In New Prime v. Oliveira, the U.S. Supreme Court ruled that truck and delivery drivers, and other transportation workers, are not subject to the Federal Arbitration Act, a law that eliminates many of the individual states’ protections for workers. The question before the court was whether the transportation worker exception in the Federal Arbitration Act only applies to workers classified as employees, or whether it also applies to workers classified as independent contractors. The Supreme Court held that the exception covers independent contractors as well.
SCOTUSblog explains that the New Prime
opinion for a unanimous court rejects a claim for arbitration for the first time in a string of more than a dozen of the Supreme Court’s cases stretching back more than a decade. Indeed, I doubt the court has rejected such a claim in any previous decision since the turn of the millennium.
Just because truck and delivery drivers are not subject to the Federal Arbitration Act does not necessarily mean that they are not subject to arbitration. The Federal Arbitration Act, as the Supreme Court has interpreted it, was designed to force stubborn judges and states to enforce arbitration agreements, when they didn’t want to. Some states, such as California, have broad rules that arbitration clauses cannot be used to force California independent contractors or employees to give up their right to participate in a class action. But the Federal Arbitration Act preempts those state laws, if the Act applies. Because the Act doesn’t apply to transportation drivers, California workers who drive trucks or delivery vehicles may be able, once again, to file a class action lawsuit against their hiring companies, even if they have been classified as independent contractors — an increasingly common practice.
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