Abdulkadir Abdisalam provided courier services for Strategic Delivery Solutions, LLC (SDS), a healthcare delivery company. SDS required Abdisalam to form his own corporation, Abdul Courier, LLC, before he could work for them. In April 2019, Abdul Courier, LLC and SDS entered into an Independent Vendor Agreement containing an arbitration provision. Abdisalam signed the agreement as the 'Owner' of the LLC. In July 2024, Abdisalam sued SDS in state court, alleging that SDS misclassified couriers as independent contractors and failed to pay wages under Massachusetts law. SDS removed the case to federal court and moved to compel arbitration, arguing Abdisalam was bound by the agreement. The district court denied the motion, finding Abdisalam was not a personal signatory and could not be bound under contract law or equitable estoppel. SDS appealed.
The First Circuit reviewed the case de novo under Massachusetts law. First, the court addressed arbitrability, ruling that the question of whether Abdisalam was bound by the agreement was a 'gateway dispute' for the court, not an arbitrator, because he attacked the very existence of an agreement between himself and SDS. Second, the court analyzed the text of the Vendor Agreement. The agreement explicitly identified the parties as 'ABDUL COURIER LLC' and 'SDS.' Although Abdisalam signed the document, he did so only in his capacity as the 'Owner' of the LLC. Under Massachusetts law, a person contracting for a disclosed principal does not become a party to the contract. The agreement also distinguished between the 'Vendor' and 'Vendor Support Personnel,' and the arbitration clause referred only to 'the parties,' not support personnel. Third, the court rejected SDS's equitable estoppel arguments. For direct benefits estoppel, the court held that any benefits Abdisalam received flowed to the LLC, not him personally. The court emphasized that LLCs are separate entities from their owners and that SDS did not argue to pierce the corporate veil. For intertwined claims estoppel, the court noted that Massachusetts law generally allows nonsignatories to compel signatories to arbitrate, but not the reverse. Finally, the successor-in-interest theory failed because the LLC was dissolved involuntarily and did not reorganize into a new entity; Abdisalam's continued work did not make him a legal successor to the LLC's obligations.
The decision affirms the district court's denial of the motion to compel arbitration, allowing Abdisalam's wage and hour claims to proceed in court. It clarifies that under Massachusetts law, signing a contract as a corporate owner does not create personal liability for arbitration unless the text explicitly binds the individual. The ruling limits the use of equitable estoppel to compel arbitration against individuals who are not signatories, particularly when benefits flow to a separate corporate entity. The case remains open for trial on the merits of the misclassification and wage claims.
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