First Circuit Finds Class of Independent Truckers Excluded From Federal Arbitration Act
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The Federal Arbitration Act has been in effect for nearly 100 years (92, to be precise). Nevertheless, the First Circuit found two issues of first impression to address this month. In Oliveira v. New Prime, Inc., 2017 WL 1963461 (1st Cir. May 12, 2017), the court refused to compel arbitration of a class action complaint, because it interpreted Section One of the FAA to exempt contracts for independent transportation contractors.
Mr. Oliveira brought a putative class action suit against the interstate trucking company for which he worked–Prime–for violating the Fair Labor Standards Act, Missouri minimum wage statute, and other labor laws. Prime moved to compel arbitration under the FAA. In response, Plaintiffs argued that the FAA had no application to their contracts because they are transportation workers. Prime argued that that issue–the applicability of the FAA–should be decided by an arbitrator. Furthermore, it argued that the FAA does not exempt independent contractors and these workers had been classified as independent contractors. The district court agreed it must decide the threshold question, but then ordered discovery on the question of whether the named plaintiff was an independent contractor.
On appeal, the First Circuit decided to tackle both the tough legal issues head on, and not wait to see if discovery mooted either of them.
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