New Prime v. Oliveira


On January 15, 2019, the U.S. Supreme Court issued its decision in the matter of New Prime v. Oliveira. This case presented important issues impacting employment law and interstate commerce. Specifically, the High Court was presented with two issues arising from an independent contractor agreement between a driver and a transportation company that contained an arbitration clause —which required that all disputes between the parties be resolved via arbitration versus the filing of a lawsuit. The first issue was who was to decide if a claim falls within the transportation workers exception to the Federal Arbitration Act (“FAA”), a court or an arbitrator. The second issue was whether the transportation workers exception to the FAA (which refers to “contracts of employment”) apply when, on the face of the independent contractor agreement, the plaintiff is not an employee? The Court held that a court —rather than an arbitrator —was to resolve a dispute over the applicability of the FAA’s Section 1 exemption for “contracts of employment of transportation workers.” The Court held further that the driver’s independent contractor agreement with New Prime, an interstate trucking company, falls within the Section 1 exemption from the FAA, which allowed Oliveira to escape the requirement of having his dispute resolved by arbitration. The Court was not presented with the issue of whether Oliveira was properly classified as an independent contractor, which remains a hot topic for all transportation and employment law practitioners.

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