The US Supreme Court ruled 8-0 Tuesday that courts lack authority under the Federal Arbitration Act to order arbitration in cases that involve contracted workers engaged in foreign or interstate commerce.
The appeal came in a class action lawsuit brought by Oliveira against the trucking company, New Prime, for unlawful wages paid to its drivers. Although New Prime calls its drivers independent contractors, Oliveira says they are treated as employees and are not compensated according to statutory wage minimums. New Prime argued that the court should compel arbitration according to the Federal Arbitration Act and the parties’ agreements.
At issue is the nature of “contracts of employment.” If decided to mean a traditional employer-employee relationship, nontraditional contracted workers could not qualify under section 1’s exclusion for disputes involving “contracts of employment of … workers engaged in foreign or interstate commerce.” The court decided that contracts of employment refer more broadly to contracts of work done by workers.
As such, contracted workers are allowed exemption under section 1 of the Federal Arbitration Act.
Justice Ruth Bader Ginsburg wrote a concurring opinion emphasizing the argument that words can “enlarge or contract their scope” over time. The broadening of the meaning of contracts of employment is appropriate.
Justice Brett Kavanaugh was not involved in the consideration or decision of the case.