The First Circuit ruled in favor of Lyft in a decision that was strikingly similar to reasoning asserted in an amicus brief filed by the New England Legal Foundation.
The issue was whether the so-called “transportation worker” exemption of the Federal Arbitration Act, which provides that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” applied to Lyft drivers. (In Circuit City (2002), the Supreme Court held that the residual phrase, “any other class of workers . . . ,” referred only to transportation workers.) In particular, the issue here was whether the drivers were “engaged in interstate commerce” merely because they drove passengers to and from Logan airport for the passengers’ interstate trips, and because some drivers occasionally crossed state lines. This issue has divided the circuit courts. What was at stake was whether the plaintiffs could proceed with a class action in court, on their claim of misclassification as independent contractors, or whether they were bound to arbitrate their claims, on an individual basis only, according to the terms of Lyft’s arbitration agreement with them.
In a decision that is strikingly similar to NELF’s amicus brief, the Court concluded that the plaintiffs’ alleged first basis for engaging in interstate commerce–trips to and from Logan airport–failed entirely under the Supreme Court’s decision in the important Yellow Cab case of 1947, as we had argued in some detail. In that case, the Court held that Chicago cab drivers were not affecting commerce under the Sherman Act when they happened to drive Chicago residents to and from the local train stations for their interstate trips.
The Supreme Court in Yellow Cab contrasted this fortuitous and attenuated connection with interstate commerce with another claim in the same case, in which the cab drivers contracted in advance with the train stations to transport certain interstate passengers from one Chicago train station to another, as a necessary intrastate leg of an integrated interstate journey. The Court allowed this claim to go forward under the Sherman Act.
We discussed both sets of claims from Yellow Cab, in order to reject the plaintiffs’ claims here and to distinguish the plaintiffs’ claims from the First Circuit’s recent decision in Waithaka v. Amazon, in which the Court concluded that Amazon’s last-mile drivers were engaged in interstate commerce under the FAA exemption because they completed the necessary last intrastate leg of an integrated interstate transportation of goods. As we had done in the brief, the First Circuit discussed both sets of claims from Yellow Cab in its Lyft decision.
As for the plaintiffs’ alleged second basis for engaging in interstate commerce, the Court concluded, as we had argued, that the occasional crossing of state lines has nothing to do with the robust and continuous interstate activities of “seamen and railroad employees,” which are the specifically named categories of exempt workers in the FAA exemption, and, therefore, must limit an interpretation of the residual phrase, “any other class of workers engaged in foreign or interstate commerce,” as per the Supreme Court’s instruction in its Circuit City decision. (As we wrote in our brief, “Those named classes of workers are engaged primarily in the robust movement of goods across state (or national) lines, along a continuous and carefully planned route.”)