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Wickberg v. Lyft, Inc.

United States District Court, D. Massachusetts

December 19, 2018

ERIC WICKBERG, on behalf of himself and all others similarly situated
v.
LYFT, INC.

          MEMORANDUM AND ON DEFENDANT'S MOTION TO COMPEL ARBITRATION

          RICHARD G. STEARNS, UNITED STATES DISTRICT JUDGE

         Eric Wickberg is the plaintiff in this putative class action brought against Lyft, Inc. The Complaint alleges that Lyft misclassified him and other potential class members as independent contractors, rather than employees, and avoided paying them the minimum wage and overtime. Lyft now moves to stay the action and compel arbitration or, in the alternative, to strike the class allegations. For the reasons to be explained, Lyft's motion to compel arbitration will be allowed.

         BACKGROUND

         Lyft is a ridesharing platform that uses a smartphone application to connect riders with available drivers for a fee. Wickberg is a Massachusetts resident who has driven for Lyft since September of 2017. When he enrolled online as a driver with Lyft on January 28, 2017, Wickberg clicked a checkbox that stated, “I agree to Lyft's [September 30, 2016] terms of services.” Lauzier Decl. (Dkt # 16) ¶¶ 10-12.[1] As shown in the image below, the words “Lyft's terms of services” were highlighted in pink and hyperlinked to the written terms. Id. ¶ 12.

         (Image Omitted)

Id. ¶ 11.

         Among other provisions, the terms provided in capital letters that drivers must “SUBMIT CLAIMS . . . AGAINST LYFT TO BINDING AND FINAL ARBITRATION ON AN INDIVIDUAL BASIS, NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY CLASS, GROUP OR REPRESENTATIVE ACTION OR PROCEEDING.” Id. ¶ 16. On May 3, 2018, Wickberg reaffirmed acceptance of a nearly identical arbitration provision posted by Lyft on February 6, 2018. However, on May 20, 2018, Wickberg wrote to Lyft's General Counsel stating that he “would like to opt out of arbitration with respect to claims that are not part of a pending settlement action.” Lieu Decl. (Dkt # 18), Ex. C.

         DISCUSSION

         A party seeking to compel arbitration pursuant to the Federal Arbitration Act (FAA) must show “‘(1) that a valid agreement to arbitrate exists, (2) that the movant is entitled to invoke the arbitration clause, (3) that the other party is bound by that clause, and (4) that the claim asserted comes within the clause's scope.'” Ouadani v. TF Final Mile LLC, 876 F.3d 31, 36 (1st Cir. 2017), quoting InterGen N.V. v. Grina, 344 F.3d 134, 142 (1st Cir. 2003). “‘[E]xcept where the parties clearly and unmistakably provide otherwise, it is the court's duty to interpret the agreement and to determine whether the parties intended to arbitrate grievances concerning a particular matter.'” Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 375 (1st Cir. 2011), quoting Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 301 (2010) (citations omitted in Dialysis). “‘When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.'” Cullinane v. Uber Techs., Inc., 893 F.3d 53, 61 (1st Cir. 2018), quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Under Massachusetts law, courts “have held that . . . clauses [in online contracts] will be enforced provided they have been reasonably communicated and accepted and if, considering all the circumstances, it is reasonable to enforce the provision at issue.” Ajemian v. Yahoo!, Inc., 83 Mass.App.Ct. 565, 573 (2013), aff'd, 478 Mass. 169 (2017).

         Reasonable Notice

         Wickberg argues that the agreement to arbitrate is invalid because the September 30, 2016 terms were not reasonably communicated for several reasons. First, the terms appear “three-quarters of the way down” on a screen that offers “no contextual clue” that the driver is entering into a binding contract with Lyft. Opp'n (Dkt # 19) at 6. Second, the placement of the terms could be read to suggest that they referred to the driver's personal information or the use of the promo or referral codes. Third, the terms were “buried amidst a multi-screen sign-up process.” Id. at 8. Fourth, the terms are “the smallest font on the page and . . . visually dwarfed by other more prominent text.” Id. at 9. And finally, the hyperlinked text “is not italicized, bolded, underlined, or in classic blue coloring to indicate that it is a hyperlink.” Id. As a result, most drivers, according to Wickberg, “would not think they were agreeing to a binding employment contract; they would not realize that they could click on the hyperlink to view the contract's terms, nor would they have reason to know that there was an arbitration provision in Lyft's contract.” Id. at 10.

         Wickberg primarily relies on Cullinane v. Uber Techs., Inc.[2] In Cullinane, the First Circuit, applying Massachusetts law, invalidated an Uber arbitration agreement because it did not reasonably notify Uber's riders of its terms. 893 F.3d at 64. The Court determined that the layout and design of Uber's registration screen rendered the hyperlinked “Terms of Service & Privacy Policy” insufficiently conspicuous. Id. at 63-64 (“Even though the hyperlink did possess some of the characteristics that make a term conspicuous, the presence of other terms on the same screen with a similar or larger size, typeface, and with more noticeable attributes diminished the hyperlink's capability to grab the user's attention.”).

         However, as Lyft points out, Uber's agreement in Cullinane is notably different from Lyft's. The First Circuit explained in Cullinane that:

Uber chose not to use a common method of conspicuously informing users of the existence and location of terms and conditions: requiring users to click a box stating that they agree to a set of terms, often provided by hyperlink, before continuing to the next screen. Instead, Uber chose to rely on ...

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