For one company, forced worker arbitration may turn out to be its worst nightmare.


Image by mohamed Hassan from Pixabay

Be careful what you wish for because you might just get it.

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If you require your employees to sign arbitration agreements as a condition of employment, and those arbitration agreements force employees to waive their rights to assert claims together as part of a collective or class action, then you might end up in arbitration.

Err, arbitrations.

Lots of arbitrations.

It’s just like I predicted a few years ago. Just ask Doordash.

Erin Mulvaney at Bloomberg Law reports here that “DoorDash Inc. must individually arbitrate claims filed by more than 5,000 delivery drivers fighting for overtime pay and minimum wages, a federal judge in California said.”

The drivers claim that DoorDash has improperly classified them as independent contractors, rather than employees. In August 2019, counsel filed individual demands for arbitration with the American Arbitration Association (AAA) on behalf of 2,250 individuals. The following month, 4000 more couriers demanding individual arbitration. All in, the petitioners paid $1.2 million in filing fees. But, DoorDash has yet to pay its share of the arbitration fees. So the drivers went to federal court to compel arbitration.

And here is a copy of the opinion granting the motion to compel arbitration on behalf of 5,010 of the petitioners and denying DoorDash’s cross-motion to stay the proceedings until another case pending in federal court is decided.

Employer Takeaways

Sure, this is a bit of a doomsday scenario. Yeah, just a bit. But, if you are using similar arbitration agreements or are considering implementing them, this is one of the risks.

Another alternative in many jurisdictions — not all — is a jury-trial waiver. You avoid a jury and the arbitration fees and get a judge who may have more experience deciding employment disputes than your average arbitrator.

Whatever you decide, consult with an employment attorney first because the last thing you want is an unenforceable piece of paper.

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