In an echo of the February decision in the DoorDash case (Abernathy v. DoorDash, Docket No. C 19-007545), Senior District Judge Sandra Braun Armstrong required Postmates, a food delivery app and service, to honor the arbitration agreements it had drafted and required all of its couriers to sign. Adams v. Postmates, (N.D. Ca. 3/5/20) (Docket No. 19-3042 SBA). Postmates, like DoorDash, forced its drivers to bring all their disputes with Postmates to an arbitrator and required them to waive their rights to bring class or collective actions against the company.
When, in March and April 2019, an attorney filed 5,274 individual arbitration demands against Postmates on behalf of couriers who claimed that Postmates had violated the Fair Labor Standards Act by misclassifying them as independent contractors, Postmates balked. It refused to pay the approximately $10 million in arbitration filing fees that the agreement required, claiming that the individual demands did not comply with the terms of the agreement. When the individual claimants moved in federal District Court to compel Postmates to arbitrate the claims, the court rejected Postmates’ argument that the court should block the claimants’ attempt to do an “end-run” around the class action waiver by bringing allegedly “generic” claims that amounted to a “de facto class action.” The Court compelled arbitration, which meant that Postmates had to pay the arbitration fees that were due.
Postmates appealed to the Ninth Circuit Court of Appeals and asked the District Court to stay its order pending the outcome of the appeal. The District Court rejected the request because it found that Postmates had little likelihood of success on appeal and would not suffer irreparable harm if it had to pay the arbitration fees that were due. Judge Armstrong showed the same impatience with Postmates’ attempt to avoid the consequences of the arbitration agreement it required its drivers to sign as Judge Alsup did with DoorDash’s similar pleas. Judge Armstrong stated:
“Postmates also is hard-pressed to complain about the amount of filing fees due. Under the [arbitration agreement], a courier cannot sue Postmates in court; rather, the courier has no choice other than to submit a demand to the arbitrator to adjudicate his or her grievance. Because of the Class Action Waiver, each courier cannot proceed on a class basis but must instead submit an individual demand. As a result, Petitioners did what they are contractually required to do: submit individual arbitration demands to the arbitrator. The mere fact that Petitioners filed over 5,000 demands within a short span of time does not transform those individual demands into a de facto class arbitration, as Postmates posits. But more fundamentally, Postmates’ obligation to tender $10 million in filing fees as a result of those arbitration demands is a direct result of the [arbitration agreement]—which Postmates drafted and which Postmates required each courier to sign as a condition of working for Postmates. It strains credulity for Postmates to argue that the amount of filing fees due constitute irreparable harm when that “harm” is entirely of its own making.”