Supreme Court Denies Review of DoorDash’s Arbitration Dispute

The nation’s highest court summarily declined to hear online food ordering and delivery service DoorDash’s Federal Arbitration Act (FAA) appeal on Tuesday after an October 8 conference. The denial leaves in place a California appellate court decision refusing to send the employment class action against DoorDash Inc. to arbitration.

The case began in 2019, when a delivery driver or “Dasher” sued his employer for violations of California labor law under the Private Attorneys General Act (PAGA). PAGA authorizes an employee to bring a suit for civil penalties on behalf of the state against the employer for labor code violations committed against the employee and those similarly situated. 

According to the appellate court’s November 2020 decision, the Dasher alleged that the company had been using customer tips to satisfy its drivers’ guaranteed minimum pay. DoorDash moved to compel arbitration based on the agreement the driver signed.

The panel affirmed the trial court’s holding that a waiver of an employee’s right to bring a PAGA representative action in any forum violates public policy and that this determination is not preempted by the FAA. The court explained that although a United States Supreme Court decision, Epic Systems Corp. v. Lewis, reaffirmed the broad preemptive scope of the FAA, it did not address the specific issue before the Iskanian v. CLS Transportation Los Angeles LLC court, rendering Iskanian good law. As such, the appellate court agreed that a PAGA representative action cannot be compelled to arbitration absent evidence that the state consented to waive the right to bring the PAGA claim in court.

In its petition for a writ of certiorari, DoorDash Inc. requested review on the basis that the California judiciary endorses  “an unwritten exception” to the FAA irreconcilable with Supreme Court precedent. The driver waived his response and now the high court has spoken. 

Accordingly, the case will proceed in San Francisco County Superior Court. DoorDash is represented by Gibson Dunn & Crutcher LLP and the plaintiff by Parris Law Firm.

Relatedly, Uber Technologies Inc. has asked the U.S. Supreme Court to review the same question. In that class action, the plaintiff alleged that Uber misclassified him as an independent contractor rather than an employee in violation of PAGA. The respondent’s petition is due October 25. Uber is also represented by Gibson, Dunn & Crutcher LLP, as well as Littler Mendelson P.C.