Third Circuit Joins Other Circuits, Holds Uber Drivers Are Not Exempt From FAA

In Singh v. Uber Technologies Inc., the Third Circuit Court of Appeals, in a precedential opinion, affirmed district court orders granting defendant Uber Technologies Inc.’s motion to compel arbitration, concluding that the plaintiffs were not exempt from the Federal Arbitration Act (FAA). In reaching its decision, the court noted it is joining other circuit courts in concluding that Uber drivers do not belong to the class of workers exempt from arbitration under section 1 of the FAA as “workers engaged in foreign or interstate commerce.”

The FAA compels federal courts to enforce a wide range of arbitration agreements, but it does not apply to arbitration agreements in the contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce. The case before the Third Circuit was a consolidated appeal involving two cases brought against Uber by its drivers. Uber filed motions to compel arbitration in both cases, relying on the terms of its agreements with the drivers, which included a broad arbitration clause.

In plaintiff Singh’s case, which was a putative class action, the district court granted a previous motion to compel arbitration filed earlier in the case by Uber, concluding that section 1 of the FAA applied only to transportation workers who move goods, not those who carry passengers. The Third Circuit reversed that earlier decision, concluding that the exemption also applies to transportation workers who transport passengers “so long as they are engaged in interstate commerce or in work so closely related thereto as to be in practical effect part of it,” and remanded the case to the district court to determine whether the Singh class of workers were engaged in interstate commerce. After limited discovery related to that issue, the district court concluded that the plaintiffs were not engaged in foreign or interstate commerce, and compelled arbitration. In affirming the decision of the district court, the Third Circuit concluded that interstate commerce was not central to the work of Uber drivers, and the exemption in section 1 of the FAA does not apply. The district court orders compelling arbitration were affirmed.

Singh v. Uber Technologies Inc., No. 21-3234 (3d Cir. May 4, 2023).