The U.S. Supreme Court ruled recently that the Federal Arbitration Act (FAA), which the Court has relied upon time and again to uphold the validity of employment and other types of arbitration agreements, does not allow arbitration of transportation workers’ employment disputes, regardless of whether the worker is an employee or an independent contractor.

The ruling by the High Court in New Prime Inc. v. Oliveira, No. 17-340 (U.S. January 15, 2019), though narrow, is noteworthy because it represents a rare departure from the long line of decisions by the Court embracing arbitration as a valid legal alternative to court litigation.

At issue before the Court was whether an independent contractor truck driver could be ordered to arbitrate a wage dispute with the company for which he drove. The driver argued that he could not be forced to arbitrate the dispute, even though he and the company had agreed to do so, pointing to the exception in the FAA that carves out any dispute brought by a transportation worker. 

A unanimous Supreme Court, upholding a decision issued by the First Circuit Court of Appeals, agreed that the FAA exception does indeed prevent a court from ordering transportation workers to arbitrate their disputes, regardless of whether they are employees or independent contractors. (Justice Kavanaugh did not participate.)

Members of the Center for Workplace Compliance (CWC) can read more here.