Not a Lexis Advance subscriber? Try it out for free.

New Prime Inc. v. Oliveira

Supreme Court of the United States

October 3, 2018, Argued; January 15, 2019, Decided

No. 17-340.

Opinion

 [*536]  [**541]   Justice Gorsuch delivered the opinion of the Court.

The Federal Arbitration Act requires courts to enforce private arbitration agreements. But like most laws, this one bears its qualifications. Among other things, §1 says that “nothing herein” may be used to compel arbitration in disputes involving the “contracts of employment” of certain transportation workers. 9 U. S. C. §1. And that qualification has sparked these questions: When a contract delegates questions of arbitrability to an arbitrator, must a court leave disputes over the application of §1’s exception for the arbitrator to resolve? And does the term “contracts of employment” refer only to contracts between employers and employees, or does it also reach contracts with independent contractors? Because courts across the country have disagreed on the answers to these questions, we took this case to resolve them.

New Prime is an interstate trucking company and Dominic Oliveira works as one of its drivers. But, at least on paper, Mr. Oliveira isn’t an employee; the parties’ contracts label him an independent contractor. Those agreements [***7]  also instruct that any disputes arising out of the parties’ relationship should be resolved by an arbitrator—even disputes over the scope of the arbitrator’s authority.

Eventually, of course, a dispute did arise. In a class action lawsuit in federal court, Mr. Oliveira argued that New Prime denies its drivers lawful wages. The company may call its drivers independent contractors. But, Mr. Oliveira alleged, in reality New Prime treats them as employees and fails to pay the statutorily due minimum wage. In response to Mr. Oliveira’s complaint, New Prime asked the court to invoke its statutory authority under the Act and compel arbitration according to the terms found in the parties’ agreements.

That request led to more than a little litigation of its own. Even when the parties’ contracts mandate arbitration, Mr. Oliveira observed, the Act doesn’t always authorize a court to enter an order compelling it. In particular, §1 carves out from the Act’s coverage “contracts of employment of . . . workers engaged in foreign or interstate commerce.” And at least for purposes of this collateral dispute, Mr. Oliveira submitted, it doesn’t matter whether you view him as an employee or independent contractor. [***8]  Either way, his agreement to drive trucks for New Prime qualifies as a “contract[ ] of employment of . . . [a] worker[ ] engaged in . . . interstate commerce.” Accordingly, Mr. Oliveira argued, the Act supplied the district court with no authority to compel arbitration in this case.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

139 S. Ct. 532 *; 202 L. Ed. 2d 536 **; 2019 U.S. LEXIS 724 ***; 169 Lab. Cas. (CCH) P36,680; 2019 AMC 1; 27 Fla. L. Weekly Fed. S 628; 2019 WL 189342

NEW PRIME INC., Petitioner v. DOMINIC OLIVEIRA

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Prior History:  [***1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT

Oliveira v. New Prime, Inc., 857 F.3d 7, 2017 U.S. App. LEXIS 8474 (1st Cir. Mass., May 12, 2017)

Disposition: Affirmed.

CORE TERMS

arbitration, employment contract, Dictionary, independent contractor, the Act, contracts, term contract, employer-employee, employees, servant, terms, interstate commerce, perform work, transportation, delegation, courts, compel arbitration, disputes, arbitration agreement, employer and employee, railroad employee, railroads, appears, parties, cases

Business & Corporate Compliance, Arbitration, Federal Arbitration Act, Scope, Orders to Compel Arbitration, Stay Pending Arbitration, Arbitration Agreements, Alternative Dispute Resolution, Arbitrability, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Governments, Legislation, Interpretation