Archer v. Grubhub, Inc.

• Decision Date: 27 July 2022
• Docket Number: SJC-13228
• Parties: Veronica ARCHER & others v. GRUBHUB, INC.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

190 N.E.3d 1024

Veronica ARCHER ¹ & others²

v.GRUBHUB, INC.

SJC-13228

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 2, 2022

Decided July 27, 2022

The following submitted briefs for amici curiae:

Theanne Evangelis, of California (Blaine H. Evanson, of California, & Joshua M. Wesneski, of the District of Columbia, also present) for the defendant.

Eric R. LeBlanc, Cambridge, for the plaintiffs.

Ben Robbins & Daniel B. Winslow for New England Legal Foundation.

Lee Dawn Daniel, Northampton, Thomas R. Murphy, Salem, & Patrick M. Groulx, Somerville, for Massachusetts Academy of Trial Attorneys.

Maura Healey, Attorney General, & Tallulah Q. Knopp, Assistant Attorney General, for Attorney General.

Rohit K. Singla, of California, Rachel G. Miller-Ziegler, of the District of Columbia, & Elaine J. Goldenberg for Lyft, Inc.

Mason A. Kortz for Jonathan Askin & others.

Jennifer B. Dickey & Jonathan D. Urick, of the District of Columbia, Mark C. Fleming, & Charles C. Kelsh for Chamber of Commerce of the United States of America.

Robert F. Friedman, of Texas, Julie M. McGoldrick, of California, & Francis J. Bingham for DoorDash, Inc., & another.

Shannon Liss-Riordan & Adelaide H. Pagano for Massachusetts Employment Law Association.

Present: Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt, & Georges, JJ.

WENDLANDT, J.

In this case, we consider whether delivery drivers, who delivered takeout food and various prepackaged goods from local restaurants, delicatessens, and convenience stores to Grubhub, Inc. (Grubhub), customers within the Commonwealth, fall within a residual category of workers -- namely, "any other class of workers engaged in foreign or interstate commerce" -- who, like "seamen" and "railroad employees," are exempt from arbitration pursuant to § 1 of the Federal Arbitration Act (FAA). 9 U.S.C. § 1. We join the numerous courts that have addressed the same question in their respective jurisdictions and conclude that they are not. Further concluding that the arbitration agreements between the plaintiff drivers and Grubhub are binding, we reverse the Superior Court judge's denial of Grubhub's motion to compel arbitration and to dismiss the plaintiffs’ complaint.³

1. Background. a. Facts. The following facts generally are undisputed.

The plaintiffs are former delivery drivers for Grubhub, an online ordering and delivery marketplace that connects customers with local restaurants through its website and mobile application. The plaintiffs⁴ delivered takeout meals and prepackaged items, such as a bottle of soda or a bag of potato chips, from local restaurants, delicatessens, and convenience stores to local customers. The plaintiffs all worked in Massachusetts and did not cross State lines in their work for Grubhub.

In February 2017, Grubhub distributed an arbitration agreement entitled "Mutual Agreement to Arbitrate Claims" to its drivers, including the plaintiffs, through an online portal. To access the agreement, the plaintiffs had to activate a hyperlink entitled "Arbitration Agreement," and then had the option to select either an icon to view the text of the agreement or the document title to navigate to the signature page.⁵ The signature page required the plaintiffs to acknowledge that they "read, understand, and/or agree to be bound by the terms" of the agreement, and indicated below the signature line that the document was an "arbitration agreement." The plaintiffs each signed the agreement electronically before the end of March 2017.

The arbitration agreement included a provision requiring the plaintiffs to submit all "past, present or future" disputes "arising out of or related to [e]mployee's ... employment and/or separation of employment," including "any claims based upon or related to ... retaliation ... [and] wages or other compensation," to final and binding arbitration. It further provided that the terms of the agreement were governed by the FAA and included a class action waiver stating that "[t]here will be no right or authority for any dispute to be brought, heard, or arbitrated as a class action."

b. Procedural history. In October 2019, the plaintiffs, on behalf of themselves and others similarly situated, commenced the present action against Grubhub in the Superior Court, alleging that Grubhub violated the wage act, G. L. c. 149, §§ 148 and 150 ; the tips act, G. L. c. 149, § 152A ; and the minimum wage act, G. L. c. 151, § 7 ; and that Grubhub unlawfully retaliated against drivers who complained about their wages in violation of G. L. c. 149, § 148A.

In May 2020, Grubhub filed a motion to compel arbitration and to dismiss the complaint, asserting that each plaintiff had entered into an agreement to arbitrate, which was enforceable under the FAA.⁶

Following a hearing, a Superior Court judge denied Grubhub's motion. The judge found that the plaintiffs entered into the arbitration agreement; however, the judge concluded that the plaintiffs, by virtue of their transportation and delivery of prepackaged food items, some of which were manufactured outside Massachusetts, fell within the definition of "any other class of workers engaged in foreign or interstate commerce" who are exempt from arbitration under § 1 of the FAA. Grubhub appealed, and we transferred the case sua sponte from the Appeals Court.

2. Discussion. We review both the denial of a motion to compel arbitration and the denial of a motion to dismiss de novo. See Battle v. Howard, 489 Mass. 480, 487, 185 N.E.3d 1 (2022) ; Landry v. Transworld Sys., Inc., 485 Mass. 334, 337, 149 N.E.3d 781 (2020).

a. FAA. Enacted in 1925 in "response to [the] hostility of American courts to the enforcement of arbitration agreements," Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001) (Circuit City ), the FAA evinces a "liberal federal policy favoring arbitration" (citation omitted), AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011), and requires "courts ‘rigorously’ to ‘enforce arbitration agreements according to their terms,’ " Epic Sys. Corp. v. Lewis, ––– U.S. ––––, 138 S. Ct. 1612, 1621, 200 L.Ed.2d 889 (2018), quoting American Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 233, 133 S.Ct. 2304, 186 L.Ed.2d 417 (2013). Thus, in general, "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

As sweeping as the FAA is, however, it is not unqualified. See Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 800 (7th Cir. 2020). Relevant to the present appeal, § 1 of the FAA 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." 9 U.S.C. § 1. Thus, the FAA exempts two enumerated categories of workers ("seamen" and "railroad employees") and a residual category ("any other class of worker engaged in foreign or interstate commerce") from compelled arbitration. See New Prime Inc. v. Oliveira, ––– U.S. ––––, 139 S. Ct. 532, 537, 202 L.Ed.2d 536 (2019). The plaintiff drivers insist that they fall within the residual category because they are transportation workers who transport and deliver goods, such as prepackaged chips or soda, in the flow of interstate commerce.

b. Construction of § 1 residual category. As with any question of statutory interpretation, our inquiry as to the meaning of the residual clause of § 1 begins with the words of the statute itself. See Ross v. Blake, 578 U.S. 632, 638, 136 S.Ct. 1850, 195 L.Ed.2d 117 (2016) ; Patel v. 7-Eleven, Inc., 489 Mass. 356, 362, 183 N.E.3d 398 (2022), citing Tze-Kit Mui v. Massachusetts Port Auth., 478 Mass. 710, 712, 89 N.E.3d 460 (2018). We consider the words of the statute "in connection with the cause of its enactment, ... to the end that the purpose of its framers may be effectuated."

Boston Police Patrolmen's Ass'n, Inc. v. Boston, 435 Mass. 718, 720, 761 N.E.2d 479 (2002), quoting O'Brien v. Director of the Div. of Employment Sec., 393 Mass. 482, 487-488, 472 N.E.2d 253 (1984). See Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 7, 131 S.Ct. 1325, 179 L.Ed.2d 379 (2011) (considering language of statute "in conjunction with the purpose and context").

With these principles in mind, we consider initially that the operative unit of the residual category of workers in § 1 is a "class of workers." See Wallace, 970 F.3d at 800. See also Southwest Airlines Co. v. Saxon, ––– U.S. ––––, 142 S. Ct. 1783, 1788, 213 L.Ed.2d 27 (2022). Thus, in determining whether the exemption applies, the question is not whether any individual worker was engaged in interstate commerce, but whether the class of workers to which the individual belonged was engaged in interstate commerce. "[A] member of the class qualifies for the exemption even if [he or] she does not personally ‘engage in interstate commerce’ " so long as the class to which he or she belongs is engaged in interstate commerce. Wallace, supra, quoting Bacashihua v. U.S. Postal Serv., 859 F.2d 402, 405 (6th Cir. 1988). "By the same token, someone whose occupation is not defined by its engagement in interstate commerce does not qualify for the exemption just because [he or] she occasionally performs that kind of work." Wallace, supra. Thus, the fact that the plaintiffs here did not cross State lines in their work for Grubhub is not dispositive; the relevant question is whether the class of workers to which the plaintiffs belonged was engaged in interstate commerce. The relevant "class of workers" is defined by the work the workers do –- here, there is no dispute that the plaintiffs delivered food from local restaurants, delis, and convenience stores to Grubhub customers in the Commonwealth. See Southwest Airlines Co., supra.

In addressing this question, we do not write on a blank slate. The ...