If local Grubhub Inc. drivers deliver a restaurant’s desserts made from chocolate that traveled all the way from Switzerland, should that be enough to keep their wage claims in court? The Seventh Circuit recently said no, drawing a distinction that could send gig economy employment battles to private arbitration.
Although the chocolate may have crossed borders, the delivery drivers themselves didn’t, the U.S. Court of Appeals for the Seventh Circuit said August 4. This means they didn’t engage in “interstate commerce,” which would have allowed them to avoid arbitration agreements they signed with their employer.
Whether drivers are transportation workers in interstate commerce—and therefore can escape the reach of a federal law that favors arbitration of legal disputes—is one of several debates surrounding app-based companies like Grubhub, Uber Technologies Inc., and Lyft Inc.