Federal Judge Asks Postmates to Explain Why It Hasn't Moved Forward With Courier Arbitrations
U.S. District Judge Saundra Brown Armstrong asked the company to explain why it should not be held in contempt for violating her prior order forcing Postmates to arbitrate more than 5,000 worker misclassification cases brought on behalf of individual couriers.
December 03, 2019 at 05:04 PM
4 minute read
A federal judge in Oakland is asking Postmates Inc. to explain why the company should not be held in contempt for violating her order compelling the company to arbitrate more than 5,000 worker misclassification cases brought on behalf of individual couriers.
U.S. District Judge Saundra Brown Armstrong of the Northern District of California issued a show cause order Tuesday after the couriers' lawyers at Keller Lenkner asked her last week to hold the company in contempt. Postmates, they wrote, failed to pay its portion of the filing fees in the 5,257 cases brought on behalf of couriers at the American Arbitration Association, resulting in AAA administratively closing the cases.
The plaintiffs lawyers noted this marks the second time that AAA has administratively closed the cases after Postmates has refused to pay its share of the fees. The plaintiffs initially went to federal court and secured an order from Armstrong compelling arbitration in October when the company previously refused to pay after raising concerns about the adequacy of the plaintiffs' requests for arbitration. Armstrong's order compelled the company to arbitrate under the terms of its agreement with couriers, but left any dispute regarding the content of those agreements, including disputes over fee payment, to the arbitrator.
The plaintiffs claim that the company has asked to put the majority of the cases on hold while arbitrations move forward on "fifty randomly selected claimants."
"Asking more than 99 percent of Petitioners to abandon their hard-won rights under the Court's Order was an attempt by Postmates to avoid complying with the Order, not a good-faith attempt to comply with it," wrote the plaintiffs lawyers at Keller Lenkner.
Gibson, Dunn & Crutcher partner Theane Evangelis, who represents the company, said in an email that "Postmates looks forward to presenting the full record to the Court, so it can see for itself that Postmates is not in contempt of its order."
Keller Lenkner managing partner Travis Lenkner said in an email that the firm's "motion and the court's order speak for themselves."
Keller Lenkner also represents thousands of DoorDash couriers in two separate actions seeking to compel individual arbitration—another case where the firm is facing off against opposing counsel at Gibson Dunn. Last week, the firm asked Armstrong's Northern District colleague Judge William Alsup in San Francisco for a temporary restraining order against the company after it required couriers to sign a new arbitration agreement, with a different alternative dispute resolution forum, to pick up jobs through the app. The updated click-through agreement was rolled out one day after AAA closed out thousands of cases against DoorDash for failure to pay $4.275 million in filing fees. Alsup called DoorDash and Gibson Dunn's attempt to wiggle out of its own arbitration agreement "poetic justice" at a hearing last week. The plaintiffs, however, withdrew their TRO request after company lawyers said at the hearing that couriers who opt-out of the new agreement can still pursue their individual arbitration claims with AAA.
Earlier in the Postmates case, lawyers at Gibson Dunn labeled Keller Lenkner's tactics "a shakedown" and claimed that the firm attempts to use the case administration fee charged by arbitrators in individuals cases to leverage outsize settlements. In the footnote of an order compelling arbitration in Postmates case, Armstrong wrote "the possibility that Postmates may now be required to submit a sizeable arbitration fee in response to each individual arbitration demand is a direct result of the mandatory arbitration clause and class action waiver that Postmates has imposed upon each of its couriers."
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