Arbitration – Non-signatory

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Where (1) a plaintiff who provided courier services brought suit alleging that the defendant misclassified its couriers as independent contractors and failed to pay them appropriate wages and (2) the defendant moved to compel arbitration based on a provision in a vendor agreement between it and a limited liability company that the defendant required the plaintiff to form in order to provide it with courier services, a decision by a U.S. District Court judge to deny the defendant’s motion to compel should be affirmed because the judge did not err in determining that the plaintiff was not a signatory to the vendor agreement and could not be bound by its arbitration provision as a matter of contract law or under principles of equitable estoppel.

“For several years, Abdulkadir Abdisalam provided courier services for Strategic Delivery Solutions, LLC (‘SDS’), a healthcare delivery company. Eventually, he sued SDS, alleging that it misclassified its couriers as independent contractors and failed to pay them appropriate wages, all in violation of Massachusetts law. In response, SDS filed a motion to stay the case and compel arbitration of Abdisalam’s claims. SDS pointed to an arbitration provision in an agreement between it and Abdul Courier, LLC, a corporation that SDS had required Abdisalam to form in order to provide it with courier services. The district court determined that Abdisalam was not a signatory to that agreement and could not be bound by its arbitration provision as a matter of contract law or under principles of equitable estoppel; it then denied SDS’s motion. We agree with the district court’s ruling and thus affirm. …

“Abdul Courier, LLC and SDS entered into an Independent Vendor Agreement for Transportation Services (the ‘Vendor Agreement’) in April 2019. The Vendor Agreement is a form contract that SDS prepared; neither Abdul Courier, LLC nor Abdisalam drafted or negotiated any portion of it. Abdisalam signed the Vendor Agreement as the ‘Owner’ of Abdul Courier, LLC. …

“The parties’ dispute focuses on three central questions. First, who should have decided whether Abdisalam was bound by the Vendor Agreement’s arbitration provision: the district court or an arbitrator? Second, assuming that the district court should have decided the first question, did the court correctly determine that Abdisalam did not sign the Vendor Agreement in his personal capacity, and thus was not bound by its arbitration provision? And third, even if Abdisalam did not sign the Vendor Agreement in his personal capacity, could SDS nevertheless compel him to arbitrate his claims based on various theories of equitable estoppel? We conclude that the district court correctly resolved all these issues in Abdisalam’s favor.

“In conducting our review, we focus on the Vendor Agreement, which we must interpret based on Massachusetts law under its ‘Governing Law’ provision. …

“Moving to the substantive question of whether Abdisalam was a party to the Vendor Agreement, SDS relies on two primary arguments in challenging the district court’s decision that he was not. It points to Abdisalam’s signature as the ‘Owner’ of Abdul Courier, LLC in several places in the agreement, and it highlights that Abdisalam continued to provide courier services even after Abdul Courier, LLC was dissolved. We hold that neither of these arguments can prevail given the agreement’s text. …

“In sum, as the district court concluded, ‘nothing in the plain text of the [Vendor Agreement] evinces an intent to personally bind [Abdisalam] to its terms and conditions.’ That Abdisalam continued to provide delivery services to SDS after Abdul Courier, LLC was dissolved cannot revise the plain text of the Vendor Agreement. Because Abdisalam is not a signatory to the Vendor Agreement, the Vendor Agreement’s terms, including its arbitration provision, do not bind him in his personal capacity. …

“We now turn to SDS’s alternative arguments that it can compel Abdisalam to arbitrate, even as a nonsignatory to the Vendor Agreement. SDS presses three theories in support of its position: (1) direct benefits estoppel, (2) intertwined claims estoppel, and (3) a successor-in-interest theory. According to SDS, each of these theories independently compels Abdisalam to arbitrate his claims. As we explain below, we disagree. …

“The district court determined that ‘any benefit [Abdisalam] may have received in his personal capacity for performance of the contract was, at best, indirect.’ SDS has not persuaded us that the district court erred in so concluding. …

“We agree with the district court that, under Massachusetts law, any benefit that Abdisalam received from the Vendor Agreement was, ‘at best, indirect.’ That is, the benefit flowed from Abdul Courier, LLC’s relationship with SDS, which permitted Abdisalam to act as a courier for the company, not from the Vendor Agreement itself. …

“Because Abdisalam neither directly benefited from nor personally embraced the Vendor Agreement while it was in force, SDS cannot rely on direct benefits estoppel to compel him to arbitrate his claims. …

“Next, we consider SDS’s argument that Abdisalam must arbitrate his claims because they are ‘intertwined’ with the Vendor Agreement. The district court rejected this argument as well. It explained that ‘it [was] not clear to the court how SDS [could] plausibly maintain that Abdisalam’s individual employment-based claims hinge on how his work was classified in a third-party contract to which he was not personally a signatory.’ Again, we agree with the district court’s ruling. …

“We have not found any Massachusetts state court case, or any case from our court for that matter, permitting a signatory to compel a nonsignatory to arbitrate based on intertwined claims estoppel. …

“As a federal court sitting in diversity, we decline SDS’s invitation to apply intertwined claims estoppel to permit a signatory to compel a nonsignatory to arbitrate when Massachusetts courts have not clearly done so, especially when SDS has failed to provide any persuasive justification for such a holding. …

“Finally, SDS relies on a successor-in-interest theory to require Abdisalam to arbitrate his claims. In short, SDS argues that Abdisalam assumed Abdul Courier, LLC’s obligations under the Vendor Agreement as its successor in interest. The district court rejected SDS’s argument, reasoning that SDS had ‘offer[ed] no evidence that Abdisalam personally assumed’ Abdul Courier, LLC’s obligations or acted as the ‘mere continuation’ of Abdul Courier, LLC. We agree that Abdisalam does not qualify as a successor in interest to Abdul Courier, LLC. …

“Based on our review of Massachusetts law, a successor-in-interest theory does not map onto the undisputed facts of this case. To the extent Massachusetts courts have applied the theory, they have done so primarily when one business entity has reorganized into another to avoid paying its debts. …

“Here, following its involuntary dissolution at the end of 2023, Abdul Courier, LLC did not reorganize into or continue as another business entity. Rather, Abdul Courier, LLC remained defunct, and no other business entity assumed its obligations under the Vendor Agreement. And there is no suggestion in the record that Abdul Courier, LLC acquired any debt during its existence or that its involuntary dissolution related to any such debt. Although Abdisalam continued to perform deliveries for SDS through October 2024, his performance, without more, does not render him a successor in interest to Abdul Courier, LLC under Massachusetts law. …

“Thus, we reject SDS’s alternative theories for compelling Abdisalam, a nonsignatory, to arbitrate under the Vendor Agreement.”

Abdisalam v. Strategic Delivery Solutions, LLC (Lawyers Weekly No. 01-050-26) (27 pages) (Rikelman, J.) Appealed from a decision by Stearns, J., in the U.S. District Court for the District of Massachusetts. James A. Eckhart, with whom Andrew J. Butcher and Scopelitis, Garvin, Light, Hanson & Feary were on brief, for the defendant-appellant; Brant Casavant, with whom Brook Lane and Fair Work P.C. were on brief, for the plaintiff-appellee (Docket No. 25-1254) (March 17, 2026).

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