In Wallace v. Grubhub Holdings, Nos. 19-1564 & 19-2156 Cons. (7th Cir. August 4, 2020), the Seventh Circuit affirmed the trial court’s granting defendant’s motion to compel arbitration of plaintiffs’ lawsuit alleging violations of Fair Labor Standards Act. The plaintiffs were defendant’s drivers who delivered food that had been ordered either online or through mobile devices. These drivers had entered into agreements calling for arbitration for any and all claims arising out of their relationship with Grub Hub. The plaintiffs argued that the residual clause of section 1 of Federal Arbitration Act (FAA) exempted them from any mandatory arbitration of their claims since they qualified as a class of workers engaged in foreign or interstate commerce. Nevertheless, the Court of Appeals found that the District Court could properly find that the exemption from arbitration in section 1 did not apply to the Grub Hub drivers because the plaintiffs failed to show that they were engaged in the channels of foreign or interstate commerce. The mere fact that the food may have come to plaintiffs from out-of-state did not require a different result, even though plaintiffs delivered the food orders to local customers.
