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US Supreme Court gives boost to Domino’s in arbitration



(Reuters) – The U.S. Supreme Court on Monday gave a boost to Domino’s Pizza Inc.’s attempt to force delivery drivers to file a wage lawsuit in private arbitration rather than in court in a California case that could have major implications for the gig economy business.

The justices threw out a lower court’s ruling that had allowed a group of drivers to pursue a class-action lawsuit to recover work-related costs because their local deliveries represented the last step in the flow of goods across state lines.

The judges ordered the San Francisco-based 9th US Circuit Court of Appeals to rehear the case in light of the Supreme Court’s unanimous ruling in June that Southwest Airlines Co. could not force a baggage handler overtime compensation lawsuit into arbitration because the workers routinely load cargo onto planes that cross state lines.

A US law called the Federal Arbitration Act requires enforcement of contracts workers sign with companies to arbitrate legal disputes, but it exempts transportation workers engaged in interstate commerce.

More than half of private-sector employees in the United States have signed arbitration agreements, which typically also bar class-action lawsuits. Business groups have called arbitration a faster and more efficient alternative to suing in court. Workers̵

7; advocates have said the process tends to favor employers.

Three delivery drivers sued Domino’s in California state court in Santa Ana in 2020, accusing the company of violating various wage laws, and the case was subsequently transferred to federal court.

Domino’s made a motion to send the claims to arbitration, citing agreements the drivers had signed that prevent them from suing in court. A federal judge in Santa Ana denied the motion, ruling that the drivers were exempt from arbitration because they were involved in interstate commerce.

The 9th Circuit last year upheld the judge’s decision, finding that the drivers were part of getting products coming from outside California to their final destinations. Domino’s then appealed to the Supreme Court.

There have been a growing number of lawsuits filed in courts around the country arguing that local delivery drivers qualify for the interstate commerce exemption because they handle goods that come from other states, such as various ingredients used to make Domino’s pizza and other prepared foods.

The scope of the exemption has divided federal appeals courts in cases involving Grubhub Inc., Uber Technologies Inc. and its subsidiary Postmates Inc. and Amazon.com Inc.’s “last mile” delivery workers.


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