The gig economy consists of individuals, known as gig workers, who perform on-demand labor through digital platforms, such as apps or websites.[1] This structure provides gig workers flexible employment opportunities and autonomy over their hours.[2] However, employers often incorrectly label gig workers as independent contractors, allowing employers to avoid paying federal and state taxes while also withholding worker protections typically required by federal law.[3] Mislabeling gig workers persists due to the lack of state regulations defining the scope of employment relationships in the emerging gig industry, and the enforcement of arbitration clauses between workers and employers hinders the enactment of more regulation.[4]
Courts typically find arbitration agreements valid under the Federal Arbitration Act (“FAA”),[5] unless the plaintiff qualifies for an exception.[6] For example, 9 U.S.C. § 1 outlines the transportation worker exception.[7] Qualifying for this exception requires that the class of workers at issue, determined through examination of actual services performed nationally, participate in interstate commerce.[8] Recently, the Supreme Court in Bissonnette v. LePage Bakeries Park St., LLC expanded the transportation worker exception,[9] finding that independently contracted truck drivers transporting baked goods qualify for 9 U.S.C. § 1.[10] However, Bissonnette left open the question of whether workers who transport unprepared goods primarily to consumers qualify as transportation workers under Section 1 of the FAA.[11]
Post-Bissonnette, Instacart[12] “Shoppers”[13] brought a putative class action in the United States District Court of the Southern District of New York in Chambers v. Maplebear, Inc.[14] The plaintiff argued that Instacart misclassified Shoppers as independent contractors; however, the case was railroaded by Instacart’s motion to compel arbitration in accordance with the mandatory arbitration clause signed by the plaintiff.[15] In an effort to avoid arbitration, the plaintiff unsuccessfully argued that unlike takeout drivers, Shoppers deliver unprepared food, maintaining the chain of commerce and thus qualifying for the transportation worker exception.[16]
The Chambers court granted Instacart’s motion to compel arbitration, finding that Shoppers were not directly engaged in interstate commerce,[17] despite the fact that some Instacart deliveries occurred interstate,[18] since the chain of commerce was broken before the Shoppers had delivered the goods.[19] However, the court certified the plaintiff’s order for interlocutory appeal[20] to determine whether selecting and delivering goods from local stores to consumers or warehouses qualifies as conduct indicative of workers participating in interstate commerce under the FAA.[21]
I argue that on appeal, the Second Circuit should find in favor of the plaintiff and hold that Shoppers are exempt under Section 1 of the FAA and therefore cannot be compelled to arbitrate. First, the Act’s legislative history[22] and the Supreme Court’s decision in Bissonnette indicate that a broader interpretation of the class of workers included in this exception is required.[23] Additionally, resolving employment relationship disputes in a public forum is necessary to develop protections for gig workers in this emerging labor economy.[24] In the alternative, if the Second Circuit decides that the Shoppers are not exempt from the FAA, Congress should enact more legislation to protect gig workers so that employment relationship disputes in the gig economy can proceed to court, as this would allow the law to adapt to the gig economy and shape this emerging industry in a worker-friendly way.[25]
[1] Alex de Ruyter, Martyn Brown & John Burgess, Gig Work and The Fourth Industrial Revolution: Conceptual and Regulatory Challenges, 72 J. Iɴᴛ. Aғғᴀɪʀs, 37, 41 (2018).
[2] Id. at 39.
[3] Richard Frankel, The Federal Arbitration Act and Independent Contractors, Cᴀʀᴅᴏᴢᴏ L. Rᴇᴠ. Dᴇɴᴏᴠᴏ 101, 101 (2018).
[4] Id. at 105; Harry Arthurs, The False Promise of the Sharing Economy, in Lᴀᴡ ᴀɴᴅ ᴛʜᴇ “Sʜᴀʀɪɴɢ Eᴄᴏɴᴏᴍʏ”: Rᴇɢᴜʟᴀᴛɪɴɢ Oɴʟɪɴᴇ Mᴀʀᴋᴇᴛ Pʟᴀᴛғᴏʀᴍs, 58, 64 (Derek McKee, Finn Makela and Teresa Scassa eds. 2018); Gig economy tax center, IRS (Sept. 9, 2024), https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee [https://perma.cc/97WE-7ERU]; de Ruyter, Brown & Burgess, supra note 1 at 40-41.
[5] 9 U.S.C. § 2 (stating arbitration agreements are generally enforceable).
[6] 9 U.S.C. § 2
[7] 9 U.S.C. § 1.
[8] Bissonnette v. LePage Bakeries Park St., 601 U.S. 246, 253-256 (2024) (discussing 9 U.S.C. § 1).
[9] Id. at 246 (holding these drivers qualified for the exception because the actual services these workers performed included interstate transportation); Bissonnette v. LePage Bakeries Park St., SCOTUS Bʟᴏɢ, https://www.scotusblog.com/case-files/cases/bissonnette-v-lepage-bakeries-park-st-llc/ [https://perma.cc/4V9E-YVBK]; Emmy Freedman, Instacart Can Arbitrate Driver's Suit, but 2nd Circ. to Weigh in, Lᴀᴡ 360 (Aug. 28, 2024, 6:39 PM), https://www.law360.com/employment-authority/articles/1874309/instacart-can-arbitrate-driver-s-suit-but-2nd-circ-to-weigh-in [https://perma.cc/795T-FRH8].
[10] Bissonnette, 601 U.S. 246, 253-256 (2024).
[11] Chambers v. Maplebear, Inc., No. 21-CV-7114 (JGLC), 2024 U.S. Dist. LEXIS 153869, at 1, 9 (S.D.N.Y. Aug. 27, 2024) (citing Bissonnette, 601 U.S. 246).
[12] Instacart is an online platform that allows independent contractors to accept work picking up and delivering groceries to users. Iɴsᴛᴀᴄᴀʀᴛ, https://www.instacart.com/ [https://perma.cc/RSU6-SA8E] (last visited Feb. 13, 2024).
[13] Shoppers are independent contractors that accept work via the Instacart platform. Iɴsᴛᴀᴄᴀʀᴛ, https://shoppers.instacart.com [https://perma.cc/2Q4S-64BW] (last visited Feb. 13, 2024).
[14] Chambers, supra note 11 at 9.
[15] Chambers, supra note 11 at 17.
[16] Id. at 17.
[17] Id. at 14.
[18] Id. at 12 (“99.6% of Instacart orders in the United States were Intrastate”).
[19] Id. at 14-17.
[20] Id. at 14 (granting interlocutory appeal since this litigation was an unappealable civil action concerning an open question of law and such appeal would accelerate termination of litigation) (citing 28 U.S.C. § 1292(b)).
[21] Chambers, supra note 11 at 21.
[22] Frankel, supra note 3 at 126-128.
[23] See Bissonnette v. LePage Bakeries Park St., 601 U.S. 246 256 (2024).
[24] See Frankel, supra note 3 at 126-128; Janna Giesbrecht-McKee, Comment, The Fairness Problem: Mandatory Arbitration in Employment Contracts, 50 Wɪʟʟᴀᴍᴇᴛᴛᴇ L. Rᴇᴠ. 259 (2014).
[25] Frankel, supra note 3 at 114-119; On the Sup. Ct.’s Decision in Bissonnette v. LePage Bakeries—a Win for Delivery Drivers, Nᴀᴛ’ʟ Eᴍᴘ. L. Pʀᴏᴊᴇᴄᴛ (Apr. 12, 2024), https://www.nelp.org/on-the-supreme-courts-decision-in-bissonnette-v-lepage-bakeries-a-win-for-delivery-drivers/ [https://perma.cc/BJ3Y-JGSS].
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