Tuesday, February 11, 2020

No Sealing + Harsh Words About Employer-Mandated Arbitration in Doordash Case

By Eugene Volokh - February 11, 2020 at 08:50PM

Some excerpts from Judge William Alsup in Abernathy v. Doordash, Inc. (N.D. Cal.); I can't speak to whether the analysis of the arbitration matters is sound, but I thought it worth noting:

Petitioners are 5,879 couriers who work for respondent, DoorDash, Inc. In order to make deliveries for respondent, petitioners allegedly each clicked through a contract that contained a "Mutual Arbitration Provision," that required among other things, that … the arbitrations … be administered by the American Arbitration Association (AAA)…. In turn, AAA's Commercial Arbitration Rules require each individual to pay a filing fee of $300 and the responding company to pay a filing fee of $1,900.

Petitioner couriers say they have been improperly classified as independent contractors rather than employees. Accordingly, in August 2019, petitioners' counsel filed individual demands for arbitration with the AAA on behalf of 2,250 individuals (Abernathy petitioners) claiming violations of statutes such as the Fair Labor Standards Act and the California Labor Code. In September 2019, petitioners' counsel filed further demands on behalf of 4,000 more individuals with the AAA (Boyd petitioners) making the same claims. Petitioner couriers paid over $1.2 million in filing fees.

AAA then imposed a deadline of October 28 for respondent DoorDash to pay its share of the fees for the Abernathy arbitrations and a deadline of November 7 for the Boyd arbitrations. On October 28, respondent's counsel emailed AAA and petitioners' counsel stating they had "determined that there are significant deficiencies with the claimants' filings," and that "Doordash is under no obligation to, and will not at this time, tender to AAA the nearly $12 million in administrative fees." On November 8, AAA emailed the parties and stated, "Respondent has failed to submit the previous requested fees for the 6,250 individual matters; accordingly, we have administratively closed our files." …

[P]etitioner couriers have … filed an amended motion to compel arbitration with the AAA which seeks to compel arbitration on behalf of 5,879 individuals….

The court granted the motion to compel arbitration through AAA for the 5,010 petitioners who "signed declarations attesting to 'click[ing] through' DoorDash's AAA arbitration agreement." There was apparently some dispute about "the authority of petitioners' counsel to represent certain other petitioners and seek relief on their behalf," and the court left them to the AAA arbitration, adding,

If it turns out that Keller Lenkner [the firm representing the petitioners] has overstated its authority, or for any procedural reason, petitioners have not perfected their right to arbitrate, this order imposes on Keller Lenkner a requirement to fully reimburse DoorDash for all arbitration fees and attorney's fees and expenses incurred by DoorDash in defending the arbitration, and the arbitrator shall so award them.

The court also added:

[1.] Petitioners have filed an unopposed motion to file under seal certain portions of their reply brief, Aaron Zigler's declaration, and the exhibits attached to Aaron Zigler's declaration. CPR has designated these materials as confidential purporting that they contain, among other things, trade secrets, proprietary information, and sensitive information. The materials sought to be sealed here all relate to email communications between CPR and respondent's counsel, Gibson Dunn, in 2019.

In short, the emails track the following events: in May 2019, Gibson Dunn reached out to CPR to discuss issues DoorDash was having with filing fees for mass arbitrations, and to find a solution to prevent "an abuse of process." In October 2019, CPR provided Gibson Dunn with a draft of a mass arbitration protocol for discussion. A week later, CPR provided Gibson Dunn with another draft of the protocol based on their discussion. Gibson Dunn "interlineated comments, questions, and recommendations" in the new draft. CPR and Gibson Dunn traded additional drafts and revisions in the following weeks. On November 4, CPR notified Gibson Dunn that it had posted the finalized new protocol and asked to be notified when the new DoorDash contracts providing for arbitration under CPR were distributed.

Just because such information has been designated as confidential does not mean that it deserves to be kept from the public once filed in the federal district court. The district court should not be a party to concealing this information from the public, especially as it concerns an arbitration organization that holds itself out to the public as impartial. These documents would be useful to the public in evaluating the true extent to which the organization is impartial. The motion to seal is accordingly DENIED….

[2.] For decades, the employer-side bar and their employer clients have forced arbitration clauses upon workers, thus taking away their right to go to court, and forced class-action waivers upon them too, thus taking away their ability to join collectively to vindicate common rights. The employer-side bar has succeeded in the United States Supreme Court to sustain such provisions. The irony, in this case, is that the workers wish to enforce the very provisions forced on them by seeking, even if by the thousands, individual arbitrations, the remnant of procedural rights left to them. The employer here, DoorDash, faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order….

 


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