Delegating Arbitrability To Arbitrator Is Effective In Denying Class Actions
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I have been making my way through the rest of the May arbitration cases (the photo shows how high my stack got), and one thing that stands out is this: I was right. Delegation clauses remain a hot topic in arbitration law.
Three recent cases demonstrate the power of having a delegation clause in an arbitration agreement.
The Fifth Circuit enforced a delegation clause in Edwards v. DoorDash, 2018 WL 1954090 (5th Cir. Apr. 25, 2018), a case involving a putative FLSA class action brought by “Dashers.” Not to be confused with reindeers who pull Santa’s sleigh, these Dashers deliver restaurant food to people’s homes. And they all signed an Independent Contractor Agreement with an arbitration agreement. That agreement called for AAA rules and waived class and collective actions. In response to the filing of the class action, DoorDash successfully moved to compel individual arbitration. On appeal, the class representative argued the arbitration agreement was unconscionable. But once the Fifth Circuit was satisfied that the independent contractor agreement was validly formed, it found the incorporation of AAA rules was a valid delegation clause that the plaintiffs had failed to challenge. The case was sent to arbitration.
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