Ali v. Daylight Transport, LLCAnnotate this Case
Daylight, an expedited less-than-truckload carrier, contracts with independent truck drivers. Daylight’s California drivers only provided services within California. The plaintiffs each entered into an “Independent Contractor Service Agreement” before beginning to drive for Daylight and regularly signed materially identical contract extensions while driving for Daylight. All of those Agreements contained an identical arbitration provision. The plaintiffs filed a putative class action, requesting relief from Daylight’s “unlawful misclassification of former and current Daylight delivery drivers as ‘Independent Contractors,’ ” and alleging violations of Labor Code and wage order provisions, and the law against unfair competition.
The court of appeal affirmed the denial of Daylight’s motion to compel arbitration, applying California law and finding the agreement procedurally and substantively unconscionable, and that severance of the unconscionable terms is not possible. Daylight was in a superior bargaining position and presented the contracts on a take it or leave it basis. The Agreement’s 120-day limitations period is substantially shorter than the statutory limits. The Agreement permits Daylight to seek a provisional judicial remedy but precludes plaintiffs from equivalent access and requires that the parties split the cost of arbitration, a cost greater than litigation filing fees. Because Daylight had waived its argument, the court did not address preemption under the Federal Arbitration Act, which“provides a limited exemption from FAA coverage to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce (9 U.S.C. 1).