Judge Saundra Brown Armstrong of the California Northern District Court ruled in favor of arbitration in a dispute between Postmates and Postmates Fleet Drivers. The judge denied requests from Postmates to rule as to whether the Petitioners are trying to arbitrate on a class-action basis, in violation of the arbitration agreement, and denied their motion for stay pending appeal.
Postmates is represented by Gibson, Dunn & Crutcher. The petitioners in the case are 5,257 separate Postmates delivery drivers represented primarily by Keller Lenkner. Under the agreement the drivers complete, they are considered independent contractors rather than employees; these drivers allege this is a miscalculation. The Postmates Fleet Agreement the drivers sign also contains a Mutual Arbitration Provision. “The net effect of these waivers is that any courier with a legal claim against Postmates is limited to filing an individual arbitration demand with the designated arbitrator, the American Arbitration Association,” the Order states.
In March and April of 2019, there were 5,274 arbitration demands from Postmates drivers to the AAA, each claiming they were misclassified as independent contractors, requiring Postmates to pay the arbitration filing fees, which allegedly were about $10 million. Because of the Mutual Arbitration Provision, drafted and required by Postmates, the Drivers are required to submit individual demands to an arbitrator, which led to the high fees.
Postmates declined to pay the fees claiming the demands were insufficient and generic. “Postmates argued that by submitting allegedly “generic” arbitration demands with the arbitrator, Petitioners are attempting to proceed with a de facto classwide arbitration, in contravention to the Class Action Waiver,” the Order states. Postmates also claimed the fees constituted “irreparable harm,” but that claim was rejected. “It strains credulity for Postmates to argue that the amount of filing fees due constitute irreparable harm when that “harm” is entirely of its own making.”
Postmates argued the court should decide if the Petitioners are trying to “arbitrate on a classwide basis.” The court did not agree with Postmates’ interpretation of their agreement, but even if Postmates was correct the judge stated that the Mutual Arbitration Provision means that any such dispute would be reserved for the arbitrator.
They did not address other issues, including determining whether the lack of specificity in the arbitration claims show the Petitioners are proceeding on a class-wide basis. “Stated another way, the arbitration demands either comport with the Mutual Arbitration Provision — or they do not. It is as simple as that,” the Order states about the dispute.
The case resembles similar ongoing litigation and arbitration against Doordash. In that case, also in the Northern District of California, Doordash is represented by Gibson Dunn while the plaintiffs are represented by Keller Lenkner. The judge recently ruled that Doordash must face over 5,000 individual arbitration claims.