GrubHub delivery drivers rerouted by arbitration agreement

The Federal Arbitration Act (FAA) was enacted in 1925 to counter American courts’ general hostility toward the enforcement of private arbitration agreements and foster a liberal federal policy favoring arbitration. One exception: The FAA exempts from its coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” A recent decision by the U.S. 7th Circuit Court of Appeals (which covers Illinois employers) addressed the contours of the exemption.

There’s an app for that

For those of you living under a rock over the past number of years, GrubHub is a platform for diners to order takeout from local restaurants. The company calls itself an “online and mobile food-ordering and delivery marketplace.” When a diner places an order through the app, GrubHub transmits the order to the restaurant, which then prepares the diner’s meal. Once the food is ready, the diner can either pick it up or have GrubHub dispatch a driver to deliver it.

GrubHub says its drivers are independent contractors, not employees. Drivers in various cities (Chicago, Portland, and New York), however, claim otherwise and filed suits alleging in part that the company failed to pay them overtime as required under the federal Fair Labor Standards Act (FLSA).

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