Given the ever-increasing number of wage-hour class and collective actions being filed against employers, it is no surprise that many employers have turned to arbitration agreements with class and collective action waivers as a first line of defense, particularly after the United States Supreme Court’s landmark 2018 Epic Systems v. Lewis decision.

If there is a common misconception about Epic Systems, however, it is that the Supreme Court concluded that all arbitration agreements with all employees are enforceable under all circumstances.  The Court reached no such conclusion. In fact, the Court went out of its way to explain that arbitration agreements remain susceptible to challenges, including challenges that would be available as to other contracts.

And, of course, arbitration agreements are susceptible to challenges under the Federal Arbitration Act (“FAA”) itself.

The FAA, which established a federal policy favoring arbitration, extends to arbitration agreements in any contract evidencing a transaction “involving commerce.”

Somewhat confusingly, Section 1 of the FAA includes an exemption for individuals who are actually “engaged in … interstate commerce.”  That is, arbitration agreements that involve “commerce” are not valid under the FAA if the workers are engaged in “interstate commerce.”  Specifically, under Section 1, the FAA does not apply to seamen, railroad employees, and other workers “engaged in foreign or interstate commerce.” This exemption is sometimes referred to as the “transportation worker” exemption.

The courts have struggled to determine whether particular individuals fall within the transportation worker exemption. Their conclusions are far from consistent and are arguably entirely irreconcilable.

Some courts have concluded that the exemption only applies to individuals who themselves transport goods across state lines.  Others have concluded that the exemption can apply to persons who transport goods within a single state, never crossing into another state.

In Rittmann v., Inc., the United States District Court for the Western District of Washington concluded that Amazon “last mile” delivery drivers who did not transport goods across state lines were nevertheless “engaged in … interstate commerce” and, therefore, fell within the exemption to the FAA -- meaning that they were not required to arbitrate their claims pursuant to their arbitration agreements.

In a 2-1 split decision, the Ninth Circuit Court of Appeals has now affirmed that decision.

This ruling comes on the heels of a similar ruling from the First Circuit Court of Appeal in July 2020 in Bernard Waithaka v. Inc. 

These two decisions permit the delivery drivers to pursue their wage-hour claims as class actions in court, rather than as individual arbitrations – unless the decisions are overturned during en banc reviews or unless the United States Supreme Court steps in.

Given the very different interpretations of the transportation worker exemption, it is certainly possible that the Supreme Court will in fact review the issue and resolve the conflict among the courts.

Until then, these decisions are worth review by employers with arbitration agreements, particularly those who have employees involved in transportation.  And it is important for them to keep in mind that even if an arbitration agreement is not enforceable under the FAA, it could be enforced under state law.

Back to Wage and Hour Defense Blog Blog

Search This Blog

Blog Editors


Related Services



Jump to Page


Sign up to receive an email notification when new Wage and Hour Defense Blog posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.