The U.S. Supreme Court will hear a case that will decide whether labor disputes brought by independent contractors in the trucking industry are exempt from arbitration.
On Feb. 26, the Supreme Court granted the certiorari petition to hear the case between trucking company New Prime Inc., which is based in Springfield, Mo., and truck driver Dominic Oliveira.
Oliveira entered into New Prime’s student truck driver program, where drivers must attend a four-day orientation, and log 10,000 unpaid miles as a driver or passenger. After completing the supervised driving period, court documents said the student driver must take the examination for a commercial driver’s license and then drive 30,000 more miles as a B2 company driver trainee. B2 trainees were paid 14 cents per mile. After finishing the program, Oliveira became an independent contractor.
Later, Oliveira filed a class action against New Prime, alleging that the trucking company violated the Fair Labor Standards Act, as well as the Missouri minimum-wage statute. New Prime moved to compel arbitration under the Federal Arbitration Act.
The U.S. Court of Appeals for the First Circuit said the case raised two questions. First, must the court determine whether the FAA applies or must it grant the motion and let the arbitrator determine the applicability of the Act? Second, does Section 1 of the FAA, which exempts contracts of transportation workers, apply “to a transportation-worker agreement that establishes or purports to establish an independent-contractor relationship?”
The First Circuit determined last May that the applicability of the FAA is a threshold question for the court to determine before compelling arbitration under the Act. The court also ruled that the exemption did apply to independent contractors.
Prime petitioned the ruling to the Supreme Court, saying the First Circuit’s decision would deprive both companies and workers in the transportation industry of the benefits of the FAA.
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