About five years after truck driver Dominic Oliveira won a U.S. Supreme Court case, the high court once again will tackle the issue of the Federal Arbitration Act in trucking.
On Feb. 20, the Supreme Court is scheduled to hear Bissonnette v. LePage Bakeries Park St., which aims to determine whether interstate truck drivers for private fleets are exempt from the longstanding arbitration law. In other words, does a transportation worker have to be employed by a company in the transportation industry to be exempt from the FAA?
The FAA prohibits courts from applying the statute to the “contracts of employment of seamen, railroad employers or any other class of workers engaged in foreign or interstate commerce.”
In the Oliveira case, the court already ruled that interstate transportation workers, including independent contractors, are exempt.
This time around, the court could determine whether millions of truck drivers for private fleets are bound to arbitration agreements at their companies.
“Many manufacturers, retailers and other companies whose primary business is not transportation use their own private fleets to ship goods,” the Congressional Research Service wrote in a recent report. “By some estimates, for instance, around 2 million truck drivers in the United States work in private truck fleets instead of for traditional trucking companies. The court’s decision in Bissonnette could determine whether arbitration agreements in these workers’ employment contracts are enforceable under the FAA.”
Bissonnette case
Neal Bissonnette and Tyler Wojnarowski entered into a distributor agreement with Flowers Foods in 2017 and 2018, respectively. The plaintiffs marketed, sold and delivered Flowers Foods’ baked goods to restaurants and stores under the agreement.
In 2019, Bissonnette and Wajnarowski filed a lawsuit over alleged violations of federal and state wage laws. The district court then granted the bakery’s motion to compel arbitration and dismissed the case. The U.S. Court of Appeals for the Second Circuit later upheld the ruling, concluding that even though the plaintiffs drove trucks, they worked in the baking industry.
However, courts have been mixed on that determination. The 11th Circuit also used the industry requirement, while the 1st and 7th Circuits have said the exemption still applies. Specifically, the 7th Circuit argued that “a trucker is a transportation worker regardless of whether he transports his employer’s goods or the goods of a third party.”
The Supreme Court now is tasked with deciding which circuit courts are correct.
Oliveira case
In 2019, the Supreme Court upheld a First Circuit decision that ruled against New Prime, saying that the trucking company couldn’t compel arbitration in a lawsuit brought against it by Oliveira.
The court had to determine whether the term “contracts of employment” in the FAA meant that the exemption applied only to employee drivers.
Justice Neil Gorsuch delivered the opinion of the court, in which all other justices joined except Justice Brett Kavanaugh, who didn’t take part in the case.
“When Congress enacted the Arbitration Act in 1925, the term ‘contracts of employment’ referred to agreements to perform work,” Gorsuch wrote. “No less than those who came before him, Mr. Oliveira is entitled to the benefit of that same understanding today. Accordingly, his agreement with New Prime falls within (the) exception. The court of appeals was correct that it lacked authority under the Act to order arbitration.” LL
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