Appeals Court Rejects Forced Arbitration in Courier Wage Case

A Win for "Gig Economy" Workers

On March 17, 2026, the U.S. Court of Appeals for the First Circuit affirmed denial of a delivery company's motion to compel arbitration and allowed the plaintiff to pursue his class action wage claims to proceed in court. The case — Abdisalam v. Strategic Delivery Solutions — involves allegations that the defendant misclassified medical supply couriers in Massachusetts as independent contractors and failed to pay wages under Massachusetts law. The defendant sought to force arbitration based on a contract with a corporate entity that it requried the plaintiff to form, but both the district court and the First Circuit rejected that effort.

The First Circuit held that the threshold question of whether the plaintiff was bound by the arbitration agreement was properly decided by the court, not an arbitrator. Applying Massachusetts contract law, the Court concluded that the plaintiff was not a signatory to the "vendor agreement" containing the arbitration clause because he only signed it on behalf of his corporation. As a result, the arbitration clause did not apply to him in his personal capacity, and the defendant could not rely on delegation clauses or other contractual language to compel arbitration.

The Court also rejected the defendant’s alternative theories for enforcing arbitration, including equitable estoppel and claims that the plaintiff received direct benefits from the agreement. It found that any benefits flowed to the corporate entity, not the individual plaintiff, and that the plaintiff’s statutory wage claims did not depend on the contract. With the First Circuit’s affirmance, the plaintiff’s claims — brought on behalf of himself and a proposed class of similarly situated couriers — will proceed in federal court, marking an important victory for workers challenging forced arbitration and misclassification practices.

Ruling Clarifies Limits of Arbitration in Worker Classification Cases

The First Circuit’s decision is significant because it confronts a common tactic used by “gig economy” companies to sidestep employment obligations: requiring workers to form their own “corporations” and then contracting with those entities instead of the individuals performing the work.

Businesses increasingly rely on this "corporate-to-corporate" structure to impose arbitration clauses and shield themselves from wage-and-hour liability, even where the reality of the relationship closely resembles traditional employment. By rejecting that approach, the decision reinforces that companies must live with the consequences of the contractual arrangments they insist upon.

The plaintiff in Abdisalam is represented by Brant Casavant at Fair Work. The attorneys at Fair Work have extensive experience representing workers who have been misclassified as independent contractors and not received all the wages and benefits owed. If you are a "gig" worker who has questions about your employment status or the way you're getting paid, contact us for a confidential consultation.