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Amazon can’t duck spying suit through arbitration

Amazon couldn't show its independent contractor drivers ever received emails with updated terms of service that included broader arbitration clauses.

SAN DIEGO (CN) — Amazon cannot force a case claiming it spied on its Flex drivers' private Facebook group chats into arbitration, a Ninth Circuit panel ruled Wednesday. 

In 2021, Amazon Flex driver Drickey Jackson brought a class action against the company, claiming it violated both California’s Invasion of Privacy Act and the Federal Wiretap Act by spying on a closed Facebook group of fellow Flex drivers. In the group, workers talked off-hours about their working conditions, whether they had been talking to people researching Amazon’s labor conditions and unionization efforts. Jackson claims Amazon’s “advocacy operations” department then compiled posts on the Facebook group into a report that was sent further up in the company. 

Amazon Flex is a part of the company’s delivery system where people sign up to make deliveries for the company using their own cars as independent contractors. 

Amazon argued the terms of service agreement that Flex drivers had to sign to work for Amazon mandated that any work-related legal issue has to go to arbitration. But a federal judge rejected that argument, finding wiretapping is not a work related issue.

On Wednesday, U.S. Circuit Judge Mary Schroeder agreed.

“Amazon’s alleged misconduct existed independently of the contract and therefore fell outside the scope of the arbitration provision in the 2016 TOS [terms of service]. The district court therefore correctly denied Amazon’s motion to compel arbitration,” Schroeder, a Jimmy Carter appointee, wrote in a 24-page opinion

When Jackson signed up to work for the company, he signed a terms of service agreement from 2016. Amazon claimed that the court should have looked at the case in light of a 2019 agreement that contained a much broader arbitration clause that forces the question of whether something can be arbitrated to be settled by an arbiter, not a court. 

The company says it sent out an email to all Flex drivers about the new terms of service agreement, and that by continuing to work for Amazon, Jackson and all other Flex drivers agreed to abide by the terms set out in that service agreement. 

But Amazon didn’t produce a copy of that email or any evidence that Jackson got the email.

Under California law, Schroeder wrote, individual notice is necessary to establish mutual agreement. Therefore, Jackson wasn’t bound by the new terms of service agreement. 

“That assertion stands the law’s notice requirement on its head,” Schroeder wrote of Amazon’s argument that Jackson and other Flex drivers should have been monitoring their terms of service agreements for any changes. “The burden is on the party seeking arbitration to show notice and assent. We have previously observed the importance of notice in the analogous context of electronic consumer contracts. We stated that ‘the onus must be on website owners to put users on notice of the terms to which they wish to bind consumers’ as 'consumers cannot be expected to ferret out hyperlinks to terms and conditions to which they have no reason to suspect they will be bound.'” 

Although the Flex drivers are not consumers of Amazon products in this scenario, it’s similarly unreasonable to require them to constantly be on the lookout for any changes in their terms of service agreements, Schroeder said.

U.S. Circuit Judge Susan Graber, a Bill Clinton appointee, agreed with the majority’s reasoning but said the terms of the older service agreement are broad enough for Amazon to force the case to arbitration, since the the Flex drivers’ discussions in their private Facebook group were about work and contract related issues, mainly the possibility of organizing a union.   

“In sum, defendant allegedly spied on plaintiff solely because of plaintiff’s independent contractor relationship with defendant and in order to defeat, preempt, or combat work-related activities by plaintiff and other Flex drivers. Crucially, the only legitimate way to gain access to the closed Facebook group — the source of the alleged privacy violations — is to be an Amazon Flex driver. Viewed in that light, the complaint clearly alleges ‘disputes that have their roots in the relationship between the parties which was created by the contract,’” Graber wrote in a partial dissent. 

Since some employers and independent contractor agreements have certain ethical codes and other rules relating to employee social media use, Graber added the court should also look into if the Flex drivers contract also allows employees to organize in a private Facebook group in the first place. 

“My disagreement with the majority opinion on that legal question should not be mistaken for approval of the defendant’s alleged actions,” Graber wrote about arbitration. “The alleged conduct, if proved, is repellant and may be illegal or tortious.”

U.S. Circuit Judge Michelle Friedland, a Barack Obama appointee, rounded out the panel.

Max Roberts, the plaintiffs' attorney in the case, said he can’t comment on active cases but that "it was a pleasure arguing in front of the Ninth Circuit.”

The attorney for the defense did not respond to a request for comment by press time. 

Categories / Appeals, Business, Employment, Technology

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