A federal appeals panel has ruled Domino's Pizza truck drivers can press a labor violation suit — instead of arbitrate the matter — because they engaged in interstate commerce, despite a hint from the U.S. Supreme Court that a recent high court decision may suggest otherwise.
The July 21 appellate ruling was authored by Judge Andrew Hurwitz, with agreement from Judges Barrington Parker Jr. and Kim McLane Wardlaw, of the U.S. Court of Appeals for the Ninth Circuit. The decision favored Edmond Carmona, Roger Nogueria and Abraham Mendoza in their putative class action suit against Domino's Pizza, which is based in Ann Arbor, Michigan.
Plaintiffs are onetime truck drivers for Domino's, who transported pizza ingredients from a Domino's supply center in California to franchisees, mostly in the San Diego and Los Angeles areas. In 2020, they sued Domino's in Orange County Superior Court, alleging the company violated labor laws, such as by failing to provide meal breaks, reimburse business expenses and not paying drivers for non-driving work hours. Domino's had the case moved to U.S. District Court for the Central District of California.
Senior District Judge James Selna rejected Domino's argument the drivers had agreed in their employment contracts to arbitrate any disputes with the company.
On appeal, the Ninth Circuit affirmed Selna's determination, saying the drivers were exempt from arbitration under the Federal Arbitration Act (FAA), because they are involved in foreign or interstate commerce. The plaintiffs qualified, because they were the "last leg" of a "single, unbroken stream of interstate commerce," according to the Ninth Circuit.
Domino's took the matter to the U.S. Supreme Court, contending the stream was broken, because the ingredients, which originate outside California, stop at the supply center, with the drivers then initiating a new stream by taking the ingredients on to franchisees.
In response, the Supreme Court directed the Ninth Circuit to reconsider its Domino's ruling in light of the High Court's June 2022 decision in Southwest Airlines Co. v. Saxon. In Saxon, the court ruled airline cargo handlers play a "direct and necessary role in the free flow of goods across borders," rebuffing Southwest's argument the handlers must themselves cross borders to be engaged in commerce across state lines.
Judge Hurwitz found the Saxon case did not apply, because it did not address workers more removed from tributaries of interstate commerce, especially "last leg" workers such as Domino's truckers.
In Hurwitz's view, the pertinent ruling was the Ninth Circuit's August 2020 decision in Rittmann v. Amazon.
"The plaintiff drivers in this case [Domino's], like the Amazon package delivery drivers in Rittmann, transport interstate goods for the last leg to their final destinations, they are engaged in interstate commerce," Hurwitz wrote.
Hurwitz brushed aside Domino's contention the commerce chain was snapped when the ingredients arrived at the supply center.
"The [Domino's] drivers operate in a single, unbroken stream of interstate commerce that renders interstate commerce a central part of their job description. Because the goods in this case were inevitably destined from the outset of the interstate journey for Domino’s franchisees, it matters not that they briefly paused that journey at the Supply Center," Hurwitz determined.
Hurwitz added: "The entire journey represented one continuous stream of commerce."
Plaintiffs have been represented by Aashish Y. Desai and Adrianne De Castro, of Desai Law Firm, of Costa Mesa.
Domino's has been defended by Norman M. Leon, Steve L. Hernandez, Taylor Wemmer, Courtney G. Saleski and Jacob Frasch, of DLA Piper, a global firm headquartered in London, with its primary American office in New York City. Domino's has also been defended by Gerson H. Smoger, of Smoger & Associates, of Dallas.
Friend-of-the-court arguments in support of plaintiffs were submitted by Constitutional Accountability Center and American Association for Justice, both of Washington, D.C.