On January 15, the US Supreme Court unanimously decided that a court must first determine whether the Federal Arbitration Act’s Section 1 exclusion for disputes involving the “contracts of employment” of certain transportation workers applies before ordering arbitration. The Court also ruled that the phrase “contracts of employment” refers to any work contract, not just contracts which call a worker an employee as opposed to a contractor. This means that cases for truckers and other similar workers engaged in interstate commerce cannot be forced into arbitration under the FAA.

The issue in New Prime v. Oliveira was whether truck drivers whose wages have been stolen can be forced into arbitration because their employment contract says they are independent contractors and not employees. Until now, companies have tried to have arbitrators decide whether truckers are independent contractors or employees rather than the Courts, but today’s ruling changes that.

Dominic Oliveira filed a lawsuit against New Prime in 2015, alleging that he was classified as an independent contractor even though he was treated as an employee. New Prime claimed that an arbitrator must decide this issue, but Oliveira claimed that the court lacked authority to send the case to arbitration until it ruled on the Section 1 exemption, because Section 1 of the FAA excepts from coverage disputes involving “contracts of employment” of certain transportation workers. This is a rare victory for workers in the current Supreme Court.

You can read the decision here: