GrubHub Case Could Hinge on Interstate Commerce Understanding

If the ketchup packets that come with a cheeseburger were manufactured outside Massachusetts, or if a convenience store stocks its shelves with cleaning supplies that had been shipped across state lines, are the GrubHub drivers who deliver them to Bay State customers engaged in “interstate commerce”?

The Supreme Judicial Court’s answer to that question could determine the arc of a labor lawsuit against the gig economy giant.

Attorneys for GrubHub and a group of former drivers suing the company appeared before the state’s highest court Monday, arguing whether couriers on the platform count as “transportation workers engaged in interstate commerce” and therefore whether an underlying case in which the drivers allege GrubHub violated state wage laws should be pushed into arbitration.

Last year, a Suffolk Superior Court judge ruled that although the plaintiffs had signed arbitration agreements with GrubHub, they were exempt from the Federal Arbitration Act because they sometimes delivered sealed products manufactured outside Massachusetts, making them part of the flow of interstate business.

“What we have here is we have pre-packaged goods coming from a distributor into a 7-Eleven or into a convenience store or into a gas station — a soda, paper towels, napkins,” Eric LeBlanc, who represents the quartet of former drivers who sued GrubHub, told SJC justices. “The whole purpose of 7-Eleven obtaining those goods is to sell them, which creates a situation where the flow of commerce … is not interrupted.”

Theane Evangelis, an attorney for GrubHub, called the decision a “total outlier” compared to case law in other parts of the country. She said the app’s drivers connect customers to food and other products available at local businesses, which is “not part of a continuous stream of interstate commerce.”

Or, as Justice Dalila Argaez Wendlandt summarized it while questioning Evangelis, “Justice Wendlandt is now ordering a bag of potato chips in her home in Massachusetts from a Massachusetts entity — at the time it’s ordered for its interstate journey, that journey ends at the 7-Eleven nearby.”

“That’s exactly right,” Evangelis replied.