Mobile-Based Transportation Employment Disputes: Corporate Chutzpa and the Potential Resurrection of Class Arbitration

Abstract

The thriving mobile-based ride-sharing and food-delivery business in the United States has proven to be fertile grounds for litigation. Lawsuits, at times in the form of class actions, have been launched by drivers claiming to have been mis-classified as independent contractors rather than employees by companies such as Uber, Lyft, and DoorDash. Since the drivers’ agreements with these companies include an arbitration clause as well as a class proceedings waiver, the courts have thus far referred these actions to individual arbitration. This outcome has been commonly perceived as detrimental to the drivers, who lose both their day in court and their ability to sue as a class.

This Essay sets out to counter this perception and the broader assertion that arbitration inherently favors the interests of corporate employers over individual employees. Its starting point is a recent decision by a federal district court holding DoorDash to its contractual obligation to arbitrate the claims of over 5,000 individual drivers. The essay argues that this decision reflects the neutrality of arbitration as a dispute resolution mechanism in the employment context and generally. Moreover, the decision suggests that companies such as DoorDash stand to benefit from using class arbitration, despite businesses’ traditional disdain for class proceedings. Class arbitration has been used in the United States since the 1980s, although some have forecasted its demise following several discouraging Supreme Court decisions. The essay argues that, at least in the context of disputes between drivers and companies such as DoorDash, class arbitration in fact presents an attractive option for both parties and that we may soon see these disputes ushering in a new era of class arbitrations.

Keywords: Arbitration, Class Arbitration, Mobile Transportation, Employment

JEL Classification: K12, K29, K31, K41