Help Me With Sign Washington Travel Agency Agreement

Help me with document type sign travel agency agreement washington

amazon was involved in two cases one in the first circuit one in the ninth circuit where class action attorneys were that were representing independent contractors they were arguing that these people were misclassified and they should be employees and they filed a class-action lawsuit against amazon in court and there was a battle over the arbitration clause and whether they could be in court or whether they could be an arbitration welcome to the contract tear down show from law insider where legal experts tear down contracts from some of the most well-known companies and high-profile executives around the world in this episode attorney margot thomas breaks down the amazon flex independent contractor agreement's arbitration clause this is a hot subject right now as a case disputing this clause is likely to appear before the supreme court margot points out the presence of conspicuous language the lack of clear jurisdiction and a drafting attorney's duty to make sure parties signing these agreements are well informed there's a lot writing on how you draft the arbitration clause so let's tear it down hey everybody i'm mike whalen welcome back to the contract tear down show on this show we do what the title sounds like we take contracts with smart friends and beat them up uh we talk about the different sections in there what you should do as a drafting attorney how you might improve it uh today i've got my friend margot thomas how are you today margo i'm doing good how are you i am okay it's early you made me wake up because you're on eastern time so i am here i am marginally awake and alive we are going to talk through some interesting documents so what i want to do real quick margot if you don't mind is share my screen and i'm going to show people these two documents there are two of them um this is the first one it's the independent contractor terms of service for amazon flex and this is a later version that we're going to talk about what i want to ask you to do real quick for me marco is tell me the difference between these two documents what are they why are there two why do these documents matter to lawyers dealing with this kind of thing so the first document was the original terms of service that amazon delivery drivers were required to sign to use the app to make local deliveries and then recently amazon had updated terms of service which is a longer document more in depth that they made delivery drivers um agree to so that they can in order to continue um working for amazon well and our smart guests will have probably seen the the pacer number at the top you know the cause number at the top because it's it's in court tell me about that what's going on with this case that makes it really relevant to pay attention to right now so amazon was involved in two cases one in the first circuit one in the ninth circuit where class action attorneys were that were representing independent contractors they were arguing that these people were misclassified and they should be employees and they filed a class action lawsuit against amazon in court and there was a battle over the arbitration clause and whether they could be in court or whether they could be in arbitration so amazon lost in both of those courts on this issue the arbitration clause was deemed unenforceable which we're going to talk about today and amazon has it teed up the ninth circuit case to go to the supreme court which you know we'll we'll find out soon whether um the you know the high court is going to give some guidance on this arbitration issue with some new amy coney barrett drama uh which is exciting uh exciting to a certain kind of person let's be honest uh so we're gonna start uh we're gonna focus on this uh the second version that's the one that is really before the court uh there's a bit of a procedure that was required that we'll talk about later to accept this particular one but i want to stop uh start up at the top um because this is where the language gets super explicit uh it says you and amazon this is the second paragraph of the whole agreement you and amazon agree to resolve disputes between you and amazon on an individual basis through bold final and binding arbitration talk to me about the language at this second paragraph and like the location of it yes we're in the second paragraph of this 15-page document and it's all caps in bold um talking about you are waving your right to go to court you are agreeing to arbitration and the reason that this is in the second paragraph before we even get to the numbered paragraphs is because this is a substantial right that you are giving up by signing this agreement and amazon wants to head off the argument that this was inconspicuous and people didn't see it and was buried in you know 8.5 on page 15 in a footnote and they don't want to hear that argument when somebody says this clause is unenforceable they want it to be upfront and personal and that's why it's here that's why it's in the second paragraph and that's why it's an uppercase right so what we'll do now is actually jump down to the arbitration clause this is down in 11 and looking at a you know you've got a lot of prominent words again you've got this all cap we've talked about this in previous episodes you've got this language you're trying to smack people with and in a it talks about subject to your right to opt out of arbitration which comes below the parties will resolve uh by final and binding arbitration rather than in court any dispute in cl or claim whether based on contract common law statute etc etc what about this first intro paragraph in the arbitration clause so they're repeating what's in the second paragraph but now it's in more more in-depth and it's very broad when they say contract common law or statute um that's basically everything any kind of claim that you can bring you're going to arbitrate and you're giving up your right to go to court have it decided before a judge which we would be public a public record arbitration is usually private and confidential and there is no transcript of the proceedings or what happened um i mean you're just giving up a lot of rights for any claim that you want to bring so they are making it they're repeating the language um because it's so important in this agreement they don't want it to be missed and they don't want you know they want to preempt an argument from attorneys that people did not consent they didn't understand um and they didn't see it well and jumping down to i in the same section it talks about the process for if you want to do arbitration these are all the steps you have to go through it talks about making the demand in writing you've got to describe the claim first class mail here's the address there's quite a long process for filing fees for aaa rules tell me about this paragraph that talks about what you have to do if you want to arbitrate so this paragraph is extremely interesting because it talks in detail about the fees and the reason that that's important is because in court there's usually a 400 or less filing fee in arbitration there's a sliding scale filing fee which means the amount in dispute determines how much you have to pay to get there so it could be triple which you would pay in court to go to arbitration and arbitrators in court there's a judge that's usually paid by tax dollars in arbitration there is a private arbiter who you're paying per hour could be 400 500 an hour to hear your dispute and sometimes there are even panels of arbitrators so there's three people that you're paying hourly to hear a dispute arbitration can be very expensive and a lot of class action attorneys who are usually the ones you know arguing and battling with big business about the enforceability of arbitration clauses they argue that these type of arbitration is unconscionable meaning people can't afford it it's too expensive um so a way that amazon is trying to craft around that in this language is they're saying you know you only have to pay the first 200 of the filing fee and then we'll pay the rest so it makes it you know you're not going to be priced out of of getting this relief and then another issue is a lot of arbitration clauses say you know we're amazon we're based in washington you need to arbitrate here where we are and if you're in maine that's a huge inconvenience i have to you know litigate this case across the country so amazon is put in here that the arbitration will take place at a mutually convenient location within 45 miles of the last location which you provided services so if you're delivering packages in maine you don't need to go to washington to arbitrate the case so they're trying to make it fair for individuals that are forced into arbitration which can be a significant burden and prohibit people from being able to use this remedy because of the cost and location so they're trying to even the playing field even though you know a lot of people would argue that arbitration is not an even playing field they're at least trying to to even the playing field on these two issues which come up commonly when people are arguing that these um provisions are unconscious hey everybody i'm mike whalen i hope you're enjoying this episode of the contract tear down show real quick i want to ask you to do me slash you really a quick favor look down below you'll see a discount code to join the law insider premium subscription when you do that you get access to more content like this you'll see webinars daily tips on contract drafting not to mention access to the world's largest database of sample contracts and clauses it will help you write better contracts faster if you want to do it right now there's a code below so get there also if you're part of a larger team if you're in-house or in a law firm just email us we're at sales law insider.com we'll make sure you get a deal as well come join us in the community the code is below let's get back to the show localness is a huge issue because these drivers i mean just in this program just so people know this program is the local drivers at the end this is not a truck that's traveling across the nation you know from washington to maine right this is a local driver all they're doing is local deliveries and so that that localness is like fundamental to this case and you had mentioned in an email to me a previous case uh again amy coney barrett's uh relevant finding talk to me just a little bit by way of background that that localness issue and how that's coming up in this case so that issue is one of the main reasons why this arbitration clause was found unenforceable because under the federal arbitration act which is mentioned later on in paragraph j of this agreement it says that this is governed by the federal arbitration act and the federal arbitration act has an exemption for transportation workers that are involved in interstate commerce which means people driving goods it's normally interpreted as people driving goods across state lines that's what interstate commerce usually means so these people are just driving in their neighborhood they're last mile delivery drivers they're not crossing state lines they're driving across the street around the corner to deliver packages so in that amy conant barrier decision that had to do with grubhub and in this amazon in these amazon court cases the court has found that these delivery drivers are involved in interstate commerce because they look at the entire flow of commerce like amazon got this product from you know who knows california and then they shipped it to a warehouse in the middle of the country and then you know then it got shipped again to this last mile delivery driver despite the fact that they're only delivering it around the corner they're part of this very long process that is a part of interstate commerce so that's really the big issue about the enforceability yeah and she talked about you know if you're arguing that doing something local that might have had some tie to where this thing originated that that theoretically dry cleaners could say i'm cleaning a dress that came from taiwan and therefore i'm dealing in interstate commerce when really they're just like a local business down the street so i i actually i want to ask you to jumping down to jay and then this relationship with 12 this is actually you mentioned the basis upon which they decided that this thing was too vague so jay says the parties agree the federal arbitration act and all that apply but then down in 12 it talks about the governing law talk to me about the relationship between those two sections so the way this is written it's as if the federal arbitration act is going to apply and that there's no exception that will ever be relevant to these delivery covers and i think that's an error with this because we're talking about last mile delivery drivers there should be a clause in here that says specifically about these last mile delivery drivers that the this is tailored to people who are working locally it doesn't say that in here it's very broad and general it could apply to anybody in any place but it doesn't say that we're talking about local delivery drivers so it says this is governed by the federal arbitration act and then when you look at paragraph 12 it says the state of washington laws will apply except for section 11 which is the arbitration clause so it that means that if there is an exception which is what they argued in these cases and the federal arbitration act does not apply then what what fills the gap right we're not going to washington law because you just said that washington law doesn't apply so now we have an ambiguity and that's why these agreements have been deemed unenforceable that's why you should put into the agreement in the uh in the event and this may be a very far-off possibility that the federal arbitration act doesn't apply we need to have a gap filler we need to know where we go to next and preferably if you really want to go to arbitration you're going to put in a state law that's favorable to arbitration either they have some arbitration laws that don't have an exemption for interstate commerce or the drivers or class of people that you're trying to send to arbitration or they have some type of contract principles that are going to interpret this agreement as you know binding arbitration but that's that's what's lacking right so if they had had some some kind of backstop clause that said this is what's going to happen in the event that the faa does not apply then this contract would have actually been okay this arbitration clause would have actually been okay presumably it likely would have been enforceable on that issue yeah and i you know it's a theme that is sort of interesting to me is the distinction between the the legal effect of drafting a certain way and the nudge effect of drafting a certain way because a lot of times you know contracts don't come up in fights you're just trying to get people to behave a certain way right and so i'm i'm looking back at 12 and it sort of again this prominent language all caps uh it says whether to agree to arbitration is an important decision then they talk about if you wish to opt out of this agreement the arbitration agreement here's all the steps that you have to do what's interesting uh in this litigation and in this appeal is that the the original document the original agreement was once you sign up you're pushing through a bunch of buttons to sign up and you click a button to say i agree to the old version which was much shorter far less substantive than this one is and then with this one you had like an affirmative duty to opt out right uh if you don't want this new version if you want to stay on the old version you have to push some specific buttons and and you and i were talking about this before the call i'm i'm imagining i worked in logistics before going to law school i'm imagining a local driver they've got 10 deliveries to do that morning they're a college student you know what i or they're a family that's got all other kinds of things going on it's 20 20 for pete's sake and they're they just want their deliveries and now with this one in order to go get your deliveries you have to push through and accept again i'm curious your tak on arbitration clauses generally and the idea that i'm giving up a big substantive right therefore as a drafter who's coming up with a process that somebody has to affirmatively go through to waive that right to get rid of that right to a hearing what do you think about this was this good enough did this do enough social nudging for you i i think the issue really resolves around consent and whether people are knowledgeable about the rights that they're giving up and amazon is drafting it this way or making additional requirements for you not to you know for you to opt out of this agreement um they're making it more difficult for you to do that and they want everybody to opt in i mean that's that's the reason they want to be in arbitration arbitration is extremely favorable for them so to make it more difficult for you to get your packages and go on your deliveries if you don't agree to this i mean that's exactly what they're trying to do and the issue that i have with the underlying issue is do people really know what they're consenting to anyway even if you were to read you know the 15-page document that includes this arbitration clause in bold underlined highlighted you know do you really understand what rights you're giving away and i don't think that it really addresses that it doesn't say that you're gonna have very um it doesn't talk about the fact that this is going to be private versus public and there may be no transcript and you're not gonna know what other decisions or how many cases in arbitration amazon has had with this particular arbitrator and whether they're more favorable to our you know to amazon whether they've decided a thousand arbitration decisions in amazon's people you're not gonna know that you know you're not gonna have uh the rights that you would have in court and i just don't think that it's detailed enough when you talk about consent and knowledgeable consent so that somebody can really analyze what they're giving up by by clicking these buttons yeah and that might get to you know our closing section as we close up we usually talk about general principles i you know however i feel about arbitration clauses there are certainly a lot of companies that want lawyers in in the drafting position to make sure that that thing can be enforceable so thinking about general principles what kind of things can we take from this example if we're the drafting attorney that says i'm going to draft a good arbitration clause that i know is going to be enforceable and part of that by the way might be answered by the end of this this you know going through the supreme court right right i think the takeaways are amazon did a very good job of making this conspicuous i think that you should put it on the first page in the first or second paragraph and then you can repeat it later on in the agreement i think amazon did a really good job of putting it in bold and upper case and underlining it and making it conspicuous in order to head off an argument that you know we didn't see it we didn't know um it's not on the forefront of the documents so i think that that is a definite takeaway in a lot of states jury trial waivers need to be conspicuous anyway and they need to be um you know in uppercase or they need to stand out in the documents so i think that's the number one takeaway the number two takeaway is i see a lot of cases where it doesn't or a lot of clauses where it doesn't say who's going to pay for arbitration where it's going to take place they usually say the governing body it's going to be aaa or it's going to be jams but it doesn't say the details of the payments and i think that if you are dealing with a company that's in arbitration a lot it's probably a good idea to lay out those details like amazon did here you're going to pay the first 200 we're going to pay the rest if they're admin fees we're going to pay those if they're arbitrator fees we're going to pay those however you want to divvy that up um the more you can make that you know even and favorable to both parties i think that's a really good idea i think you should put that in the document but the the takeaway as far as the um choice of law provision is really you need to put in something else something more than what amazon put in here about um the either you need to craft it towards the specific group of people that you're trying to that that are going to sign this agreement you've got to talk about them what they're doing you know what they're not doing you got to put that in the agreement or you've got to say that if the federal arbitration act does not apply this state law is going to apply and that state law likely needs to be a state law that's going to enforce your arbitration provision it brings up a kind of a tangential issue about can you let's say you're in you know ohio and ohio does not have our state arbitration law that's favorable to you and it's not likely that if the federal arbitration act doesn't apply that the state law is going to put you in arbitration it raises the issue about whether you can say okay well we want you know michigan law to apply um there's a lot of issues surrounding using you know case law or or you know the laws of jurisdictions that aren't directly connected to your contract but that's something you certainly have to research because you don't want it to go to state law and then them reach the same conclusion that arbitration doesn't apply so it's something to look into so i would say amazon did a really good job on conspicuous they did a really good job on you know evening the playing field on the fees and the location but they didn't do such a great job on this issue about choice of law yeah and this is a case worth paying attention to so what we're going to do if you go to linesider.com resources we'll have show notes for this episode you definitely want to look up this case and pay attention to it it looks like it might be going to the supreme court there's a chance that it might not if they can resolve a couple of circuits that that seem like they're contradictory but might be read as okay so we'll see what the supreme court does so just go to law insider.com resources for the show notes uh margo if people want to get in touch with you to talk more about this case but also the the other work that you do in dealing with these kinds of clauses and litigation what's the best way to reach out to you so our website is thomaslawplc.com or they can shoot me an email at m thomas thomaslawplc.com that's awesome i appreciate it and again guys go to lawinsider.com resources to read about this case and the show notes and also if you want to be a contributor to the contract tear down show to be one of the nerdy friends that hangs out with me to talk about contracts clauses you don't get enough of this in your life uh just email us at community law insider dot com and we will see you guys next time on the show thanks again margo thank you