Court Makes Transportation Workers Exempt from Federal Arbitration Act

On January 15, 2019, the Supreme Court unanimously ruled that independent contractors who work in the transportation industry may not be forced into mandatory arbitration. The decision will allow contractors to defend their rights in court.

The case, New Prime Inc. v. Oliveria, involved a dispute between a trucking company and one of its drivers. When the driver, Dominic Oliveria, began working for New Prime, he was required to complete 10,000 miles of hauling freight for free. Then, as a trainee, he had to complete an additional 30,000 miles for four dollars an hour. Once he became a driver, he was deemed a contractor and was forced to lease his own truck and pay for his own gas. This would not have been the case if the company had deemed him an employee.

In 2015, Oliveria filed a class-action lawsuit that alleged New Prime misclassified him as a contractor in order to intentionally underpay him – which is a violation of federal law; however, per Oliveria’s contract, all disputes had to be resolved through individual arbitration. Arbitration is the private, judicial determination of a dispute by an independent third party. In a case like this, however, the process usually favors the employers over the workers.

The Federal Arbitration Act, however, excludes contracts of employment with workers engaged in interstate commerce. New Prime, under that same Act, asserted that Oliveria’s claims needed to be dismissed because he was a contractor, not an employee. The company frequently listed workers as contractors as a way to work around the Federal Arbitration Act’s exemption.

The Supreme Courts’ recent decision now treats employees and contractors on equal grounds in regard to arbitration. All work is to be treated as employment, whether a formal employer-employee relationship exists. As a result of this decision, Oliveria’s class-action lawsuit may proceed to court on behalf of himself and thousands of other truckers and transportation contractors.

At Shrager & Sachs, we believe that all victims, no matter the circumstances, have the right to be heard. We understand that going up against large corporations can be challenging and intimidating, but we have the experience needed to achieve a successful outcome.

We provide fair legal representation for all of our clients and will continue to strive to help all Pennsylvania accident victims recover from the negligent actions of others. If you’re facing a legal matter, contact us today to learn about your options.