On Tuesday, a Los Angeles, California judge paused the Amazon Flex Drivers’ suit against the company until its appeal concludes. The court opined that the appeal presents an arbitrability question of first impression for the Ninth Circuit and that Amazon could suffer irreparable harm absent a stay.
In September, Judge William Q. Hayes issued a decision denying the company’s motion to compel arbitration in the wiretapping suit. Specifically, the court concluded that Amazon’s 2016 rather than 2019 terms of service (TOS) applied. It further held that the plaintiff’s claims fell outside those contemplated by the TOS because “the alleged wrongs ‘do not arise out of or relate to the 2016 TOS, Plaintiff’s participation in the Flex program, or Plaintiff’s performance of services.’”
Amazon filed a notice of appeal with the Ninth Circuit and subsequently asked the court to pause proceedings until the higher court could address its case. The plaintiff opposed.
In this week’s ruling, Judge Hayes wrote that “[t]here are few cases applying California mutual assent law to the modification of terms in an internet agreement, and there are even fewer factually similar cases applying California law to determine whether certain tort claims fall within the scope of an employee arbitration agreement.” As such, the court adjudged the arbitration issue novel and the e-commerce company’s appeal a serious merits question.
Judge Hayes also opined that Amazon could be irreparably harmed absent a stay considering the difference in the cost outlay between litigating a class action and proceeding in arbitration. “In addition, arbitration offers the benefits of ‘speed and economy’ which may be ‘lost forever’ if Amazon is required to engage in formal discovery prior to the resolution of its appeal,” the ruling said. Finally, the court said that a stay was in the public interest because it would conserve judicial resources.
The Flex Driver is represented by Bursor & Fisher P.A. and Amazon by Morgan, Lewis & Bockius.
