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Carmona v. Dominos Pizza (9th Cir. 21-55009 12/23/21) Arbitration/Pizza Delivery Drivers/FAA Exemption 

Dominos PizzaThe panel affirmed the district court’s order denying Domino’s Pizza, LLC’s motion to compel arbitration in a putative class action brought by Domino’s drivers, asserting violations of various California labor laws.

The district court denied the motion based on its finding that the drivers were a “class of workers engaged in foreign or interstate commerce,” and were therefore exempt from the requirements of the Federal Arbitration Act (“FAA”), notwithstanding their contracts with Domino’s that provided claims between the parties be submitted to arbitration under the FAA.

Section 1 of the FAA exempts from the arbitration mandate certain employment contracts, including “workers engaged in foreign and interstate commerce,” referred to as the “residual clause.” The exemption applies if the class of workers is engaged in a “single, unbroken stream of interstate commerce” that renders interstate commerce a “central part” of their job description. Capriole v. Uber Techs., Inc., 7 F.4th 854, 866 (9th Cir. 2021).

Domino’s contended that the drivers who delivered goods to individual Domino’s franchisees in California were not engaged in interstate commerce because the franchisees, all located in California, placed orders with the supply center in the state, and the goods delivered were not in the same form in which they arrived at the supply center. The panel disagreed. The panel held that Rittman v., Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon package delivery drivers, was instructive. Like Amazon, Domino’s was directly involved in the procurement and delivery of interstate goods, was involved in the process from the beginning to the ultimate delivery of the goods to their destinations, and its business included not just the selling of goods, but also the delivery of those goods. The alteration of the goods at the supply center did not change the result. The panel concluded that, as with the Amazon drivers, the transportation of interstate goods on the final leg of their journey by the Domino’s drivers satisfied the requirements of the residual clause.