While the U.S. Supreme Court has a long history of supporting big business, on January 15, 2019 interstate truck driver contractors received their support. In an 8-0 decision, interstate truck drivers were found to be exempt from the mandatory arbitration clause typically associated with contractors.
Contractors are typically mandated by law to settle disputes with their employers through private arbitration. This precedent is set by the Federal Arbitration Act (FAA) of 1925. The case New Prime v. Oliveira declares that interstate truck drivers qualify as employees and must be allowed to collectively sue their employer if their rights are violated.
How does this case differ from previous cases?
Courts typically interpret the FAA of 1925 as the right for employers to protect themselves against costly litigation with contractors. This way they avoid media exposure and certain legal fees. Independent contractors are also exempt from certain employment laws including minimum wage, overtime, workplace injuries and other statutes.
The 1925 language of the FAA only covers contractors, not those under “contract of employment” or in today’s words, “employment.” However, Justice Gorsuch pointed out in his opinion that this key phrase exempts workers who engage in interstate commerce and now, this includes interstate truck drivers.
How does this reflect the current economy?
Employment groups such as the American Trucking Association and Teamsters Port Division advocate for non-union and other private contract workers they feel are misclassified and deserve the same protections as employees.
This case is one in a series of lawsuits and cultural discussions about who is an employee and who is a contractor, particularly among truckers. Many other people engage in the “gig economy” where they take on jobs that suit their skills and calendars and forgo the traditional office experience. It is important to carefully review your working contract before you sign to know your rights if disaster strikes.