Title: MATHIS v. KERR
Citation: 2024 OK 52
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: June 25, 2024

MATHIS v. KERR Annotate this Case Justia Opinion Summary Spencer Mathis and Jaden Fenstermaker, who worked as delivery drivers for Amazon in Tulsa, Oklahoma, were fired by their employer, James Kerr, after Mathis filed a workers' compensation claim. The plaintiffs alleged that Kerr had retaliated against them for pursuing the claim and filed a lawsuit against him. Kerr moved to compel arbitration based on the arbitration provisions in the plaintiffs' employment contracts. The plaintiffs objected, arguing that federal and state law exempted them from arbitration. The trial court granted Kerr's motion to compel arbitration and stayed the lawsuit until the completion of arbitration. The plaintiffs appealed this decision, but the Court of Civil Appeals affirmed the trial court's ruling. The Supreme Court of the State of Oklahoma granted certiorari to review the case. The court held that employees who deliver Amazon packages are exempt from arbitration under federal law. The court also found that the district court's exclusive jurisdiction over retaliatory discharge claims precluded arbitration of those claims under Oklahoma law. The court reversed the trial court's decision, vacated the Court of Civil Appeals' opinion, and remanded the case for further proceedings. Read more Want to stay in the know about new opinions from the Oklahoma Supreme Court? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Oklahoma Supreme Court. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . MATHIS v. KERR 2024 OK 52 Case Number: 120246 Decided: 06/25/2024 THE SUPREME COURT OF THE STATE OF OKLAHOMA NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. SPENCER MATHIS and JADEN FENSTERMAKER, Plaintiffs/Appellants, v. JAMES KERR, 5280 SOLUTIONS LLC, DASH LOGISTICS LLC, ACCELROUTE LLC, Defendants/Appellees. CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION I Honorable Douglas W. Golden, Trial Judge ¶0 The plaintiffs/appellants worked for and delivered Amazon packages in the Tulsa, Oklahoma, area for the defendant/appellee, James Kerr. After Kerr fired them, the plaintiffs filed a lawsuit against him. Kerr sought to compel arbitration pursuant to arbitration provisions of the plaintiffs' employment contracts. The plaintiffs objected, arguing that they could not be compelled to arbitrate because federal and state law precluded arbitration. The trial court disagreed, granted the motion to compel arbitration, and stayed the lawsuit until completion of arbitration. The plaintiffs appealed, and the Court of Civil Appeals affirmed. We granted certiorari and hold that: 1) employees who deliver Amazon packages are exempted from arbitration under federal law; and 2) the district court's exclusive jurisdiction over the retaliatory discharge claims precludes arbitration of those claims under Oklahoma law. STAY OF NOVEMBER 20, 2023, LIFTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT REVERSED AND REMANDED FOR FURTHER PROCEEDINGS IN ACCORDANCE WITH THIS OPINION. Caleb Salmon, Tulsa, Oklahoma, for Plaintiffs/Appellants. Justin P. Grose, Oklahoma City, Oklahoma, for Defendants/Appellees. KAUGER, J.: ¶1 We granted certiorari to address the first impression questions of whether: 1) employees who deliver Amazon packages are exempted under federal arbitration law; and 2) Oklahoma law precludes enforcement of the employment arbitration agreements in this cause. We hold that: 1) federal law exempts employees who deliver Amazon packages from arbitration; and 2) the district court's exclusive jurisdiction over retaliatory discharge claims precludes arbitration of those claims under Oklahoma law. .FACTS ¶2 The plaintiff/appellant, Spencer Mathis (Mathis/employee) worked as a local delivery contractor for Amazon, Inc., in the Tulsa area in Creek County, Oklahoma. The plaintiff/appellant, Jaden Fenstermaker (Fenstermaker) supervised Mathis. Their paychecks came from two different LLCs, 5280 Solutions and Dash Logistics. The defendant/appellee, James Kerr (Kerr/employer) apparently ran both companies.1 ¶3 Kerr employed drivers to drive delivery vans to pick up packages from a local warehouse and deliver them to Amazon customers. While delivering packages on March 27, 2021, a large dog bit Mathis on the knee. He subsequently filed a workers' compensation claim, received medical treatment, and was required to take time off work. When he returned to work, Mathis continued to suffer knee pain. Mathis alleges that on May 12, 2021, Kerr promised to give him country routes with fewer stops that require climbing in and out of the truck with packages. ¶4 However, the employee also alleges that, instead, Kerr: 1) told the dispatcher to assign Mathis to the most difficult routes with 190 or more stops per day; and 2) sought to induce the employee to quit and undermine the workers' compensation claim. Kerr also asked Fenstermaker to discourage Mathis from pursing a workers' compensation claim. On May 22, 2021, Mathis asked to be put on the promised country routes because his knee hurt, and it was hard for him to keep up. The employer instructed Fenstermaker to tell Mathis if he did not drop the claim, it would follow him around for the rest of his career and no one would want to hire him. ¶5 A few days later, without warning, Kerr fired Mathis and Fenstermaker. The employees attempted to work for another Amazon contractor, but were denied employment because Kerr told the contractor about the workers' compensation claim. Fenstermaker also alleges that after he was fired, Kerr used Fenstermaker's business credit card for which Fenstermaker was personally liable. Kerr's unauthorized use of the card caused Fenstermaker to incur personal liability for charges he did not make. ¶6 On July 12, 2021, the employees filed a lawsuit against Kerr and his companies in the District Court of Creek County, Oklahoma. Between the two of them, Mathis and Fenstermaker alleged claims which included wrongful workers' compensation retaliation, tortious interference with contract and business relations, identity theft, and deceit. ¶7 On August 30, 2021, Kerr filed a motion to compel arbitration, arguing that both employees' employment contracts contained mandatory arbitration provisions which required arbitration of their claims. On September 20, 2021, the employees responded, arguing that because: 1) federal law exempts transportation workers engaged in interstate commerce from arbitration agreements, Mathis and Fenstermaker were not bound by the arbitration provisions of their employment contracts; and 2) the arbitration agreements were also unenforceable under Oklahoma law because the district court had exclusive jurisdiction over this cause. ¶8 On January 10, 2022, the trial court held a hearing on the motion to compel arbitration. On February 1, 2022, it filed an order granting the motion compelling arbitration of the plaintiffs' claims and staying the cause until the completion of arbitration. The plaintiffs appealed on March 3, 2023, and the Court of Civil Appeals affirmed. We granted certiorari on September 25, 2023, to address the first impression questions. ¶9 However, on September 29, 2023, the United States Supreme Court granted certiorari in the case of Bissonnette v. LePage Bakeries Park St., LLC., 601 U.S. ___, 144 S. Ct. 905 (2024). Bissonette concerned whether local Connecticut delivery drivers of nationwide distributed baked goods were exempted from arbitration under federal law. On October 19, 2023, Amazon.com and Amazon Logistics filed a Petition for Certiorari for in Amazon v. Miller, No. 23-424, ___ S.Ct. ___, (2024 WL 1706098).2 Amazon concerned whether Amazon delivery drivers who make last-leg local deliveries of Amazon goods shipped from other states or countries to consumers were also exempt from arbitration under federal law. ¶10 Because these two cases appeared to be dispositive of the federal law issue in this cause, we issued a stay on November 20, 2023, until the United States Supreme Court resolved both cases. On April 12, 2024, the United States Supreme Court issued an opinion in Bissonnette, and on April 22, 2024, it denied certiorari in Amazon. Consequently, we lift the stay to address the issues presented and to apply the two United States Supreme Court cases to this cause. I. FEDERAL LAW EXEMPTS EMPLOYEES WHO DELIVER AMAZON PACKAGES FROM ARBITRATION. ¶11 The employees argue that their arbitration agreements are unenforceable and invalid because they were workers engaged in interstate commerce and federal law exempts such workers from arbitration. The employer argues that federal law is inapplicable, and Mathis and Fenstermaker are bound by their employment arbitration agreements. A. The Exclusion of Workers Engaged in Interstate Commerce from Arbitration. ¶12 The Federal Arbitration Act (FAA) applies to arbitration agreements in contracts involving commerce.3 It makes arbitration agreements valid, irrevocable, and enforceable, unless there are legal or equitable grounds to revoke them.4 However, it expressly does not apply to contracts of employment of a "class of workers engaged in foreign or interstate commerce."5 ¶13 Prior to June of 2022, federal circuit courts had reached conflicting decisions on what constituted a "class of workers engaged in foreign or interstate commerce" under the FAA.6 One of those courts was the United States Court of Civil Appeals for the 9th Circuit. In Rittman v. Amazon.com Inc., 971 F.3d 904 (9th Cir. 2020) cert. denied, Amazon.com, Inc., v. Rittman, 141 S. Ct. 1374 (2021), the plaintiffs contracted with Amazon Logistics, Inc., to provide delivery services for AmFlex. ¶14 Amazon Logistics, Inc., is a subsidiary of Amazon.com, Inc., an online retailer that sells its own products, and provides fulfillment services for third-party sellers who also sell their products on Amazon.com. In the AmFlex program, Amazon contracted with individuals to make "last mile" deliveries of products from Amazon warehouses to the products' destinations using the AmFlex smart phone application. ¶15 AmFlex participants used a personal vehicle, bicycle, or public transportation, to deliver products ordered through the Amazon website or mobile applications. They picked up assigned packages from a local Amazon warehouse and drove an assigned route to deliver the packages. AmFlex delivery providers occasionally crossed state lines to make deliveries, but most of their deliveries took place intrastate. At the end of each shift, the delivery providers returned undelivered packages to Amazon warehouses. The 9th Circuit held that Amazon Flex delivery drivers were precluded from arbitration because they were engaged in interstate commerce. ¶16 In Carmona v. Domino's Pizza LLC., 21 F.4th 627 (9th Cir. 2021), cert. granted, Domino's Pizza, LLC., v. Carmona, 143 S. Ct. 361, 214 L. Ed. 2d 167 (2022) the 9th Circuit Court also determined that three delivery drivers were within the class of workers engaged in interstate commerce, and therefore exempt from arbitration under the FAA. In Carmona, suppliers from outside the state supplied the ingredients for making pizzas and delivered them to a Domino's Supply Center. At the Supply Center, Domino's employees packaged and prepared the ingredients to be sent to franchisees. Domino's drivers then delivered the goods from the Supply Center to franchisees. ¶17 The delivery drivers sued Domino's, alleging violations of state labor laws. The 9th Circuit Court affirmed the trial court's denial of a motion to compel arbitration pursuant to the drivers' employment contracts. The United States Supreme Court granted certiorari in Carmona, vacated the opinion, and remanded it back to the 9th Circuit for further consideration and application of Southwest Airlines Co., v. Saxon, 596 U.S. 450, 142 S. Ct. 1783, 213 L. Ed. 2d 27 (2022).7 ¶18 Saxon was a June 6, 2022, decision of the United States Supreme Court. Latrice Saxon, an airline ramp supervisor for Southwest Airlines, filed a putative class action against the airlines for failure to pay proper overtime wages. Southwest sought to dismiss the lawsuit because Saxon's employment contract required arbitration of wage disputes individually. Saxon claimed she was exempt from arbitration based on the FAA exclusion of a "class of workers engaged in foreign or interstate commerce." ¶19 Southwest employed ramp agents to physically load and unload baggage, airmail and freight. It employed ramp supervisors such as Saxon to train and supervise teams of ramp agents. It was undisputed that ramp supervisors also stepped in frequently to load and unload cargo alongside ramp agents. The Court addressed whether Saxon was within the exempted class and if so, how to make such a determination. ¶20 First, the Court determined how to define the relevant "class of workers." The Court recognized that the term "workers" refers to the actual work that members of the class, as a whole, typically carry out. It said that "Saxon is therefore a member of a 'class of workers' based on what she does at Southwest, not what Southwest does generally."8 Because Southwest did not dispute that Saxon frequently loaded and unloaded cargo, the Court concluded that she belonged to a class of workers who physically load and unload cargo on and off airplanes on a frequent basis. ¶21 The next question was whether Saxon's class was "engaged in foreign or interstate commerce." In this regard, the Court said that: 1) the "loading or unloading of an interstate shipment by the employees of a carrier is so closely related to interstate transportation as to be practically part of it;" and 2) "airline employees who physically load and unload planes traveling in interstate commerce are, as a practical matter, part of the interstate transportation of goods." Consequently, the Court held that Saxon's class was a "class of workers engaged in foreign or interstate commerce." ¶22 The Court further noted that cargo loaders were intimately involved with commerce (e.g. transportation) of cargo which is bound for interstate transit. It said: [T]here could be no doubt that [interstate] transportation [is] still in progress, and that a worker is engaged in that transportation, when she is 'doing the work of unloading' or loading cargo from a vehicle carrying goods in interstate transit.9 After Saxon, the 9th Circuit Court of Appeals, reconsidering Carmona, supra, found no inconsistency with Saxon. Consequently, the 9th Circuit Court of Appeals reached the same conclusion it did the first time -- that the FAA excluded the delivery drivers from arbitration. The United States Supreme Court denied certiorari on April 22, 2024.10 B. Amazon delivery drivers fall within the arbitration exemption of the FAA. ¶23 Bissonnette v. LePage Bakeries Park St., LLC., 601 U.S. ___, 144 S. Ct. 905 (2024), involved Flower Foods, a company who produces and markets baked goods that are distributed nationwide. Flower Foods baked the goods and sent them to a Connecticut warehouse. The plaintiffs were franchisees who owned the rights to distribute the baked goods in certain parts of Connecticut. The plaintiffs picked up baked goods and distributed them to local shops. The plaintiffs also found new retail outlets, advertised, set up promotional displays, and maintained their customers' inventories by stocking shelves and replacing expired products. ¶24 After the plaintiffs sued Flower Foods and two of its subsidiaries for violating state and federal wage laws, Flower Foods sought to compel arbitration pursuant to employment arbitration agreements. The 2nd Circuit Court of Appeals held that the FAA was inapplicable because the plaintiffs were in the baking industry, and not the transportation industry. The plaintiffs sought review by the United States Supreme Court. The United States Supreme Court held a worker need not be in the transportation industry to fall within the FAA exemption to arbitration, but that any exempt worker must at least play a direct and necessary role in the free flow of goods across borders. It also expressly noted that it was not deciding whether the petitioners were transportation workers or that petitioners were not "engaged in foreign or interstate commerce" within the meaning of § 1 because they deliver baked goods only in Connecticut. ¶25 In a strikingly similar cause to this one, the 9th Circuit Court of Appeals in Miller v. Amazon.com, Inc., No. 21-36048, 2023 WL 5665771, cert. denied, Amazon.com, Inc., v. Miller, No. 23-424, ___ S.Ct. ___, (2024 WL 1706098) determined that Amazon delivery drivers fall within the arbitration exemption of the FAA. In Miller, the plaintiffs worked as Amazon Flex delivery drivers making last-leg deliveries of Amazon good shipped from other states or countries to consumers, as well as deliveries of food, groceries and packages stored locally that may be eligible for tips. The delivery drivers sued Amazon for failing to honor a promise that workers would receive 100% of the tips that customers added for tip-eligible deliveries, in violation of Washington state law. ¶26 The 9th Circuit Court of Appeals held that the drivers were exempt from arbitration under the FAA, noting that the drivers have only one contract of employment which governs all of their work, including shifts for both last-mile deliveries as well as shifts for local tip-producing deliveries. The United States Supreme Court denied certiorari on April 22, 2024, leaving the 9th Circuit opinion intact. ¶27 Here, given the facts and holdings of the current decisions of the United States Supreme Court and 9th Circuit Court of Appeals involving employees like the ones involved in this cause, we can only reach one conclusion -- employees who deliver Amazon packages are exempt from arbitration under federal law. In our view, whether the employees actually cross a state line may be a relevant factor, but it is not dispositive of this cause because Amazon delivery drivers engage in interstate commerce nearly every time they deliver goods shipped from other states or countries to consumers according to the 9th Circuit's rationale. The employer's answer to the petition for certiorari acknowledges that both employees delivered packages. Consequently, they are both included within the excluded class of workers. II. THE DISTRICT COURT'S EXCLUSIVE JURISDICTION OVER RETALIATORY DISCHARGE CLAIMS PRECLUDES ARBITRATION OF SUCH CLAIMS. ¶28 Aside from the applicability of the FAA, neither party argues that federal law exclusions preempt state arbitration agreements,11 or that the entire agreement was not validly entered into, is ambiguous, or invalid under other contract law principles. The agreement expressly provides that in the event the FAA is found inapplicable, state law shall govern.12 The employer argues even if the arbitration is not required under federal law (ie., the FAA exemption applies to the employees to exempt them from arbitration), they can still be compelled to arbitrate pursuant to the arbitration agreement and Oklahoma law. The employees disagree, arguing that because Oklahoma law provides the exclusive remedy in the district courts, arbitration is precluded. A. The history of district courts' exclusive remedy. ¶29 Between the two employees, their claims include wrongful workers compensation retaliation, tortious interference with contract and business relations, identity theft, and deceit. In Thompson v. Bar-S Foods Co., 2007 OK 75, ¶¶11-14, 174 P.3d 567, this Court discussed an employee's wrongful termination because she filed a workers' compensation claim. The cause concerned whether the employee was required to pursue her claim through arbitration because she signed an arbitration agreement. Additionally, the employee argued that because retaliatory discharge actions relating to workers' compensation claims are to be resolved in the district courts, she should not have to submit to arbitration. ¶30 The statute in effect at the time was 85 O.S. 2001 §7. It provided: Except as otherwise provided by law, the district courts of the state shall have jurisdiction, for cause shown to restrain violations of this act. Bar-S argued that the language in the statute did not show any legislative intent to create exclusive jurisdiction in the district courts of Oklahoma. In other words, the statutory language did not preclude arbitration of retaliatory discharge issues. Indeed, nowhere in the statute was the word "exclusive." This Court did not settle Bar-S' argument because the arbitration agreement provided for unilateral change by the employer. Accordingly, we determined it to be unenforceable. Nevertheless, the Legislature began overhauling the workers compensation regime four years after Thompson and repealed the statute. ¶31 In 2013, the Legislature enacted the Administrative Workers' Compensation Act,13 (the Act) to govern workers compensation claims. The new 85A O.S. Supp. 2013 §7 (which became effective February 1, 2014), required retaliatory discharge claims to be heard by a Workers Compensation Commission and the Legislature added the terms "exclusive" to jurisdiction and to the remedies provided.14 ¶32 In 2019, the Legislature again amended the statute to provide exclusive jurisdiction in the district courts of Oklahoma. The statute has not been amended since 2019, and 85A O.S. 2021 §7 currently provides in pertinent part: A. An employer may not retaliate against an employee when the employee has in good faith: 1. Filed a claim under this act; 2. Retained a lawyer for representation regarding a claim under this act; 3. Instituted or caused to be instituted any proceeding under the provisions of this act; or 4. Testified or is about to testify in any proceeding under the provisions of this act. B. The district courts shall have exclusive jurisdiction to hear and decide claims based on this section. . . . H. The remedies provided for in this section shall be exclusive with respect to any claim arising out of the conduct described in subsection A of this section. (Emphasis supplied.) The Act provides, with a few exceptions, exclusive remedies to all employees -- exclusive to all other rights and remedies.15 Furthermore, the Act requires courts to strictly construe its provisions.16 ¶33 Because of the legislative changes, the district court's exclusive jurisdiction, and the legislative strictures of strict construction, it appears that §7 shows legislative intent to guarantee both employers and employees entitlement to settle wrongful retaliation disputes such as this in the district courts of Oklahoma and no other forum. Thus, arbitration of such a claim is statutorily prohibited. Nevertheless, even if the changes were not such a clear indication of the Legislature's intent, the changes, coupled with the application of the rationale of Bruner v. Timberlane Manor Ltd. Partnership, 2006 OK 90, ¶¶24-25, 155 P.3d 16 , as discussed below, lead us to the same conclusion. B. The Directives of the Workers' Compensation Act Prevail Over the Uniform Arbitration Act. ¶34 Oklahoma's Uniform Arbitration Act, 12 O.S. 2021 §§1851-1881 applies to all agreements to arbitrate.17 Generally, Oklahoma's public policy favors arbitration agreements.18 However this partiality is not unyielding. In Bruner v. Timberlane Manor Ltd. Partnership, 2006 OK 90, ¶¶24-25, 155 P.3d 16 , this Court addressed the enforceability of an arbitration agreement between a nursing home resident and the nursing home. The Court unanimously held that because the Nursing Home Care Act, 63 O.S. 2001 §1-193919 voided any waiver of the right to commence an intentional or negligent action against a nursing home owner or licensee, the arbitration agreement at issue was unenforceable. ¶35 The rationale for determining that the arbitration agreement was unenforceable was that the specific statute in the Nursing Home Care Act controlled over the general Oklahoma Uniform Arbitration Act. The employer argues that Bruner is distinguishable because the Nursing Home Act guaranteed a jury trial. However, this argument is unconvincing because, while 85A O.S. 2021 §7 may not expressly guarantee a jury trial, it does guarantee the district court as the specific forum for both employers and employees to resolve retaliatory discharge claims. Accordingly, we remand the cause to the district court for proceedings consistent with this opinion including the determination of facts or theories existing under law or equity which would disfavor or prohibit arbitration of any of the plaintiffs' remaining claims. CONCLUSION ¶36 Because of the recent decisions of the United States Supreme Court and the 9th Circuit Court of Appeals, involving delivery drivers of Amazon goods, we hold they are exempt from federal arbitration law. Furthermore, to the extent the Oklahoma Legislature has required workers' retaliation claims to be exclusively resolved in the district courts, state law precludes arbitration of those disputes. Nevertheless, fact questions remain regarding whether the other claims alleged by the plaintiffs should be arbitrated. STAY OF NOVEMBER 20, 2023, LIFTED; COURT OF CIVIL APPEALS OPINION VACATED; TRIAL COURT REVERSED AND REMANDED FOR FURTHER PROCEEDINGS IN ACCORDANCE WITH THIS OPINION. ROWE, V.C.J., KAUGER, WINCHESTER, EDMONDSON, COMBS, GURICH, DARBY, JJ., concur. KANE, C.J., dissents. KUEHN, J., concurs in part, dissents in part (by separate writing.) FOOT