U.S. Supreme Court Has Three Chances This Term to Bolster Arbitration
The three cases follow on the heels of last term's blockbuster Epic Systems v. Lewis, which said employment agreements can lawfully restrict class actions.
October 03, 2018 at 04:11 PM
4 minute read
The original version of this story was published on National Law Journal
The interests of employers and independent contractors in the transportation industry clashed Wednesday in the U.S. Supreme Court as the justices wrestled with whether those workers must submit their disputes to arbitration.
The major issue in New Prime v. Oliveira centers on an arbitration exemption in Section 1 of the Federal Arbitration Act. The exemption applies to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
Besides the question of whether the exemption applies to independent contractors, the justices also agreed to decide a threshold issue of who should answer the question first: a court or an arbitrator.
The challenge is one of three arbitration cases already on the court's argument docket in the new term.
Besides New Prime, the justices will hear arguments Oct. 29 in Lamp Plus v. Varela on whether the Federal Arbitration Act, or FAA, precludes a court from finding that under state law, an ambiguous arbitration agreement authorized class arbitration. On the same day, Henry Schein v. Archer and White Sales will be argued on whether the Federal Arbitration Act permits a court to decline to enforce an agreement that delegates arbitrability questions to an arbitrator if the court finds the arbitrability claim “wholly groundless.”
The three cases follow on the heels of last term's blockbuster Epic Systems v. Lewis, a trilogy of challenges in which a 5-4 majority said employee agreements that ban class or collective actions are enforceable under the Federal Arbitration Act.
Dominic Oliveira, an independent contractor and former New Prime driver, filed a putative class action in federal district court in which he charged New Prime with minimum wage violations of the Fair Labor Standards Act and breach of contract. New Prime, an interstate trucking company, moved to compel arbitration. The U.S. Court of Appeals for the First Circuit agreed with Oliveira that as an independent contractor he was exempt from the arbitration act.
During Wednesday's arguments, Gibson, Dunn & Crutcher partner Theodore Boutrous, counsel to New Prime, argued that the “plain meaning of the statute and its structure, purpose, history and context” make clear that “contracts of employment” in Section 1 include only agreements that establish an employer-employee relationship under common-law agency rules—and that does not include independent contractor agreements.
But Justice Neil Gorsuch told Boutrous that in 1925 when the Federal Arbitration Act was enacted, Congress didn't distinguish between employees and independent contractors. “There is a lot of historical evidence that 'contract of employment' swept more broadly,” he said.
Not “just a lot,” said Oliveira's counsel, Jennifer Bennett of Public Justice. She argued there was “overwhelming evidence” in 1925 that contracts of employment were a general category for agreements to perform work.
“Congress passed multiple statutes contemporaneous with the FAA that all used the phrase 'contracts of employment' to refer to independent contractors' agreements to perform work,” Bennett said.
Derek Barella, partner in Schiff Hardin's labor and employment practice group, said the court's ruling has “the potential to reverberate throughout the economy” given the “substantial and growing population of independent contractors in the transportation sector, and the fact that many businesses rely on arbitration to resolve disputes.”
Read more:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllFrom 'Confusing Labyrinth' to Speeding 'Roller Coaster': Uncertainty Reigns in Title IX as Litigators Await Second Trump Admin
6 minute readFederal Judge Weighs In on School's Discipline for 'Explicitly Copying AI-Generated Text' on Project
When Police Destroy Property, Is It a 'Taking'? Maybe So, Say Sotomayor, Gorsuch
Trending Stories
- 1Judge Denies Sean Combs Third Bail Bid, Citing Community Safety
- 2Republican FTC Commissioner: 'The Time for Rulemaking by the Biden-Harris FTC Is Over'
- 3NY Appellate Panel Cites Student's Disciplinary History While Sending Negligence Claim Against School District to Trial
- 4A Meta DIG and Its Nvidia Implications
- 5Deception or Coercion? California Supreme Court Grants Review in Jailhouse Confession Case
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250