Be Careful What You Wish For
Not long after we hit the “publish” button on our article The Myths Of Arbitration, we discovered that two federal judges had thoughtfully provided even more evidence that businesses should not reflexively insert arbitration clauses in their standard-form agreements.
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Be Careful What You Wish For

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17

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MARCH, 2020

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Written by
Mark M. Leitner
Joseph S. Goode

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Not long after we hit the “publish” button on our article The Myths Of Arbitration, we discovered that two federal judges had thoughtfully provided even more evidence that businesses should not reflexively insert arbitration clauses in their standard-form agreements. Thousands of years ago, Aesop warned: “be careful what you wish for; you may get it.” Tech darlings Postmates and Doordash didn’t listen to Aesop, but we suspect they are paying attention now.

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Postmates and Doordash are technology companies that offer apps allowing customers to order restaurant food for home delivery. The food is delivered by “couriers,” drivers unsurprisingly deemed to be independent contractors rather than employees by both Postmates and Doordash. Likewise, both Postmates and Doordash include in their “independent contractor” agreements arbitration clauses that obligate “couriers” to arbitrate all disputes arising under the agreements, including disputes over their status as independent contractors. Making sure they dotted all I’s and crossed all T’s, lawyers for both companies also required the couriers to waive the right to bring or be part of a class action in court or in arbitration. Nailed it all down!

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I’m an Image Caption ready-to-use.

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Photograph by Lorem Ipsum via Unsplash

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“Nailed it all down! Including their own private parts, as it turned out.”

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Including their own private parts, as it turned out. Postmates got hit with 5,274 individual arbitration demands claiming that its couriers were actually employees. Doordash received 5,879 demands for arbitration of the same issue. Facing filing fees alone of more than $10 million each (with fees for arbitrators at least five or six times that), both companies refused to participate in arbitration, offering flimsy excuses, and the couriers turned the tables, suing in federal court to compel the big companies to honor their promises to arbitrate.

If you have followed the United States Supreme Court’s decisions under the Federal Arbitration Act, you know what happens next: both judges granted the couriers’ motions to compel. We love a great judicial turn of phrase, especially when we agree with it, so we’ll close with some words from the conclusion of Judge William H. Alsup’s opinion in Abernathy v. Doordash, Inc.:

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For decades, the employer-side bar and their employer clients have forced arbitration clauses upon workers, thus taking away their right to go to court, and forced class-action waivers upon them too, thus taking away their ability to join collectively to vindicate common rights. The employer-side bar has succeeded in the United States Supreme Court to sustain such provisions. The irony, in this case, is that the workers wish to enforce the very provisions forced on them by seeking, even if by the thousands, individual arbitrations, the remnant of procedural rights left to them. The employer here, DoorDash, faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order.

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The Times article quotes Judge Malloy: “I don’t want to see anybody deactivated, but I don’t write the legislation.” It also quotes the president of the public interest group, praising the decision because it prevented a state agency from “ignor[ing] clearly written state law.” Top Democrats were quoted as well, contending that the lawsuit was a right-wing political strategy intended to benefit Republicans by suppressing turnout.

So: there is “legislation.” Maybe even “clearly written state law”! WHAT DOES IT SAY? Leaving that out is a serious flaw, because the result depends on what the statute says and how the courts interpret it. Now, I know that I am a law geek; I wasn’t expecting an excerpt from the briefs, but we do know that a statute of some kind was involved. Would it have been so hard to add a paragraph something along the lines of: “The dispute involves a Wisconsin statute that provides X. The public interest group argued that this language required the board to purge the rolls because Y, while the board contended Z”? Apparently that was too much to ask of the Times, so I finished the article with my curiosity unsatisfied.

If the New York Times would not explain the legal issues, could I get some help from Fox News? Nope. The Fox article on Judge Malloy’s contempt order[3] has lots of rhetoric from both the conservative side (cheers!) and the liberal side (boos!) but fails to explain even in simple terms the legal issues in the case. Fox did summarize the original decision, saying “Malloy last month sided with conservatives who filed the lawsuit and ordered that the voters have their registrations deactivated.” Sure, that literally describes what the judge did – but this language reads like the decision was pure politics, with Judge Malloy raising Rick Esenberg’s hand as if he’d won an MMA match.  I’ve had lots of cases before Judge Malloy, and I have never felt that he exhibits an ideological bias. Who knows, maybe he showed a tilt in this case – but there is absolutely no way to decide that without understanding the law that he was interpreting.

In late February, the Wisconsin Court of Appeals chimed in, reversing Judge Malloy’s order and refusing to require an immediate purge of the voter rolls. I haven’t read the opinion, just media coverage of the decision,[4] so at this point readers will be unsurprised that I still have no idea why any of the courts ruled the way they did, or the legal reasoning they expressed in their decisions. I do know that Mr. Esenberg of the public interest group thinks that under the Court of Appeals’ ruling, Wisconsin won’t have “clean elections,” and the Wisconsin Supreme Court needs to step in to “ensure that the Wisconsin Elections Commission complies with state law.” So now it’s the conservatives’ turn to BOOOOO. And if the conservatives are booing, the liberals must be cheering, right? Sure enough, the Hill’s coverage[5] plays the case as an exercise in pure politics: “A Wisconsin court of appeals handed Democrats a win on Friday by overturning a ruling that sought to purge up to 209,000 people from voter registration rolls.” No one should be surprised that like the Times, Fox, and CNN, the Hill did not think the legal issues at stake worthy of mention, let alone explanation.

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I’ll be blunt: this coverage is garbage, across the board. It is the same deficient “fast but thin” reporting that Representative Amash ripped in his Tweetstorm about the anti-lynching bill that wasn’t. By portraying the courts’ decisions exclusively in terms of their political impact, failing to discuss the legal rules that guide those decisions, reporting helps feed the dangerous perception that law is simply politics played out in another arena. The rule of law is too important to be treated this way.

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row admin_label=”row” custom_padding=”0px|||” padding_mobile=”on” parallax_method=”off” parallax_method_1=”off” parallax_method_2=”off” column_padding_mobile=”on” background_position=”top_left” background_repeat=”repeat” background_size=”initial” _builder_version=”3.7″ disabled=”on” disabled_on=”on|on|on”][et_pb_column type=”1_4″][/et_pb_column][et_pb_column type=”3_4″][et_pb_divider _builder_version=”3.7″ color=”#898989″ height=”15px” /][et_pb_text text_font=”PT Serif||||” text_font_size=”20″ text_text_color=”#363636″ use_border_color=”off” custom_margin=”30px||0px|” text_font_size_last_edited=”on|tablet” background_position=”top_left” background_repeat=”repeat” background_size=”initial” _builder_version=”3.7″ module_class=”footnote-cd”] [1] https://twitter.com/justinamash/status/1236000636585508864 (return)

[2] https://www.nytimes.com/2019/12/13/us/wisconsin-voter-rolls-purge.html (return)

[3] https://www.foxnews.com/politics/wisconsin-judge-orders-election-commission-to-purge-up-to-209k-names-from-rolls-in-battleground-state (return)

[4] https://www.cnn.com/2020/02/28/politics/wi-appeals-court-voter-purge/index.html (return)

[5] https://thehill.com/regulation/court-battles/485190-wisconsin-court-overturns-plan-to-purge-more-than-200000-voters-from (return)

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ARTICLE

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Concurrences & Dissents

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ARBITRATION

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The Myths of Arbitration

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JOURNALISM

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Dump the Cheering Section. This is Law, Not Sports.

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