The Class Action Weekly Wire – Episode 37: Delivery Drivers’ Misclassification Suit Stayed Pending SCOTUS Arbitration Ruling

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nathan Norimoto with their discussion of recent developments in a Massachusetts wage & hour suit brought by delivery drivers alleging independent contractor misclassification.

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Episode Transcript

Jennifer Riley: Hello, podcast listeners, welcome to this week’s installment of the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is Nathan Norimoto, associate in our San Francisco office. Welcome, Nathan.

Nathan Norimoto: Thanks, Jen. It’s great to be here.

Jen: So today we’re discussing one of the top areas of focus by the plaintiffs’ class action bar – wage & hour litigation – and in particular, we’re going to talk about a misclassification case out of Massachusetts involving the arbitration defense. Nathan, can you start by giving our listeners some background on the case?

Nathan: Absolutely. So, misclassification is a popular theory alleged in wage & hour lawsuits often alleging exempt versus non-exempt or independent contractor versus employee claims. This particular case involves independent contractor misclassification claims brought under the Massachusetts Wage Act and the Massachusetts Minimum Fair Wage Law. The case at issue is Canales, et al. v. Flowers Foods, Inc., et al., currently pending in the U.S. District Court for the District of Massachusetts.

Delivery drivers had filed suit in 2021, alleging that Flowers Foods and its subsidiaries, LePage Bakeries and CK Sales Co., misclassified them as independent contractors, and sought wages and overtime pay. After the district court denied the defendants’ attempts to make the workers arbitrate under the Federal Arbitration Act, or FAA, the companies appealed to the First Circuit, and the appeals court back to the district court’s judgment – finding that precedent from the First Circuit and the Supreme Court lays out the exemption from arbitration under the FAA. Just last month, after the First Circuit issued its decision, the defendants filed a motion to dismiss or compel arbitration under the Massachusetts Uniform Arbitration Act.

Jen: Thanks for that background, Nathan. What was the result of the Court’s latest ruling?

Nathan: So earlier this week, U.S. District Judge Allison D. Burroughs denied the defendants’ motion to dismiss or compel arbitration under the Massachusetts Uniform Arbitration Act. The judge had found that defendants delayed in filing a motion to compel arbitration, which was inconsistent with the purpose of arbitration, citing a Massachusetts district court decision called Oliveira v. New Prime, Inc.

However, in that same decision, Judge Burroughs did separately grant the companies’ request to stay the case while the United States Supreme Court weighs a decision in Bissonnette v. LePage Bakeries. In that Supreme Court case, the Second Circuit had argued that the delivery drivers were not exempt from arbitration under the FAA because they are employees in the bakery industry. Under Section 1 of the FAA, there’s an arbitration exemption for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

Jen: Thanks so much, Nathan, for that rundown on this ongoing litigation and thank you listeners for joining us on the podcast today. We’ll be sure to keep you up-to-date on developments on the arbitration defense, the transportation worker exemption, and other issues. That wraps up another episode of the Class Action Weekly Wire.

Nathan: Thanks for having me, Jen, and have a great day everyone.

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