A split federal appeals panel agreed Amazon can’t use arbitration to avoid a class action lawsuit from drivers who allege the company improperly monitored their off-work online communication between workers about their working conditions and potential union organizing activities.
The root issue is a February 2021 privacy violation lawsuit Drickey Jackson filed on behalf of Amazon Flex drivers, alleging the company monitored and wiretapped off-hours communications in closed Facebook groups.
Amazon sought to escape the lawsuit by pointing to an arbitration provision within the terms of the drivers' service agreement.
U.S. District Judge William Hayes, however, denied Amazon’s motion to compel arbitration, finding the issue was outside the agreement.
Amazon challenged Hayes’ ruling before the U.S. Ninth Circuit Court of Appeals, which issued its opinion April 19. Judge Mary Schroeder wrote the opinion, joined by Judge Michelle Friedland. Judge Susan Graber partially concurred, but also wrote a partial dissent.
According to court documents, both parties agreed the 2016 terms of service document established the type of issue bolstering Jackson’s allegations was suitable for judicial decision regarding the suitability of arbitration. The chief dispute, then, became Amazon’s insistence its 2019 service agreement should prevail and the driver’s counterargument the company never provided suitable notice of the updated agreement.
Unlike conventional Amazon employees, Amazon Flex drivers use their own vehicles and sign up to make food and grocery deliveries from Whole Foods Market and Amazon Fresh stores, as well as packages from Amazon Delivery Stations. Schroeder explained the panel wasn’t asked to make a finding about whether or not such drivers are independent contractors.
During proceedings before Judge Hayes, Amazon declared it emailed the 2019 terms of service to Flex drivers that October, and said that document “contained a broader arbitration provision that made the issue of arbitrability itself subject to arbitration,” Schroeder wrote. No party disputes that Jackson kept working as a Flex driver and participating in the groups he alleged the company breached.
The topic of those ostensibly private conversations, Jackson claimed, included “planned strikes or protests, pay, benefits, deliveries, driving and warehouse conditions, unionizing efforts, and whether workers had been approached by researchers examining Amazon’s workforce.”
Although the panel rejected Jackson’s challenge to its jurisdiction to hear the appeal, rooted in the argument Amazon didn’t bring its motion to compel under the Federal Arbitration Act, the majority opinion agreed with his contention the 2016 agreement applies, even as Amazon insisted Flex drivers’ acceptance of that agreement included a pledge to abide by succeeding versions by continued use of the Flex smartphone application.
Schroeder said Amazon never showed Judge Hayes proof of the notice it argued it sent Flex drivers in October 2019 or any evidence Jackson received such a notice, meaning Hayes’ opinion represented a correct application of contract law.
“Although we have experienced a technological revolution in the way parties communicate, technological innovation has not altered these fundamental principles of contract formation,” Schroeder wrote. “Mutual assent requires, at a minimum, that the party relying on the contractual provision establish that the other party had notice and gave some indication of assent to the contract.”
In her partial dissent, Graber first agreed with the majority’s stance on the panel’s jurisdiction and the applicability of the 2016 service terms. The difference, she explained, was her view of the arbitration clause in that agreement, which she said should’ve led the panel to reverse Judge Hayes’ opinion and remand with the instruction to order the issue to arbitration.
Graber based that position on a clause in the 2016 contract stipulating Flex drivers and Amazon agree to resolve disputes “on an individual basis through final and binding arbitration” and said her disagreement “should not be mistaken for approval” of the alleged conduct. But the majority said Jackson’s allegations “involve employer misconduct wholly unrelated to the parties’ agreement,” Schroeder wrote, adding Graber confused the motivation for the alleged privacy violations by framing it as a dispute about working conditions — the content of the messages Jackson said Amazon improperly accessed.
“Resolving Jackson’s claims would involve considerations relating to the Facebook groups such as whether the groups were in fact private and whether Amazon had been permitted to read the groups’ posts,” Schroeder wrote. “And although membership in Jackson’s proposed class would require participation in the Amazon Flex program, the controversy in this case is ultimately not about any characteristics or conduct of class members, but whether Amazon is indeed liable for wiretapping and invasion of privacy.”
Amazon is represented in the matter by Morgan Lewis & Bockius, of Washington, D.C., Los Angeles and Houston
Jackson is represented by attorneys from Bursor & Fisher, with offices in New York and California.