Abernathy v. Doordash, Inc.

Background

The petitioners were 5,879 DoorDash couriers who alleged that DoorDash improperly classified them as independent contractors rather than employees. Their contracts contained an arbitration provision governed by the Federal Arbitration Act. The provision covered disputes relating to the agreement, including the couriers’ classification, and waived class, collective, and representative proceedings.

The contracts required arbitration through the American Arbitration Association (AAA). Under the AAA rules, each individual was required to pay a $300 filing fee and the responding company was required to pay a $1,900 filing fee. Counsel filed arbitration demands for 2,250 individuals in August 2019 and 4,000 more in September 2019. The couriers paid more than $1.2 million in filing fees. DoorDash told the AAA that it would not pay nearly $12 million in administrative fees, and the AAA later stated that DoorDash had not paid the requested fees for the individual matters.

The petitioners then filed these federal proceedings to compel arbitration. DoorDash also asked the court to stay the proceedings while a proposed class settlement in a related California state action was considered. The petitioners separately sought relief under California Senate Bill 707, including attorney’s fees and costs, and asked to keep certain materials under seal.

Motion to Compel Arbitration

Under the Federal Arbitration Act, a court determines whether a valid arbitration agreement exists and whether it covers the dispute. The court found that 5,010 petitioners had submitted declarations stating that they clicked through DoorDash’s AAA arbitration agreement. It held that those agreements were valid, covered the claims at issue, and required arbitration before the AAA.

The court granted the motion to compel arbitration as to those 5,010 petitioners and ordered DoorDash to immediately commence AAA arbitration with them.

The remaining 869 petitioners submitted witness statements rather than the declarations the court had requested. Those statements did not provide enough identifying information or adequately reference the specific arbitration agreement each person had accepted. The court therefore denied the motion to compel arbitration as to those 869 petitioners.

The court also referred factual questions about the authority of petitioners’ counsel to the AAA. It stated that if counsel had overstated its authority, or if the petitioners had not properly established their right to arbitrate for another procedural reason, the arbitrator should require counsel to reimburse DoorDash for arbitration fees, attorney’s fees, and related expenses incurred in defending the arbitration.

California Senate Bill 707

The petitioners asked DoorDash to pay arbitration-related attorney’s fees and costs under California Senate Bill 707. The court concluded that the law did not apply retroactively because the relevant events occurred before the law took effect. The court also noted that the AAA had closed the petitioners’ arbitration files in November 2019. It denied the petitioners’ request for relief under Senate Bill 707.

Motion to Stay

DoorDash sought a stay until final approval of the proposed settlement in the related state-court class action. The court denied the motion to stay. It stated that the petitioners wanted individual arbitration and expected them to opt out of the state-court class action if the settlement were approved. The court also warned that seeking both class-action relief and individual arbitration could lead to an order requiring reimbursement of DoorDash’s fees and expenses.

Motion to Seal

The petitioners had filed an unopposed motion to seal portions of a reply brief, a declaration by Aaron Zigler, and attached exhibits. The materials concerned communications between the Conflict Prevention & Resolution organization and DoorDash’s counsel about arbitration filing fees and a proposed mass-arbitration protocol.

The court denied the motion to seal. It reasoned that a confidentiality designation alone did not justify withholding the materials from the public and that the communications could help the public evaluate the arbitration organization’s impartiality. The documents were to remain under seal for 14 calendar days while a party could seek relief from the court of appeals. If no relief was granted, the documents would be made public.

Disposition

The motion to compel arbitration was granted in part and otherwise denied. It was granted as to 5,010 petitioners and denied as to 869 petitioners. DoorDash’s motion to stay was denied. The petitioners’ request for relief under California Senate Bill 707 was denied. The motion to seal was denied, subject to the 14-day period before the materials were to be made public.