Federal Court of Appeals rejects Dynamex’s motion to compel arbitration against non-signatory
NOVEMBER 28, 2017 | INDEPENDENT CONTRACTORS, ARBITRATION, WAGES + OVERTIME
Stephen Churchill and Rachel Smit recently prevailed in opposing an appeal filed by Dynamex Operations East, LLC – also known as TF Final Mile LLC – with the United States Court of Appeals for the First Circuit.
The plaintiff in that case had worked for Dynamex as a delivery driver. He brought suit in 2016 alleging that Dynamex had misclassified him as an independent contractor and failed to compensate him properly under Massachusetts law and the federal Fair Labor Standards Act. Dynamex moved to compel the plaintiff to arbitration, relying on an “independent contractor agreement” that it had entered into with a third-party vendor (with whom Dynamex had required the plaintiff to “associate”). The plaintiff never signed the agreement, however, and was not identified as a “party” whose claims would be subject to arbitration.
The District Court denied Dynamex’s motion to compel arbitration. Dynamex then appealed to the First Circuit. On November 21, 2017, the First Circuit denied Dynamex’s appeal, ruling that the plaintiff was not subject to arbitration under the terms of Dynamex’s agreement with its third-party vendor. In so holding, the First Circuit rejected Dynamex’s argument that the plaintiff was bound by the terms of the agreement under agency, equitable estoppel, and third party beneficiary theories. You can find a copy of the First Circuit’s decision here.