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Tuesday, February 11, 2020

A District Court decision

This is interesting, to be sure.

U.S. District Judge William Alsup on Monday ordered DoorDash to individually arbitrate employment misclassification claims brought by more than 5,000 couriers, denying its request to pause the proceedings and slamming the company's "hypocrisy" in requiring workers to sign arbitration and then seeking classwide litigation.

Perhaps someone should send this article to Patreon:
Rejecting claims that the legal process it forced on workers is unfair, a federal judge Monday ordered food-delivery service DoorDash to pay $9.5 million in arbitration fees for 5,010 delivery drivers’ labor demands against the company.

“You’re going to pay that money,” U.S. District Judge William Alsup said in court. “You don’t want to pay millions of dollars, but that’s what you bargained to do and you’re going to do it.”

Barred from filing labor suits in court under the terms of a required arbitration contract, 6,250 DoorDash drivers brought their claims to an arbitrator. Last fall, the American Arbitration Association found each worker met the minimum requirements for filing a claim and ordered DoorDash to pay $12 million in fees. The workers paid $1.2 million in filing fees, or $300 per case.

DoorDash refused to pay its share of fees, arguing the workers failed to specify how much money they were seeking or prove they had a valid arbitration deal with the company.
Another informative article on the subject can be found here. Notice how all of the companies that force arbitration on their employees and consumers in order to avoid class action lawsuits are desperate to avoid actually entering arbitration with them. They're trying to have their legal cake and eat it too.

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33 Comments:

Blogger Keith February 11, 2020 1:26 PM  

Is the gist of this result that the judge basically told the company "you guys need to read your own agreement you made all these people sign" ?

Blogger Sean February 11, 2020 1:31 PM  

If 5010 people can bring a company to its knees, imagine a legion under a dark lord can do...

Blogger SirHamster February 11, 2020 1:44 PM  

Keith wrote:Is the gist of this result that the judge basically told the company "you guys need to read your own agreement you made all these people sign" ?
A little better.

"You guys are going to comply with the agreement that you drafted and made all these people sign."

Blogger Johnny February 11, 2020 1:45 PM  

I think the way it worked traditionally is that you could sue for unfairness, but it had to be a relatively extreme. Egregious. If it becomes an ordinary criteria, then it would amount to the judiciary rewriting deals to the liking of the judge.

We had a neighbor who bought a business property under a land contract for $450,000, and then couldn't make a go if it. He sued and got the deal written down $250,000. No fraud involved, and I am unclear what justified the write down. Judicial activism I suppose. The guy was a nephew to the seller.

What I don't get about this stuff is how they can have someone write away their own legal rights. I would think that part of the contract would just be struck from the contract. Not that I know about this stuff.

No law background, but this business of some crowd funding websites withholding the collected funds strikes me (so to speak) as egregious.

Blogger carnaby February 11, 2020 1:51 PM  

The glacial pace of this law stuff is almost as hard to bear as the cost and uncertain outcome.

Blogger Krymneth February 11, 2020 1:58 PM  

Rediscovering why Chesterton's fence was there in the first place. Class actions were a form of protecting companies against exactly this form of legal issue.

"Oops."

Blogger Up from the pond February 11, 2020 2:20 PM  

Such companies want nothing less than the return of indentured servitude and slavery.

They will get it by hook or crook, including bringing in a 3rd world workforce, which is easily exploitable. Or abolishing minimum wage laws. But they would prefer to see the 13th and 14th Amendments to the U.S. Constitution abolished.

If you think I exaggerate, think again. As America turns Turd World, you will see increased pressure to circumvent those Amendments, and finally to ignore them altogether.

This is why it's so important to crush these Angry Nerds and Spiteful Mutants wherever they are found.

Blogger awildgoose February 11, 2020 2:43 PM  

DoorDash, like every other company who insists their employees/customers sign up for these agreements, arrogantly assumed that:

1) They would never enter the arbitration process
2) Even if they entered arbitration the process would work in the company's favor
3) Even if arbitration went against them the damages would amount to pocket change

It's always fun to see assumptions like these get upended.

Another fun situation that upends assumptions is exercising your at-will employment rights.

Management staff will incoherently sputter and flail about because they cannot process the idea that the employee could ever be in a position or have a reason to take advantage of their at-will rights.

Oops.

Blogger Gregory the Tall February 11, 2020 2:57 PM  

I think Google is vulnerable to being sued by many thousand businesses over the fact that Google does not care to remove unreasonably nasty and negative reviews (e.g. one star reviews by people who only ever posted that review) about these businesses even when the businesses concerned have flagged those unjustified reviews repeatedly through the "Mybusiness" review flagging option.

Blogger JG February 11, 2020 3:15 PM  

I went googling to find out about DoorDash. Raised $2.06B, lost $450M on sales of something between $50-100M in 2019. Valued at a ridiculous $12.6B. $9.5M in arbitration fees won't kill them, but each arbitration will cost them, for outside legal counsel, 5x the arbitration fees?

Blogger Oswald February 11, 2020 3:50 PM  

Arbitration clauses blow. Glad a big company is getting burned by them.

Blogger Newscaper312 February 11, 2020 3:52 PM  

@4 Johnny
Reminds me of all those elementary school field trip forms where you are supposedly waiving all rights to sue the school. I just don't see how they are fully enforceable. Its one thing if my kid is walking across the parking lot not paying attention and trips and breaks an arm, but quite another if their bus crashes because of missed maintenance or a drunk bus driver, or something happens because the kids were left completely unchaperoned for a while.

@11 JG
Third party valuation of stock held by other people is not the same as cash in the bank, or actual positive cashflow for paying debts. Presumably some sucker will take that 'value' as justification for loaning them the cash.

Blogger map February 11, 2020 4:52 PM  

Newscaper312 wrote:I just don't see how they are fully enforceable. Its one thing if my kid is walking across the parking lot not paying attention and trips and breaks an arm, but quite another if their bus crashes because of missed maintenance or a drunk bus driver, or something happens because the kids were left completely unchaperoned for a while.

I believe these are called "exclusionary clauses." They are like hospital liability waivers or restaurant liability waivers. They are legally unenforceable.

Blogger rikjames.313 February 11, 2020 5:02 PM  

The other fear is that with normal corporate arbitration clauses(not union) the company usually has a say in who is listed for the 'panel' the arbitrators are drawn from. That means the decision makers have a large impetus to favor the company.

In this case, either Doordash didn't word the clause correctly--which is a real possibility, I have been on some smaller deals with smaller net companies and they like to hire 2 or 3 good C-suite level lawyers, and the rest are inexperienced lawyers who are either family connected or diverse; or

The drivers organized in such a way they can counter Doordash pressuring the arbitrators.

Ether way, I am fine with it.

Blogger bodenlose Schweinerei February 11, 2020 5:24 PM  

Valued at a ridiculous $12.6B

The idea that value of publicly traded stocks has any real connection to the "value" of the underlying companies is absurd, nearly as absurd a notion as the on that the "stock market" has anything useful to do with the economy. It's pure propaganda pimped by leeches on Wall Street, whose original purpose is long dead.

Blogger Ransom Smith February 11, 2020 5:28 PM  

Without the Arbiter, the Covenant would have broken long ago.

Blogger maniacprovost February 11, 2020 5:30 PM  

Arbitration is not a bad thing. it's just a court, provided by the free market, paid for by the same giant corporations that pay for the real courts.

Would it be economically feasible to make the rubble bounce using lawyers with $10,000 retainers?

Blogger Mitch Connor February 11, 2020 5:43 PM  

Vox, last week you said to be on the lookout for updates from other companies regarding changes to their TOS, specifically the arbitration clauses. Today got an email from Quara regarding exactly that. Once again you were proven right. Can't wait to find out more about exactly what the Legal Legion has been up to.

Blogger basementhomebrewer February 11, 2020 5:53 PM  

Someone who thought they were a very smart boy coming up with that
arbitration "loop-hole" is being cursed by the industry as a whole right about now.

Blogger Damelon Brinn February 11, 2020 6:26 PM  

What I don't get about this stuff is how they can have someone write away their own legal rights.

It's always been my understand that you can't. If you could, companies would use it all the time. Willing to work for less than minimum wage? Fine, just sign this waiver. Want to sell cooked food without a permit? Fine, just get your customers to sign something. You can't do it.

But online companies have always felt like they were outside the normal rules. The Internet being unregulated and almost completely untaxed led to online businesses thinking the other rules didn't apply to them either, and they've been able to convince most of their users that it's the case.

I don't know how many people I've heard say, "Well, it's a private business," as if that's relevant. I just look at them, puzzled, because I know they wouldn't have that reaction if it was something like a car mechanic or a pharmacist claiming to have no liability for anything.

Blogger furor kek tonicus ( according to the 13th Amendment, Slavery is neither Cruel nor Unusual: MSAGA ) February 11, 2020 7:02 PM  

7. Up from the pond February 11, 2020 2:20 PM
they would prefer to see the 13th and 14th Amendments to the U.S. Constitution abolished



the 13th Amendment permits slavery.

Blogger Rick T February 11, 2020 7:14 PM  

ALsup is a techie judge, taught himself Java to better understand Oracle vs. Google and ruled that APIs could not be copyrighted.

He seems to be one of the saner judges out there.

Blogger Kiwi February 11, 2020 7:57 PM  

"The workers say DoorDash misclassified them as independent contractors and denied them employment benefits, such as minimum wage and overtime"

Do we know if these accusations are correct?

Blogger RedJack February 11, 2020 8:03 PM  

Kind of like union arbitration.

It is all fun and games till the result isn't what they wanted.

Blogger Up from the pond February 11, 2020 8:34 PM  

>>"the 13th Amendment permits slavery."

Incarceration for crimes is not slavery. It is done to protect law-abiding people from criminals, not to make money off the criminals. Even with privatization of prisons.

If the purpose of incarceration were money-making, then there would be a hell of a lot more prisoners, and they would all be working their butts off.

Stop reading Black "history" and get some common sense.

Blogger Lazarus February 11, 2020 8:58 PM  

Vox makes lawyrin' understandable.

Blogger Ransom Smith February 11, 2020 9:06 PM  

Do we know if these accusations are correct?
Probably. Uber did the same thing.
All of these modern Silicone Valley companies are broke and cheat however they can.

Blogger Benjybear February 11, 2020 10:44 PM  

All hail the dark lord. Ahead of the curve yet again.

Blogger Troushers February 11, 2020 11:32 PM  

He has interesting history from the Texaco / Ecuador case too, though in that case IMO he let the company off the hook for their own bone-headed decisions.

Blogger furor kek tonicus ( according to the 13th Amendment, Slavery is neither Cruel nor Unusual: MSAGA ) February 12, 2020 1:22 AM  

25. Up from the pond February 11, 2020 8:34 PM
Stop reading Black "history" and get some common sense.



try reading the text of the amendment and get some language comprehension.

"Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2. Congress shall have power to enforce this article by appropriate legislation.
"


prison plantations are also a real thing, but that doesn't have anything to do with the fact that a judge could CONSTITUTIONALLY assign a miscreant to you as a slave as punishment for a crime.

of course, sentencing guidelines don't normally recommend slavery ... but that's a separate issue.

Blogger sysadmn February 12, 2020 11:26 AM  

Cernovich has a nice take on this with respect to Patreon (https://www.cernovich.com/patreon-mandatory-arbitration/) pointing out that California law limits the arbitration cost if it is mandatory. Consumer costs cannot exceed $250, and employer/employee costs are limited to $400.

Blogger CarpeOro February 12, 2020 2:06 PM  

With that valuation I put them in the same basket as FaceBook-Google-mortgage derivatives. All part of the con to drain value by inflating the fiat bubble. Had a friend argue we couldn't go back to a gold standard because there wasn't enough to cover the money in the system. The truth is there is enough gold to cover value. The con would breakdown if exposed to a money system that wasn't so easy to manipulate.

I recall Vox wasn't much impressed with H. Beam Piper's "Space Viking", but I think the jabs he got in against Social Security and fiat money were done well along with fitting into the story.

Blogger OneWingedShark February 12, 2020 3:35 PM  

Johnny wrote:I think the way it worked traditionally is that you could sue for unfairness, but it had to be a relatively extreme. Egregious. If it becomes an ordinary criteria, then it would amount to the judiciary rewriting deals to the liking of the judge.
That's kind of true, but even more than that: it has long been held in jurisprudence that in the case of contractual ambiguity the 'favor' would go against the drafter of the contract — this was to help to balance the power (between the parties) and temper the use of ambiguity.

Up from the pond wrote:Such companies want nothing less than the return of indentured servitude and slavery.

They will get it by hook or crook, including bringing in a 3rd world workforce, which is easily exploitable. Or abolishing minimum wage laws. But they would prefer to see the 13th and 14th Amendments to the U.S. Constitution abolished. If you think I exaggerate, think again. As America turns Turd World, you will see increased pressure to circumvent those Amendments, and finally to ignore them altogether.

You are correct.
It's also why they HATE the overt nationalism of the NBC requirement for President: a President who is of his People will naturally want his own people to do well.

basementhomebrewer wrote:Someone who thought they were a very smart boy coming up with that arbitration "loop-hole" is being cursed by the industry as a whole right about now.
There are some BIG "smart-boy" things commonly accepted in law… ones I would dearly love to see used.

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