Supreme Court Steers Transportation Workers Away From Arbitration

In New Prime Inc. v. Oliveria, the Supreme Court of the United States issued an opinion, holding that Section 1 of the Federal Arbitration Act (“FAA”) limits the scope of a court’s authority to stay litigation and compel arbitration when addressing “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  This “other class of workers” includes truck drivers like in New Prime, transportation workers, or workers involved in the “flow” of “goods and services for interstate markets and their transport and distribution to the consumer.”  Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265 (1995). A court must first determine whether the worker at issue is excluded from the FAA by Section 1 — regardless of the arbitration agreement or a delegation clause, and regardless of whether the worker may have an independent contractor agreement or is a traditional employee.  If the worker is a transportation worker excluded under the FAA’s section 1, then “nothing” in the FAA may be used to compel arbitration in disputes involving the “contracts of employment.” This represents a victory for transportation workers who can continue to bring class action lawsuits, and another FAA decision since Epic Sys. Corp. v. Lewis. 138 S. Ct. 1612 (2018).