Former Shipt driver must arbitrate before PAGA claims can be heard

A San Francisco judge on Tuesday paused a Private Attorneys General Act lawsuit against grocery delivery company Shipt Inc. after learning the plaintiff's identical lawsuit in federal court had been sent to arbitration in June.

Shipt is a subsidiary of Target Corp. following its $550 million acquisition in 2017.

Superior Court Judge Ethan Schulman stayed the case but said the plaintiff's attorneys were welcome to return to court once the federal arbitration is resolved. Plaintiff's attorneys disagreed with the decision and floated the idea that their client may attempt to avoid arbitration.

The complaint accuses the company of misclassifying its drivers as independent contractors and violating numerous state laws through its employment practices. It claims that Shipt held an illegal special election without properly notifying employees in order to shoot down a proposal to implement "alternative" scheduling that would make employees shifts consistently fall on the same days of the week. Boson v. Shipt, CGC24615244 (S.F. Super. Ct. filed June 5, 2024).

The lead plaintiff, a former Shipt delivery driver who claims he was fired in April 2023 without cause, filed his first PAGA representative complaint on Feb. 29 in San Francisco County but refiled in June after Shipt successfully removed the first case to federal court in Oakland.

In both the state and federal litigation, Shipt's attorneys argued that the plaintiff cannot pursue relief under PAGA purely as a representative for the proposed class and that his misclassification claim must be arbitrated under the independent contractor agreement he signed.

U.S. District Judge Maxine M. Chesney agreed with this logic in her June 28 grant of Shipt's motion to compel arbitration.

Schulman detailed his reasoning for the stay during an exchange in court with one of the plaintiff's attorneys, Henry G. Glitz of Bibiyan Law Group PC.

"Isn't the court's role here to defer to an arbitrator appropriately and to defer to an arbitrator if there may be an overlap, and you've acknowledged there are overlapping claims here?" Schulman asked. "Once the arbitration is complete, one way or the other, you know, the parties are free to come back to me and ask for the stay to be lifted."

Glitz responded by proposing an alternative to a stay to the case, citing his client's uncertainness about proceeding in the federal action.

"I don't think a stay pending arbitration would necessarily make sense at this time, because, as I mentioned, we're still considering our options," Glitz said. "Plaintiff may not seek ruling in arbitration on his individual claims at all. So, I don't know if a stay pending arbitration necessarily makes sense. Perhaps, I don't know, a continuance or a limited stay? But I think a stay pending arbitration is a little bit premature at this point."

One of Shipt's attorneys, Chrisopher A. Crosman of Seyfarth Shaw LLP, sided with Schulman in court on Tuesday when asked to respond to Glitz's request.

"I completely agree with your honor that since the initial case has been sent to arbitration, it makes sense for [plaintiff] to adjudicate his individual claims before the arbitrator," Crosman said. "If he proves that he has standing to be a representative in a PAGA representative action, that he can come back to this court and resume this case that would present the most efficient path forward for all the parties involved."

Glitz and his co-counsel could not be reached for comment Tuesday. Those attorneys are David D. Bibiyan and Jeffrey D. Klein of Bibiyan Law Group PC; Todd M. Friedman and Adrian R. Bacon of Law Offices of Todd M. Friedman PC.

The following attorneys serve as Crosman's co-counsel in the case: Camille A. Olson, Richard B. Lapp and Candace Bertoldi of Seyfarth Shaw LLP.

The plaintiff's attorneys included several allegations in the latest state court complaint that are not typically found in PAGA lawsuits, including a claim that Shipt requires independent contractors to sign away their rights to discuss employment law violations by the company, failure to provide bathrooms to its drivers, and a claim of unlawful background checks.

Shipt's attorneys have routinely denied the claims throughout both the state and federal litigation.