By Sharon Gold
Over the past few decades, the US Supreme Court has become a very arbitration-friendly Court. Indeed, in the last decade, the Court has upheld arbitration in numerous decisions. This week, in a rare victory for arbitration opponents, the Supreme Court in New Prime Inc. v. Oliveira unanimously rejected arbitration for truck drivers who were classified as independent contractors under the narrow transportation exception. At issue was an exception to the enforceability of arbitration clauses for “contracts of employment” of workers engaged as seamen, railroad workers or those engaged in foreign or interstate commerce under the Federal Arbitration Act. Both parties in the case agreed that truck driver employees fell within the exception. The questions at issue were: 1) Should the Court decide the initial issue of enforceability of arbitration or should an arbitrator; and 2) Whether the transportation exclusion applied to independent contractors rather than just employees.
The Court initially held that the decision of whether the exclusion applied was one for the Court to decide because it dealt with the statutory authority of the Court. In another case decided by the Court this term, the Court held that the interpretation of an arbitration agreement, on the other hand, would be subject to review by an arbitrator who would then decide whether arbitration was proper. Here, because the exclusion concerned the Court’s statutory authority to Continue reading