OTLA Trial Lawyer Fall 2021

32 Trial Lawyer • Fall 2021 arbitration clauses. Under earlier Su- preme Court decisions, certain issues regarding the enforceability of an arbitra- tion clause (“arbitrability issues” 2 ) were presumptively decided by a court. What Rent-a-Center essentially holds is, if an arbitration agreement clearly delegates arbitrability issues to the arbitrator, chal- lenges to such a provision must follow a torturous path that can cause even good lawyers to dive over a cliff. 3 For example, when facing a delegation clause, you may lose if you challenge only the arbitration provision as unconscio- nable. If there is a clear and unmistakable delegation of the unconscionability challenge to the arbitrator, you must challenge the delegation clause itself as unconscionable to ensure a court’s review. The arbitration agreement in Rent-a- Center expressly delegated arbitrability issues to the arbitrator. Often, attempted delegation takes place indirectly by in- corporating the rules of an arbitration forum such as the American Arbitration Association (AAA). 4 Defendants will gleefully cite Brennan v. Opus Bank , 796 F2d 1125 (9th Cir 2015) to claim delegation through AAA rules is enforceable in the employment context in the Ninth Circuit. Don’t be fooled. Brennan was highly sophisticat- ed. Before he became Opus’s executive vice president, he had been a partner in a major New York law firm, Jones Day. Most district courts in the Ninth Circuit won’t find clear and unmistakable delega- tion solely by incorporation of AAA rules when the employee is less sophisticated. E.g., Escobar v. National Maintenance Contractors , LLC, 2021WL 3572652 (D Or 2021) at *8-9. In summary, delegation clauses, espe- cially indirect ones, are vulnerable to challenge. To succeed, you must aim your punches, not throw them wildly. The transportation worker exception Normally, when an arbitration clause says it is subject to the FAA, then it is. See Citizens Bank v. Alafabco, Inc. , 539 US 52 (2003). Except when an em- ployee is a transportation worker as de- fined in 9 USC sect. 1, which provides: “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The paradigmatic transportation worker is an employee who transports persons or goods across interstate lines. Recently, the Supreme Court held in New Prime, Inc. v. Oliveira, 139 S Ct 532, 202 L Ed 2d 536 (2019), that transportation workers include persons making such deliveries who are denominated as inde- pendent contractors. After New Prime , misclassification cases involving trans- portation workers are not subject to AT&T Mobility, LLC v. Concepcion , 563 US 333 (2011), which held that state law unconscionability decisions striking down class action bans are impliedly preempted by the FAA. Instead, Oregon law applies, which holds that under many circumstances class action bans are un- conscionable. Vasquez-Lopez v. Beneficial Oregon, Inc. , 210 Or App 553, 569-572, 152 P3d 940 (2007). Subsequently, the Ninth Circuit held that a “last mile” delivery person also is a transportation worker not subject to the FAA even though the worker never crossed state lines, so long as that person typically delivered parcels that themselves crossed state laws. Rittmann v. Amazon. com, Inc., 971 F3d 904 (9th Cir 2020), cert den, Amazon.com, Inc. v. Rittmann , 141 S Ct 1374, 209 L.Ed.2d 121 (2021). Accord: Waithaka v. Amazon.com, Inc. , 966 F3d 10 (1st Cir 2020). This is a powerful tool for the protec- tion of delivery drivers misclassified as independent contractors. Jeff Gist was such a driver for a commercial package delivery service in the Northwest. In 2013, Schuck Law filed a class action misclassification case, seeking overtime pay, with Gist as the class representative. It was thrown into arbitration, a decision affirmed by the Court of Appeals, after which Lisa K. Hunt successfully peti- tioned for review. By that time, the cases cited two paragraphs above had been decided, so Christina Stephenson conceived OTLA’s amicus brief would focus on the trans- portation worker exception, which would at least preserve the class status of the case. Whether the Supreme Court will reach this issue or not, this will be a fruitful approach in other similar cases. Challenging stealth arbitration clauses Not long ago, formal contracts were written on paper and signed by all par- The Challenge Continued from p 30 This is a powerful tool for the protection of delivery dr i ve r s mi s c l as s i f i ed as independent contractors.