A three-judge panel of the Third Circuit issued three opinions while trying to determine the route to follow when reconciling principles of federalism with the question of whether the Federal Arbitration Agreement (“FAA”) applied. Judges Matey (writing the opinion of the court), Matey (concurring), and Shwartz (dissenting) each issued engaging and thoughtful opinions on an issue that is critical in the era of the gig economy. The plaintiff was a last-mile shipper for Amazon. Like his Uber, GrubHub, and Drizly cohorts, he signed up through an app to deliver stuff from a Seattle-based company that you might have heard of called Amazon. In doing so, he agreed to an arbitration provision that the FAA applied and that Washington law controlled the remainder. But, the plaintiff claimed that he was exempt from the FAA under 9 U.S.C. ยง 1 because he made some deliveries across state lines. The District Court permitted limited discovery to determine whether that exemption applies. Amazon had a problem with the ruling because the company wanted everything in arbitration. The issue was even more complicated because New Jersey’s arbitration laws might have applied even if the FAA did not apply. Section 1’s exemption, as the Third Circuit noted, has important historical precedents. The exemption applies “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The Third Circuit reasoned that “seaman” and “railroad employees” had clear definitions when FAA was enacted, and both of those specific classes of workers had their own federal laws that governed their labor disputes. And each judge admirably tried to bring that historical context to the gig economy. In the end, the Third Circuit vacated the order compelling discovery and ordered the District Court to consider both federal and state law regarding arbitrability before engaging in discovery.
