Reinsurance & Arbitration Focus

The Ninth Circuit denied a petition seeking to vacate an order compelling arbitration of an Uber driver's putative class action. The district court held that rideshare drivers who pick up and drop off passengers at airports did not fall within an exemption in the Federal Arbitration Act (FAA) for workers engaged in foreign or interstate commerce, and therefore the petitioner may be judicially compelled to arbitrate in accordance with the terms of his employment contract. The Ninth Circuit affirmed, finding the decision was not clearly erroneous as a matter of law.

Section 1 of the FAA provides that arbitration clauses in "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce" are "exempt" from the FAA's coverage. In response to Uber's motion to compel arbitration, the petitioner argued that he drives passengers engaged in interstate travel to and from airports, and thus qualifies for the exemption. The Ninth Circuit has interpreted section 1 as applying only to employees who "actually transport people or goods in interstate commerce," although the court acknowledged that several recent federal court decisions have interpreted the clause more broadly. Notwithstanding the tension between those decisions and the district court's ruling here, the court declined to find the district court's decision was "clearly erroneous as a matter of law." Analogizing the petitioner's employment to that of local taxicab services, the court found that the petitioner never crossed state lines during his work, and cited no precedent holding that rideshare drivers, as a class, are "engaged in foreign or interstate commerce." As such, the petition for a writ of mandamus was denied.

In re William Grice, No. 20-70780 (9th Cir. Sept. 4, 2020)