Dive Brief:
- Two delivery drivers for Bimbo Bakeries USA and Bimbo Foods Bakeries Distribution can’t be compelled to arbitrate a state law misclassification claim because they are transportation workers excluded from coverage under the Federal Arbitration Act, a federal district court in Massachusetts held Mar. 16.
- Per the ruling in Igwenagu v. Bimbo Bakeries USA, Inc., the drivers — one individually and the other as the owner of a delivery business — signed distribution agreements with Bimbo designating them as independent contractors with the exclusive right to purchase and resell Bimbo’s bakery products within a particular area. The business owner’s distribution agreement and a prior settlement agreement the individual driver signed required them to arbitrate all disputes they had with Bimbo.
- The drivers sued the companies under Massachusetts law, alleging they were misclassified as independent contractors and deprived of proper wages. The district court refused to compel arbitration and allowed their case to proceed.
Dive Insight:
Bimbo Bakeries did not respond to a request for comment prior to press time.
Although the company has been involved in a different misclassification case under the Fair Labor Standards Act, this ruling involves Bimbo’s attempt under the FAA to compel the Massachusetts delivery drivers to arbitrate their state law claim.
The FAA establishes a “liberal” policy favoring arbitration agreements, but it provides an exemption for a “contract of employment” of transportation workers engaged in interstate commerce, the court explained…