Did Circuit 11 clarify the FAA transport worker exemption or did it just create a circuit division? | Baker

In a notice published on June 22, the Eleventh Circuit established a clear test for exemption from Section 1 of the Federal Arbitration Act (FAA). He answered the recurring question “Who is a transport worker?” ” See Hamrick v. Partsfleet, LLC, n ° 19-13339, 2021 WL2546405 (11th Cir. 22 June 2021). Hamrick involved last mile delivery drivers who transported goods and materials shipped out of state to local warehouses and then to “their final destination” by the driver. Hamrick used his personal car to bring auto parts from warehouses in Lakeland and Tampa, Fla. To local Advance Auto Parts retailers.

While Hamrick signed an independent contractor agreement, he eventually brought a class action lawsuit under the Fair Labor Standards Act (FLSA) to seek compensation for overtime, declaratory damages and remedies and the like, claiming that he and other drivers were misclassified.

The district court had dismissed the companies’ petition to force arbitration because the drivers were “transport workers” under the section 1 exemption, who transported goods that circulated in interstate commerce and were at the heart of their work. The district court also refused to require arbitration under the state arbitration law because independent contractor agreements were “governed by the [FAA]. “

The eleventh circuit

The eleventh circuit inverted with instructions. The appeals court formulated a simple test for exemption based on circuit precedent. The first element is that the worker “must belong to a category of workers” employed in the transport industry “. . “2021WL2546405 at * 7. Based on its analysis, the Eleventh Circuit (with Judges Branch, Luck and Ed Carnes on the panel) quashed the district court order dismissing the arbitration request and remitted the case so that the lower court may apply the appropriate standards based on circuit jurisprudence. Finally, the court found that it lacked jurisdiction to review the district court order refusing to grant the motion to require arbitration under state law.

Only a few days after the issuance of the Hamrick opinion, the Eleventh Circuit was again faced with questions regarding the FAA Section 1 exemption, in particular Martins v Flowers Foods, Inc., Case No. 20-11378. the Martins The case concerned the distribution of Flowers Foods products in intra-state territories. On July 9, 2021, the court overturned the district court’s order that the distributors were “transport workers”. The court’s per curiam order (with Justices Wilson, Newsom and Anderson in the panel) stated:

“On June 22, 2021, this Court delivered its opinion in Hamrick v Partsfleet, LLC,. . . which ruled that the FAA exemption for transport workers only applies if the worker belongs to a class of workers in the transport industry and the class of workers actually engages in foreign trade or interstate. We hereby CANCEL the order of the District Court on appeal and REFER this matter for further consideration in light of Hamrick. “

Now, appellant Curtis Hamrick has asked the Eleventh Circuit to grant a new bench hearing and review of its earlier panel decision, as it “conflicts with the tribunal’s 11th Circuit binding precedent, the authority of the Supreme Court and unnecessarily creates a split between the circuits “. Specifically, the petition for a new bank hearing, filed on July 13, 2021, asserts that “upholding the panel ruling would unnecessarily create a divided circuit over whether a class of workers must physically cross state borders to be “engaged in commerce” under FAA section 1. . . exemption ”, citing Waithaka v Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020); Wallace v Grubub Holdings, Inc., 970 F.3d 798 (7th Cir. 2020) and Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020).

We touched on the obscure and sometimes conflicting standards the courts have applied to determine the coverage of the Section 1 exemption in our blog posts for June 1, 2020, August 7, 2020, November 11, 2020, and March 1, 2021. Part of the confusion stems from different interpretations of the language of the exemption – “a class of workers engaged in foreign or interstate commerce”. Interpreted in the broad sense, the language could almost sweep any person delivering food or goods or even airport passengers. But is this what was planned when the FAA was adopted in 1925? Probably not. As the Hamrick opinion explained, the district court concluded that the drivers were covered by the exemption because “the goods in issue[origine[d] in interstate commerce and [were] delivered, unprocessed, to their destination.

But the district court’s emphasis on “the movement of goods and not on the working class” was wrong. Based on Hill v. Rent-A-Center, Inc., 398 F.3d 1286, 1290 (11th Cir. 2005), the exemption only applies when “the worker belongs to a category of workers in the transport industry and the working class effectively engages in foreign or interstate commerce. Username. at 1290. (Emphasis added.)

Therefore, Hamrick reversed but left it to the remanded district court to determine whether the drivers actually met the highest standard. And the eleventh circuit subsequently sent the Martins the case before the district court for application of the same standard.

Placed in this context, it seems unlikely that the Court of Appeal will grant a bench review in Hamrick when it has formulated more stringent standards consistent with the circuit authority, which may eliminate some of the lingering uncertainty regarding the definition of “transport workers”. Given this result, a circuit split is not a critical event.

Conclusion:

In Hamrick, the Eleventh Circuit established a more practical test for determining who constitutes a transport worker. Whether this test conflicts with tests of other circuits is of less importance if it is in fact based on the language of the FAA.