Uber Technologies Inc. drivers aren’t bound by an arbitration agreement that would keep their wage dispute out of court if they cross state lines when giving rides, the Third Circuit found in a ruling that clarifies a key exemption for these ride-hail workers.

New Jersey drivers for the gig economy platform shouldn’t have to arbitrate their claims if they engage in interstate commerce, Joseph A. Greenaway Jr. wrote Sept. 11 for the U.S. Court of Appeals for the Third Circuit. The three-judge panel overturned a lower court’s decision to send the case to arbitration, holding that an exemption under the...