Case No. 17-340 | 1st Cir.
Preview by Michelle Divelbiss, Online Editor
The Federal Arbitration Act (“FAA”) has received a lot of attention in recent years in cases like American Express Co. v. Italian Colors Restaurant, AT&T Mobility v. Concepcion, and, just last term, Epic Systems Corp. v. Lewis. The FAA does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1 (2018). The respondent is an independent contractor with the petitioner New Prime, Inc., an interstate trucking company. At issue is the respondent’s employment agreement with the petitioner, which contains a mandatory arbitration provision.
The petitioner contends that the First Circuit erred by interpreting “contracts of employment” broadly and by construing the term to mean not only contracts with employees, but also contracts with non-employees (e.g., independent contractors). The petitioner supports its position by pointing to a previous Supreme Court decision that found that “the Section 1 exemption must be given a ‘precise reading’ and ‘a narrow construction.’” Brief for Petitioner at 3, New Prime, Inc. v. Oliveira, No. 17-340 (U.S. filed May 14, 2018) (quoting Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 118–19 (2001)).
The respondent, however, argues that “contract of employment” means “any work agreement—including that of an independent contractor”—because the FAA explicitly provides that it does not apply to “any other class of workers engaged in foreign or interstate commerce.” Brief for Respondent at 1, New Prime, Inc. v. Oliveira, No. 17-340 (U.S. filed July 18, 2018); 9 U.S.C. § 1 (emphasis added). It is also of note that the petitioner’s drivers are classified either as employees or are paid a $100 bonus and classified as independent contractors. Both types of drivers perform identical work, blurring the line between employee and independent contractor.
The Court will look to (1) whether a dispute over the applicability of § 1 should be disputed in a court or should be resolved in arbitration, and (2) the meaning of the term “contracts of employment”—whether it applies to any “agreements to perform work” or only to those agreements between employers and employees. Brief for Respondent at i.