Bahamonde v. Amazon.com Services LLC

Background

Javier Bahamonde and Dajane Sanders, plaintiff employees, brought a proposed class action against Amplio Logistics and Amazon.com Services LLC. They alleged violations of California labor laws involving overtime pay, meal and rest breaks, and wage statements. Bahamonde worked for the defendants for approximately three days, and Sanders worked for approximately eight months. Their duties included loading packages and delivering them.

When Amplio hired the plaintiffs, each signed a document titled “Mutual Agreement to Individually Arbitrate Disputes.” The agreement covered claims arising from employment and specifically included claims involving minimum wages, overtime, unpaid wages, wage statements, and meal and rest breaks. It also included a class-action waiver requiring the employee and company to pursue only individual claims. Amplio moved to compel arbitration, and Amazon joined the motion.

Federal Arbitration Act exemption

The Federal Arbitration Act generally requires courts to enforce valid arbitration agreements. But Section 1 of that law exempts contracts involving certain transportation workers engaged in interstate commerce.

The court defined the relevant group as Amplio delivery drivers who make deliveries for Amplio’s clients exclusively within California. It then concluded that the drivers were directly involved in interstate commerce because they delivered goods with out-of-state addresses to California consumers. Under controlling Ninth Circuit precedent, a worker does not have to cross state lines personally to qualify for the exemption when the worker plays a direct and necessary role in moving goods across state borders.

The court also held that Bahamonde qualified as part of the exempt group even though he did not complete deliveries. He had been hired and trained to perform the same delivery work as the other drivers, and the exemption applied to the class of workers rather than only to the individual worker’s completed tasks.

Enforceability under California law

Because the Federal Arbitration Act did not apply, the court analyzed the agreement under California law. The plaintiffs argued that California Labor Code sections 229 and 432.6 prevented arbitration.

The court held that Section 229 applied only to the ninth cause of action, which sought unpaid vacation pay after termination under Labor Code section 227.3. That claim involved the collection of unpaid wages and could proceed without regard to the arbitration agreement. The court held that the other claims—including claims for penalties, minimum wages, meal and rest breaks, and wage statements—did not fall within Section 229’s exception as presented in the complaint.

The court rejected the plaintiffs’ argument that Section 432.6 made the arbitration agreement unenforceable. Although that statute restricts employers from requiring certain waivers as a condition of employment, Ninth Circuit precedent held that it does not itself invalidate an already executed arbitration agreement.

Unconscionability

The plaintiffs also argued that the agreement was unconscionable, meaning so unfair in how it was formed or in its terms that it should not be enforced. The court found some procedural unconscionability because the agreement was a standardized employment contract presented on a take-it-or-leave-it basis. But the court found little evidence of surprise or pressure because the arbitration language was prominent and employees had to scroll through the agreement before accepting it.

The court found that part of the agreement was substantively unconscionable, meaning its terms were excessively one-sided. In particular, one subsection extended arbitration to claims involving Amplio’s relationships with customers, vendors, or other third parties, including claims unrelated to the plaintiffs’ employment. The agreement also applied indefinitely after employment ended and extended certain arbitration benefits to broad groups of related entities and third parties without a reciprocal benefit to the plaintiffs.

The court severed, or removed, that subsection rather than invalidating the entire agreement. The court concluded that the central purpose of the agreement—arbitrating employment-related claims—remained lawful and enforceable after the subsection was removed. With the offending language severed, the court held that the agreement was not unenforceable as unconscionable.

Class-action waiver

The court separately considered the class-action waiver because the agreement required a court, rather than an arbitrator, to decide disputes about the waiver. Applying California’s four-factor test, the court found that three factors supported invalidating the waiver: the potential individual recoveries were modest, employees could fear retaliation, and employees might not understand their legal rights. The plaintiffs did not make a particularized showing about other practical obstacles to bringing individual claims, so the fourth factor favored Amplio.

Because three of the four factors were satisfied, the court ruled that the class-action waiver was unenforceable under California law. The court did not invalidate the arbitration agreement itself on that basis.

Disposition

The court granted in part and denied in part Amplio’s motion to compel arbitration. It compelled arbitration of all of the plaintiffs’ causes of action except the ninth cause of action for unpaid vacation pay under California Labor Code section 227.3. The court stayed the litigation of the claims compelled to arbitration while arbitration was pending.

The court deemed the class-action waiver unenforceable. Because the parties had not addressed how to proceed with the unpaid-vacation claim, the court kept the July 30, 2025 case-management conference on the calendar and ordered the parties to meet and confer and submit a joint statement about that claim.