Federal Arbitration Act Exclusion Does Not Apply to Local Delivery Drivers

Local delivery drivers for Postmates must arbitrate their wage-related claims, per the First Circuit Court of Appeals. The Court ruled against a purported coalition of couriers, holding that the exemption from the Federal Arbitration Act for “workers engaged in foreign or interstate commerce” did not apply to the couriers delivering local orders of meals or groceries.

Postmates, as described by the Court, “operates an online and mobile platform that enables customers to order take-out meals from local restaurants as well as comestibles and sundries from local grocery stores.” The Court also cited information from the record, that 99.66% of orders are delivered in-state, and the average delivery distance is 3.7 miles.

The decision focuses on whether delivery of goods in this setting – goods that may have once been in interstate commerce – is the final link in an interstate commerce transaction, such that the couriers are "engaged in foreign or interstate commerce." The Court held that it is not:

Although the appellants transport goods, qua couriers, they do so as part of separate intrastate transactions that are not themselves within interstate commerce. That the delivered items may have once travelled across state borders does not alter the equation. The interstate journey terminates when the goods arrive at the local restaurants and retailers to which they are shipped. Customers then purchase those meals and goods from local businesses. Thus, when the couriers set out to deliver customer orders, they do so as part of entirely new and separate transactions. And the record is luminously clear that those new and separate transactions are intrastate in nature as almost all deliveries made by the couriers as a class are completed within the state in which the order is placed. In a nutshell, couriers making deliveries from local businesses are transporting goods as part of local intrastate commerce.

The Court also distinguished this case from one involving drivers for Amazon, noting that local Amazon drivers were simply completing the last link in an interstate commerce chain. The Postmates couriers, in contrast, were delivering individual orders that had already “exited the flow of interstate commerce.” Deliveries made from local businesses and restaurants “bear only a tenuous relationship” to the flow of goods in interstate commerce.

Thus, the Postmates couriers must proceed to arbitration to resolve their wage claims. The case is Immediato v. Postmates, Inc., 2022 U.S. App. LEXIS 32848 (1st Cir., Nov. 29, 2022).