New Prime Decision Adds Uncertainty to Arbitration in the Transportation Industry

The U.S. Supreme Court’s decision in New Prime v. Oliveira, No. 17-340 (Jan. 15, 2019), has added uncertainty to arbitration agreements in the transportation industry by holding that the Federal Arbitration Act (FAA) § 1 exception covers both employees and independent contractors of a trucking company. In a unanimous opinion written by Justice Neil Gorsuch, the Court found that the 1925 vintage language of § 1 of the FAA excluding “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” applied beyond the formal employee or master-servant relationship to “agreements to perform work.” New Prime Inc. is an interstate trucking company, and Dominic Oliveira  is one of its drivers who brought a class action alleging that New Prime deprived its drivers of proper wages. The company sought arbitration to resolve the dispute. The case presented two issues. First, who…

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