Amazon Loses Motion to Compel Arbitration in Flex Driver’s Wiretapping Suit

On Wednesday, Judge William Q. Hayes ruled that the plaintiff, an Inc. delivery driver, does not have to arbitrate claims that his employer spied on him and other independent contractor drivers who discussed a range of employment issues in “closed” or private Facebook groups. The San Diego, California court held that the claims fall outside of the applicable terms of service’s (TOS) arbitration provision.

The 2020 class action partly concerns Amazon’s Flex program, through which the e-commerce company crowdsources delivery partners through a smartphone application. According to the complaint, approximately 800 Flex drivers joined closed Facebook groups to discuss employment issues like “strikes, protests, pay, benefits, deliveries, working conditions, and unionizing efforts.” The plaintiff has reportedly been a closed group member since 2016.

The lawsuit asserts that Amazon secretly monitored and wiretapped the groups through its Advocacy Operations Social Listening Team. The defendant allegedly monitored and intercepted posts in real time using automated tools. The plaintiff accuses Amazon of doing so without his consent in violation of the federal Wiretap Act, the Stored Communications Act, and parallel California causes of action.

In March, Amazon moved to compel arbitration, dismiss, or, in the alternative, to stay the case. The matter was fully briefed over the ensuing months and argued in August.

This week’s opinion considered which TOS applies, a 2016 or a 2019 version, which law governs whether a valid agreement to arbitrate exists, and whether the scope of the arbitration agreement encompasses the plaintiffs’ claims. Judge Hayes concluded that the 2016 TOS applies because he could not conclude from the allegations in the complaint or Amazon’s evidence that an October 2019 email provided the plaintiff with individualized notice of the agreement’s existence and substance sufficient to demonstrate that the plaintiff assented to the 2019 TOS.

The parties also disputed whether the arbitration provision in the 2016 TOS was void for lack of governing law. The opinion first found that as an Amazon Flex driver, the plaintiff was exempt from the Federal Arbitration Act’s (FAA) coverage provisions, per circuit precedent. Second, Judge Hays reasoned that California law applies because the “plain language of the 2016 TOS does not preclude application of California law to the arbitration provision in absence of the FAA.”

Lastly, the court overrode Amazon’s contention that there is no serious dispute that the plaintiff’s claims fall within the scope of the arbitration provision. The opinion explained that the alleged unlawful acts “do not arise out of or relate to the 2016 TOS, Plaintiff’s participation in the Flex program, or Plaintiff’s performance of services.” As such, Judge Hayes held that the plaintiff met his burden of demonstrating that his claims fall outside the scope of the arbitration clause and, accordingly, denied the motion to compel.

The plaintiff is represented by Bursor & Fisher P.A. and Amazon by Morgan, Lewis & Bockius.