In Edwards v. DoorDash, Inc., No. 17-20082 (5th Cir. Apr. 25, 2018), the Fifth Circuit Court of Appeals reaffirmed its position that arbitrability of claims, including whether class or collective claims must be arbitrated individually, is a threshold question that must be determined by the court prior to deciding certification motions. In Edwards, a driver asserted claims against a food-delivery service under the Fair Labor Standards Act (FLSA), asserting that he was improperly classified as an independent contractor and denied minimum wage and overtime pay required by the FLSA. Contemporaneously with the filing of his complaint, the driver filed a motion to conditionally certify a nationwide class of similarly situated delivery drivers.
The driver though had executed an independent contractor agreement with the company. That agreement contained an arbitration clause which was to serve as the “exclusive means of resolving disputes” between the company and the driver. The arbitration clause also contained a provision that any disputes in arbitration had to be brought “on an individual basis only and not as a class or other collective action basis.” The company moved to dismiss the case and compel individual arbitration of the driver’s claim, and the district judge granted the motion following an evidentiary hearing on the issues without deciding the conditional certification motion.
In its order upholding the district court’s order, the Fifth Circuit first reaffirmed a prior ruling in Reyna v. Int’l Bank of Commerce, 839 F.3d 373, 376 (5th Cir. 2016) that a decision on arbitrability of claims was required before a conditional certification ruling: “ … We continue to hold that arbitrability is a ‘threshold question’ to be determined ‘at the outset,’ a holding consistent with the ‘national policy favoring arbitration.’” The Edwards court went on to find that the arbitration agreement in question was valid and contained an enforceable delegation clause that appropriately delegated issues of arbitrability to the arbitrator.
Missing from the Edwards opinion was any discussion of the trio of cases pending before the United States Supreme Court on the issue of the validity of class or collective action waivers in individual arbitration cases, including the Fifth Circuit’s opinion in Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015). While Murphy Oil upheld the validity of class action waivers, certiorari was granted on Murphy Oil’s conflict with opinions in the Seventh and Ninth Circuits finding such waivers unenforceable. Issuance of the Edwards opinion in advance of the Supreme Court’s expected decision this term reinforces the Fifth Circuit’s apparent strong preference for arbitration of claims and enforcement of class and collective action waivers in employment disputes.
Edwards v. DoorDash, Inc., No. 17-20082 (5th Cir. Apr. 25, 2018).
