In an unusual development, the United States Supreme Court ruled in favor of a worker in an arbitration case, ending a string of wins for employers in arbitration cases before the Court.
In the case, New Prime, Inc. v. Olveira, a truck driver classified by a company as an independent contractor sued for wage and hour violations, and the company asked the court to order him to submit his claims to arbitration instead. The driver claimed he did not have to arbitrate his claims because the Federal Arbitration Act does not apply to “contracts of employment” of seamen, railroad employees, or any other class of “workers” engaged in foreign or interstate commerce.
The Court first decided that, even though the parties’ contract contained a “delegation clause” reserving certain questions for an arbitrator, it was up to the court and not an arbitrator whether the Arbitration Act’s exclusion for workers in interstate commerce applied to the worker in this case.
The Court next decided that the Act’s exclusion for workers in interstate commerce applied to the truck driver in this case, since there was no doubt he worked in interstate commerce, and since, when the Act was passed in 1925, the term “contracts of employment” included contracts with independent contractors as well as with employees.
The worker is now free to pursue his claims in court instead of arbitration. The Court’s decision was unanimous, and the opinion of the Court was written by Justice Neil Gorsuch, President Trump’s first appointment to the Supreme Court.