Poor Planning Dooms Pet Owner; Good Planning Saves GrubHub’s Arbitration Agreement

35D2D59B-89A6-40D6-8727-7C4C7D87BC9Findependent contractor arbitration agreement GrubHub Wallace

Why did the cassowary cross the road? To get to the other side.

Careful planning and foresight are important. For example, it would have been a good idea for a Gainesville, Florida man to have read up a little more on cassowaries before choosing to own one as a pet. A cassowary is a large flightless bird that grows up to six feet tall and can weigh 130 pounds. It has a four-inch claw on each foot, used to slice open its prey. (Infomercial: It’s both a fork and a knife!) The bird has powerful legs that it can use to kill its prey with a single kick — or chase it down by running at speeds up to 30 mph. Think Big Bird meets Edward Scissorhands meets pissed-off hungry crocodile in a go-cart.

Anyway, some guy in Gainesville bought one as a pet. It promptly killed him. Poor planning. I would have recommended a labradoodle.

A better example of planning ahead is GrubHub and its independent contractor arbitration agreements.

Two drivers recently challenged the validity of those agreements, arguing that after the Supreme Court’s recent New Prime decision (see blog post here), they were “transportation workers” and therefore not covered by the Federal Arbitration Act (FAA) and therefore their arbitration agreements could not be enforced. The FAA is a federal law that favors enforcement of arbitration agreements.

The GrubHub drivers wanted to bring a federal lawsuit alleging independent contractor misclassification and failure to comply with federal and state (Illinois and California) wage and hour laws.

After the Supreme Court’s New Prime ruling — that drivers in interstate commerce were not protected by the FAA — the plaintiffs’ bar began filing lawsuits to test the bounds of what it means to be a driver in interstate commerce.

A federal court in Illinois recently ruled that GrubHub drivers are retained for local deliveries, not for the type of interstate transportation that is covered under the FAA exception. Since the GrubHub drivers’ deliveries are local, not interstate, the FAA does apply. Since the FAA applies to the GrubHub drivers and their arbitration agreements, their dispute must be referred to arbitration.

The court dismissed the case, and the drivers’ claims will have to be brought before an arbitrator.

In contrast to the court decision we blogged about on Monday, this ruling shows that a well-written arbitration agreement can and will be enforceable. Make sure your arbitration agreements are carefully written and include all procedural and substantive safeguards. You can never be too careful when drafting an arbitration agreement — or when choosing a pet bird.

© 2019 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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