Worker arbitration agreements not enforceable against the government

One of the benefits of compelling worker claims to arbitration is the privacy it affords the parties, especially to hiring entities, as well as more efficiency. In regard to public policy, both state and federal law are strongly in favor of enforcing arbitration agreements. That isn’t without its limits, however.

When a government agency files a law enforcement action seeking civil penalties and damages based on a company’s treatment of its workers, a court won’t enforce an arbitration agreement against the agency. Not only is the government agency not a party to the agreement, but the real party in interest isn’t the individual worker, despite the fact she may benefit individually from the action.

In the court’s view, the real party in interest is the public. Therefore, because the claims seek to vindicate public (as opposed to private) interests, such claims can’t be compelled to private arbitration.

The real parties in interest

Maplebear, Inc., dba Instacart, is a California-based company that provides same-day, on-demand grocery shopping, both through its website and a smartphone app. Customers are connected with Instacart’s “Shoppers,” who pick out the requested items for pick-up or delivery at partner stores. “In-Store Shoppers” gather and provide the grocery order for pick-up, while “Full-Service Shoppers” gather the groceries, purchase them, and deliver them directly to the consumer.