Unreported / Non-Citable
Background
Angela Tisdale and Terrence Pratt sued Apria Healthcare on behalf of themselves and a proposed class. They worked in a class of couriers who moved home medical equipment between Apria branches and customers within California. Apria sought to compel arbitration under the Federal Arbitration Act (FAA), the federal statute generally requiring courts to enforce covered arbitration agreements.
The workers invoked the FAA’s transportation-worker exemption, which excludes employment contracts of certain workers engaged in interstate commerce. The district court denied arbitration after concluding that nearly one quarter of the couriers’ work involved delivering interstate goods. Apria appealed, arguing that the record did not support that conclusion and that its equipment-rental model mattered to the interstate-commerce analysis.
The Court’s Holding
The Ninth Circuit reversed, vacated the denial of arbitration, and remanded for additional fact finding. Under the Supreme Court’s two-step framework, a court first defines the relevant class of workers and then asks whether that class is engaged in interstate commerce. The parties agreed that the class consisted of couriers transporting equipment between California branches and customers, but the record did not establish how that work connected to the interstate flow of goods.
The panel explained that some unknown quantity of goods at Apria distribution centers originated outside California, but the evidence did not show what portion the couriers actually transported or distinguish sales from rentals. Most customer purchases involved goods already stocked at in-state distribution centers. Without findings about Apria’s supply chain and the couriers’ role in it, the district court could not decide whether their work played a tangible and meaningful role in interstate commerce. On remand, the employees retain the burden of proving the exemption.
Key Takeaways
- A worker does not establish the FAA transportation-worker exemption merely by showing that an employer handles some goods originating outside the state.
- Courts must examine the actual class of workers, the employer’s supply chain, and how the workers move goods through that chain.
- A rental-heavy business model may differ materially from a direct-sale distribution model when tracing the interstate journey of goods.
- The party invoking the exemption bears the burden and should develop transaction-level or operational evidence rather than rely on broad percentages.
Why It Matters
California employers and employees litigating arbitration should expect a fact-intensive inquiry when local delivery work is said to fall outside the FAA. Evidence about inventory ownership, customer ordering, warehouse stops, rentals, returns, and the point at which an interstate journey ends can control the result.
The decision does not hold that Apria’s couriers are covered by the FAA. It requires a better record, making early discovery and declarations about the real movement of goods especially important.
On remand, useful evidence may include purchase and rental records, shipping documents, warehouse practices, route assignments, and testimony explaining whether an item was still moving toward a customer as part of an interstate journey. The court specifically rejected an assumption that the percentage of rented goods supplied the missing answer about sold goods. That distinction makes the denominator and product categories important, not merely the fact that Apria purchases inventory nationally.
The memorandum is unpublished and generally nonprecedential under Ninth Circuit rules, but its application of the Supreme Court framework is still instructive. Parties should frame the worker class by the work actually performed and avoid definitions driven only by job titles. A court needs enough operational detail to evaluate how, when, and where the relevant goods move.
As a practical matter, lawyers should preserve the governing issue clearly, build the factual record before the trial court or agency, and distinguish what the decision resolves from questions left open. Careful issue framing and complete supporting evidence remain essential at every stage of court review, including any later appeal or subsequent remand proceeding.