Parsing an Arbitration Exemption
If anyone doubts that arbitration cases continue to be a hot area of interest for the justices, take a look at this term and the last 30 years. The high court has had a steady diet of arbitration challenges with a majority of justices exhibiting a pro-arbitration bent.
This morning, the justices delve into one of three arbitration cases this term.
New Prime Inc. v. Oliveira raises two questions that were issues of first impression in the U.S. Court of Appeals for the First Circuit and are of major significance to the transportation industry in general, and truckers in particular.
And like many arbitration fights, this one pits business and industry against workers, unions and consumer groups.
Dominic Oliveira, considered an independent contractor by New Prime, sued the company in a putative class action in Massachusetts federal district court. He alleged the company failed to pay minimum wages under the federal Fair Labor Standards Act and also claimed breach of contract. New Prime moved to compel arbitration. Oliveira opposed the motion, arguing that his contract was exempt under the Federal Arbitration Act’s “contract of employment” exemption.
The FAA exemption applies to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
New Prime, represented by
Theodore Boutrous of
Gibson, Dunn & Crutcher, contends the exemption
does not apply to independent contractor agreements. Oliveira’s counsel,
Jennifer Bennett of
Public Justice,
counters that when the FAA was enacted, the ordinary meaning of “contracts of employment” included independent contractor agreements.
The justices agreed to decide whether the dispute over the application of the exemption must be resolved in arbitration, and whether the exemption applies to independent contractor agreements.
>> Lining up in support of New Prime is the U.S. Chamber of Commerce, represented by
Mayer Brown’s
Andrew Pincus. In his amicus brief, Pincus
argues that the First Circuit decision for Oliveira is “wrong under the plain text” of the exemption and under the context in which Congress enacted the FAA. He warns a decision for Oliveira would undermine “an entire industry’s reliance on the national policy favoring arbitration.
>> The libertarian Cato Institute also
weighs in for New Prime. Its counsel,
Andrew Grossman of
Baker & Hostetler, contends that when the FAA was enacted, courts, contemporaneous state laws, dictionaries and treatises distinguished between “employees” and “independent contractors.”
>> Others supporting New Prime include
Robert Hulteng of
Littler Mendelsonfor the Customized Logistics and Delivery Association;
Benjamin Robbins of the New England Legal Foundation and
Richard Pianka of the American Trucking Association Litigation Center.
>> Oliveira’s amicus support includes Public Citizen, Massachusetts and 13 states, International Brotherhood of Teamsters, Constitutional Accountability Center, American Association for Justice, Sen.
Sheldon Whitehouse, D-Rhode Island, and more. Whitehouse filed his first-ever
amicus brief as counsel of record.
>>
Anna Prakash of Minneapolis’s
Nichols Kaster, counsel to a group of employment law scholars,
tells the court that a number of statutory and regulatory regimes do not distinguish between independent contractors and employees. “Courts determine worker status under federal employment statutes by examining all relevant aspects of the working relationship,” she writes.
>> And
Paul Cullen Jr. of Washington's
Cullen Law Firm,
argues the high court’s decision will determine “whether or not owner-operators will continue to have any meaningful opportunity to protect their small businesses from the type of predatory behavior” described by Oliveira.
Comments
Post a Comment