Fighting Back Against Mandatory Arbitration and Class Action Waivers: What Delivery Drivers in New Jersey Need to Know

If you work as a delivery driver for a platform like Uber Eats, DoorDash, or Grubhub, you likely agreed to a mandatory arbitration clause and class action waiver when you signed up. These provisions, most likely buried in lengthy terms of service, are designed to prevent workers from banding together to challenge wage theft, tip misappropriation, and misclassification. New Jersey law provides some of the strongest worker protections in the country for challenging arbitration clauses and class action waivers, and recent decisions have significantly shifted the legal landscape in favor of drivers.

Arbitration

Mandatory arbitration clauses require that any dispute be resolved through private arbitration rather than a court of law, meaning no judge, no jury, and no public record. Class action waivers require each worker to pursue claims individually, preventing drivers from joining together even when thousands were harmed by the same practice. Together, these provisions neutralize most individual claims. A driver underpaid by a few hundred dollars has little incentive to pursue individual arbitration.

New Jersey’s Supreme Court erected one of the strongest barriers to enforcing arbitration clauses in the country. In Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), the New Jersey Supreme Court held that an arbitration agreement is enforceable only if it clearly and unambiguously informs the party that they are waiving their right to pursue claims in court and to a trial by jury. The Court recognized that an average person may not know, without explanation, that arbitration replaces a court of law. New Jersey appellate courts have repeatedly struck down arbitration clauses that lacked explicit jury-trial waiver language.

Importantly, choice-of-law provisions will not save a platform that tries to designate another state’s law to sidestep Atalese. If drivers live and work in New Jersey, courts will apply New Jersey law regardless of the contract language.

Aguirre v. CDL Last Mile Solutions, LLC

In Aguirre v. CDL Last Mile Solutions, LLC, No. A-3346-22 (N.J. App. Div. Feb. 26, 2024), a group of Bergen County last-mile delivery drivers filed a class action challenging their classification as “independent contractors.” The company moved to compel arbitration and invoked a New York choice-of-law clause to try to escape Atalese. The Appellate Division refused to enforce the arbitration agreement on two independent grounds:

• New Jersey law applied because the drivers lived and worked in New Jersey, and applying New York law would be “contrary to a fundamental policy of New Jersey” protecting workers’ right to a knowing and voluntary jury-trial waiver.
• The driver agreements failed the Atalese standard because they did not clearly state that signing meant waiving the right to sue in court.

Class Action Waivers

A class action waiver is a provision that says you can’t bring a claim “on behalf of” other drivers or participate in a class or collective action, even if the company used the same pay practice, tip policy, or classification scheme across the entire workforce. For delivery drivers, that matters because the economics of bringing an individual claim often don’t make sense. An individual driver might only be shorted a few hundred or a few thousand dollars, and many people won’t risk the time and expense of pursuing a case alone.

New Jersey courts have recognized this reality. In Aguirre, the Appellate Division not only refused to enforce an arbitration agreement but also rejected reliance on the class-action waiver for New Jersey wage-law claims, reinforcing that companies cannot automatically use one-size-fits-all waivers to shut down group litigation where New Jersey’s worker-protection policies apply.

Key Questions to Ask Before Assuming You’re Barred

If you are considering a claim, do not assume a class action waiver ends your rights to litigation. There are some key questions to ask:

• Did the company provide clear, conspicuous notice that you were giving up the right to bring or participate in a class, collective, or representative action?
• Was the waiver presented in a way that allowed meaningful assent, as opposed to being hidden in links or rolled out through “updated terms”?
• Does the waiver attempt to block the kind of group proceeding New Jersey law permits for the claims at issue?

The bottom line is that a class action waiver is not a reason to walk away from a wage claim. Before deciding that you are “stuck” with individual arbitration or barred from participating in group litigation, have the provision reviewed in light of New Jersey’s wage laws, public policy considerations, and cases like Aguirre. A careful analysis often reveals that the waiver is narrower than it appears, poorly drafted, or unenforceable.

Talk to an Employment Attorney

At Stark & Stark, our Employment Group represents New Jersey workers in challenges to unlawful arbitration agreements and class action waivers. If you are a New Jersey employee who believes you have a claim for unpaid wages, theft of tips, overtime, discrimination, or whistleblowing, contact our Employment Law Group to discuss your situation.