Wickberg v. Lyft, Inc.

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

CIVIL ACTION NO. 18-12094-RGS

ERIC WICKBERG, on behalf of himself

and all others similarly situated

v.

LYFT, INC.

MEMORANDUM AND ORDER ON

DEFENDANT’S MOTION TO COMPEL ARBITRATION

December 19, 2018

STEARNS, D.J.

Eric Wickberg is the plaintiff in this putative class action brought

against Lyft, Inc. The Complaint alleges that Lyft misclassified him and other

potential class members as independent contractors, rather than employees,

and avoided paying them the minimum wage and overtime. Lyft now moves

to stay the action and compel arbitration or, in the alternative, to strike the

class allegations. For the reasons to be explained, Lyft’s motion to compel

arbitration will be allowed.

BACKGROUND

Lyft is a ridesharing platform that uses a smartphone application to

connect riders with available drivers for a fee. Wickberg is a Massachusetts

resident who has driven for Lyft since September of 2017. When he enrolled

online as a driver with Lyft on January 28, 2017, Wickberg clicked a checkbox

that stated, “I agree to Lyft’s [September 30, 2016] terms of services.”

Lauzier Decl. (Dkt # 16) {{] 10-12.1 As shown in the image below, the words

“Lyft’s terms of services” were highlighted in pink and hyperlinked to the

written terms. Id. { 12.

Apply Now

Id. 411.

1 The court may consider the materials relating to “Lyft’s arbitration

clause,” Compl. {| 4, because they are referenced in and are central to the

Complaint. See Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007) (noting

that a court “may consider ‘documents the authenticity of which are not

disputed by the parties,” as well as “documents central to the plaintiff[’s]

claim,” and “‘documents sufficiently referred to in the complaint”), quoting

Watterson v. Page, 987 F.2d 1, 3 (ist Cir. 1993).

Among other provisions, the terms provided in capital letters that

drivers must “SUBMIT CLAIMS . . . AGAINST LYFT TO BINDING AND

FINAL ARBITRATION ON AN INDIVIDUAL BASIS, NOT AS A PLAINTIFF

OR CLASS MEMBER IN ANY CLASS, GROUP OR REPRESENTATIVE

ACTION OR PROCEEDING.” Id. ¶ 16. On May 3, 2018, Wickberg reaffirmed

acceptance of a nearly identical arbitration provision posted by Lyft on

February 6, 2018. However, on May 20, 2018, Wickberg wrote to Lyft’s

General Counsel stating that he “would like to opt out of arbitration with

respect to claims that are not part of a pending settlement action.” Lieu Decl.

(Dkt # 18), Ex. C.

DISCUSSION

A party seeking to compel arbitration pursuant to the Federal

Arbitration Act (FAA) must show “‘(1) that a valid agreement to arbitrate

exists, (2) that the movant is entitled to invoke the arbitration clause, (3) that

the other party is bound by that clause, and (4) that the claim asserted comes

within the clause’s scope.’” Ouadani v. TF Final Mile LLC, 876 F.3d 31, 36

(1st Cir. 2017), quoting InterGen N.V. v. Grina, 344 F.3d 134, 142 (1st Cir.

2003). “‘[E]xcept where the parties clearly and unmistakably provide

otherwise, it is the court’s duty to interpret the agreement and to determine

whether the parties intended to arbitrate grievances concerning a particular

matter.’” Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 375

(1st Cir. 2011), quoting Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S.

287, 301 (2010) (citations omitted in Dialysis). “‘When deciding whether the

parties agreed to arbitrate a certain matter (including arbitrability), courts

generally . . . should apply ordinary state-law principles that govern the

formation of contracts.’” Cullinane v. Uber Techs., Inc., 893 F.3d 53, 61 (1st

Cir. 2018), quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944

(1995). Under Massachusetts law, courts “have held that . . . clauses [in

online contracts] will be enforced provided they have been reasonably

communicated and accepted and if, considering all the circumstances, it is

reasonable to enforce the provision at issue.” Ajemian v. Yahoo!, Inc., 83

Mass. App. Ct. 565, 573 (2013), aff’d, 478 Mass. 169 (2017).

Reasonable Notice

Wickberg argues that the agreement to arbitrate is invalid because the

September 30, 2016 terms were not reasonably communicated for several

reasons. First, the terms appear “three-quarters of the way down” on a

screen that offers “no contextual clue” that the driver is entering into a

binding contract with Lyft. Opp’n (Dkt # 19) at 6. Second, the placement of

the terms could be read to suggest that they referred to the driver’s personal

information or the use of the promo or referral codes. Third, the terms were

“buried amidst a multi-screen sign-up process.” Id. at 8. Fourth, the terms

are “the smallest font on the page and . . . visually dwarfed by other more

prominent text.” Id. at 9. And finally, the hyperlinked text “is not italicized,

bolded, underlined, or in classic blue coloring to indicate that it is a

hyperlink.” Id. As a result, most drivers, according to Wickberg, “would not

think they were agreeing to a binding employment contract; they would not

realize that they could click on the hyperlink to view the contract’s terms, nor

would they have reason to know that there was an arbitration provision in

Lyft’s contract.” Id. at 10.

Wickberg primarily relies on Cullinane v. Uber Techs., Inc.2 In

Cullinane, the First Circuit, applying Massachusetts law, invalidated an Uber

arbitration agreement because it did not reasonably notify Uber’s riders of

2 Wickberg also notes that two other courts have held that Lyft’s

agreement was not reasonably communicated, even though the plaintiffs in

those cases had affirmatively checked their acceptance of the hyperlinked

terms. In Applebaum v. Lyft, Inc., a court in the Southern District of New

York invalidated an online Lyft agreement because “the text is difficult to

read: ‘I agree to Lyft’s Terms of Service’ is in the smallest font on the screen,

dwarfed by the jumbo-sized pink ‘Next’ bar at the bottom of the screen and

the bold header ‘Add Phone Number’ at the top.” 263 F. Supp. 3d 454, 466

(S.D.N.Y. 2017) (emphasis omitted). Similarly, in Talbot v. Lyft, Inc., a

California state court invalidated a Lyft agreement identical to the one at

issue here because “nothing supports the conclusion that (i) the pink words

‘Terms of service’ were a hyperlink or that (ii) they linked to the contract that

governed the working relationship between Lyft and drivers.” No. 18-

566392, at 8 (Cal. Sup. Ct. Oct. 19, 2018). I find these cases unpersuasive, as

they apply New York and California law, and not the law of Massachusetts.

its terms. 893 F.3d at 64. The Court determined that the layout and design

of Uber’s registration screen rendered the hyperlinked “Terms of Service &

Privacy Policy” insufficiently conspicuous. Id. at 63-64 (“Even though the

hyperlink did possess some of the characteristics that make a term

conspicuous, the presence of other terms on the same screen with a similar

or larger size, typeface, and with more noticeable attributes diminished the

hyperlink’s capability to grab the user’s attention.”).

However, as Lyft points out, Uber’s agreement in Cullinane is notably

different from Lyft’s. The First Circuit explained in Cullinane that:

Uber chose not to use a common method of conspicuously

informing users of the existence and location of terms and

conditions: requiring users to click a box stating that they agree to

a set of terms, often provided by hyperlink, before continuing to

the next screen. Instead, Uber chose to rely on simply displaying

a notice of deemed acquiescence and a link to the terms.

Id. at 62. By contrast, Lyft’s display of the arbitration agreement conforms

to what the First Circuit held would be a conspicuous and enforceable

agreement. These online agreements – where a user selects “I agree”

without necessarily reviewing the contract – are typically called “clickwrap”

agreements, and are generally held enforceable.3 See Bekele v. Lyft, Inc., 199

3 There are four general categories of online contracts:

Browsewrap exists where the online host dictates that assent is

given merely by using the site. Clickwrap refers to the assent

F. Supp. 3d 284, 295-296 (D. Mass. 2016) (“Massachusetts courts have

routinely concluded that clickwrap agreements – whether they contain

arbitration provisions or other contractual terms – provide users with

reasonable communication of an agreement’s terms.”); Ajemian, 83 Mass.

App. Ct. at 576 (“[F]orum selection clauses have almost uniformly been

enforced in clickwrap agreements.”); Small Justice LLC v. Xcentric Ventures

LLC, 99 F. Supp. 3d 190, 196 (D. Mass. 2015), aff’d, 873 F.3d 313 (1st Cir.

2017) (“Clickwrap agreements are generally upheld because they require

affirmative action on the part of the user.”).4 Unlike Uber’s screen, Lyft’s

screen required Wickberg to click a box stating that he “agree[d] to Lyft’s

process by which a user must click “I agree,” but not necessarily

view the contract to which she is assenting. Scrollwrap requires

users to physically scroll through an internet agreement and click

on a separate “I agree” button in order to assent to the terms and

conditions of the host website. Sign-in-wrap couples assent to the

terms of a website with signing up for use of the site’s services . . . .

Cullinane, 893 F.3d at 61 n.10, quoting Berkson v. Gogo LLC, 97 F. Supp. 3d

359, 394-395 (E.D.N.Y. 2015). But “the existence of an arbitration

agreement is not affected by how [I] categorize the online contract at issue

here.” Id.

4 Lyft argues that a District of Massachusetts court, in Bekele, “enforced

an arbitration agreement with nearly identical terms.” Mem. (Dkt # 15) at 1.

Bekele is somewhat inapposite because it involved a “scrollwrap” agreement,

where a user must scroll through an entire agreement before assenting to it,

not a clickwrap agreement like the one at issue here. 199 F. Supp. 3d at 289.

It is true, however, that the arbitration agreements themselves here and in

Bekele parallel one another.

terms of services” before he could continue with the registration process.

And although, as Wickberg asserts, “Lyft’s terms of service” appeared

towards the bottom in a smaller font and without a typical blue-colored

hyperlink, the phrase was pink and distinguishable on the screen. See

Cullinane, 893 F.3d at 62 (“Several nonexhaustive examples of general

characteristics that make a term conspicuous include using larger and

contrasting font, the use of headings in capitals, or somehow setting off the

term from the surrounding text by the use of symbols or other marks.”).5

Acceptance

Wickberg further argues that there is no valid agreement to arbitrate

because he “did not unambiguously manifest assent” to the September 30,

2016 terms. Opp’n (Dkt # 19) at 6 n.5 (emphasis omitted). But as discussed

above, Wickberg affirmatively adopted those terms by clicking “I agree.” He

further agreed “TO WAIVE [HIS] RESPECTIVE RIGHTS TO RESOLUTION

5 Wickberg also challenges the arbitration agreement on grounds that

he does not remember, nor is there is any evidence of him, clicking the

hyperlink to view the terms of service. However, the relevant inquiry is not

whether he actually viewed the terms but whether they were reasonably

communicated to him. See Cullinane, 893 F.3d at 62 (“[W]hen the terms of

the agreement are only available by following a link, the court must examine

‘the language that was used to notify users that the terms of their

arrangement with [the service provider] could be found by following the link,

how prominently displayed the link was, and any other information that

would bear on the reasonableness of communicating [the terms].’”), quoting

Ajemian, 83 Mass. App. Ct. at 575.

OF DISPUTES IN A COURT OF LAW BY A JUDGE OR JURY” and to resolve

“ALL DISPUTES AND CLAIMS . . . BY BINDING ARBITRATION SOLELY

BETWEEN [HIM] AND LYFT.” Lauzier Decl. (Dkt # 16) ¶ 16.

In short, Wickberg entered into a valid arbitration agreement with Lyft

by affirmatively assenting to reasonably communicated terms. See Ajemian,

83 Mass. App. Ct. at 576 (“Although forum selection clauses contained in

online contracts have been enforced, courts have done so only where the

record established that the terms of the agreement were displayed, at least in

part, on the user’s computer screen and the user was required to signify his

or her assent by ‘clicking’ ‘I accept.’”). Wickberg’s allegations of

misclassification and wage violations clearly fall within the terms of the

arbitration agreement, which covers “all disputes and claims” between him

and Lyft. See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460

U.S. 1, 24-25 (1983) (“The [FAA] establishes that, as a matter of federal law,

any doubts concerning the scope of arbitrable issues should be resolved in

favor of arbitration . . . .”). It is, therefore, “reasonable to enforce” the

arbitration agreement. Ajemian, 83 Mass. App. Ct. at 573.

Opt-Out

Wickberg also maintains that he opted out of the arbitration agreement

because of his May 20, 2018 letter to Lyft’s General Counsel, which stated

that he “would like to opt out of arbitration with respect to claims that are

not part of a pending settlement action.” Lieu Decl. (Dkt # 18), Ex. C.

However, Wickberg did not effectively opt out of the September 30, 2016

terms because he did not so notify Lyft in writing within the required 30 days

of his acceptance of that agreement. Id. ¶ 4. Instead, with his letter, he opted

only out of the February 6, 2018 terms, which provided in relevant part:

As a Driver or Driver applicant, you may opt out of the

requirement to arbitrate Driver Claims . . . pursuant to the terms

of this subsection if you have not previously agreed to an

arbitration provision in Lyft’s Terms of Service where you had

the opportunity to opt out of the requirement to arbitrate. If you

have previously agreed to such an arbitration provision, you

may opt out of any revisions to your prior arbitration

agreement made by this provision in the manner specified

below, but opting out of this arbitration provision has no effect

on any previous, other, or future arbitration agreements that

you may have with Lyft.

Id. ¶ 5 (emphasis added). In other words, his opt-out was effective only as to

revisions to the September 30, 2016 arbitration provision, which are

immaterial here.6 Wickberg takes issue with this reading because it means,

in his view, that Lyft “could constantly send drivers a barrage of new

6 Lyft also argues that Wickberg’s filing of an arbitration demand

against Lyft at the American Arbitration Association, on May 31, 2018,

“demonstrates that he and his attorney understood that he remained bound

to individual arbitration.” Mem. (Dkt # 15) at 15. Wickberg asserts that he

mistakenly filed that demand. Opp’n (Dkt # 19) at 12-13. The court need not

reach this issue.

agreements and they would be deemed to have accepted arbitration if they

fail to opt out even once, despite their unequivocal indication that they do

not want to have to arbitrate any disputes with the company.” Opp’n (Dkt

# 19) at 4 n.2 (emphasis in original). But since Wickberg does not provide a

legal basis to challenge that reading, he remains bound by the September 30,

2016 arbitration agreement.7 See Suffolk Const. Co. v. Lanco Scaffolding

Co., 47 Mass. App. Ct. 726, 729 (1999) (“[T]he court must construe all words

that are plain and free from ambiguity according to their usual and ordinary

sense.”); Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 533 (2012)

(“[The FAA] ‘reflects an emphatic federal policy in favor of arbitral dispute

resolution.’”) (citation omitted).

ORDER

For the foregoing reasons, Lyft’s motion to compel arbitration is

ALLOWED. The Clerk will stay the case pending arbitration.

SO ORDERED.

/s/ Richard G. Stearns _____

UNITED STATES DISTRICT JUDGE

7 Having so concluded, the court need not address Lyft’s alternate

motion to strike the class allegations.