitrate his individual claims but agreeing that the FAA was inapplicable and the class-action waiver was therefore unenforceable. Joining the Ninth Circuit and First Circuit, the court concluded that the FAA exemption applied to “last mile” drivers whose local, intrastate delivery of goods was the last phase of a continuous journey of the out-of-state goods in interstate commerce to their final destination with the customer.
In doing so, the court distinguished case law declining to apply the exemption to drivers for food delivery services like DoorDash, reasoning that—unlike out-of-state goods that stop briefly at a warehouse before reaching their local destination with the customer—the delivery of meals prepared by local restaurants did not involve goods that were indisputably part of the stream of interstate commerce. The court explained: “[A]ny interstate journey of an ingredient used to prepare [local] restaurant food ends when it reaches its customer: the restaurant.”
