WASHINGTON (CN) – A truck driver who brought a federal wage class action prevailed at the Supreme Court on Tuesday in keeping the dispute out of arbitration.
“The parties’ private agreement may be crystal clear and require arbitration of every question under the sun, but that does not necessarily mean the [Federal Arbitration] Act authorizes a court to stay litigation and send the parties to an arbitral forum,” Justice Neil Gorsuch wrote for the mostly unanimous court.
In the underlying case, New Prime truck driver Dominic Oliveira brought his wage suit in court, rather than before an arbitrator, based on a subsection of the FAA that excludes “contracts of employment of … workers engaged in foreign or interstate commerce.”
Oliveira and New Prime are indeed at odds over whether he worked for the company as an employee or independent contractor, but a federal judge found it indisputable that his employment contract showed him to be a worker engaged in interstate commerce.
New Prime petitioned the Supreme Court for relief after the First Circuit ruled against it as well, but Gorsuch put the challenge to rest once and for all.
The 15-page opinion emphasizes that “a court’s authority under the Arbitration Act to compel arbitration may be considerable, [but] it isn’t unconditional.”
Whereas Subsections 3 and 4 of the act tend to result in compelled arbitration and a stay of litigation, Gorsuch wrote “this authority doesn’t extend to all private contracts, no matter how emphatically they may express a preference for arbitration.”
“Given the statute’s terms and sequencing, we agree with the First Circuit that a court should decide for itself whether §1’s ‘contracts of employment’ exclusion applies before ordering arbitration,” he wrote.
Justice Brett Kavanaugh did not participate in either the consideration or decision of the case, but the ruling was otherwise unanimous.
Justice Ruth Bader Ginsburg wrote in a separate concurring opinion in which she cited occasions where Congress designed legislation to govern changing times and circumstances.
“As these illustrations suggest, sometimes, ‘words in statutes can enlarge or contract their scope as other changes, in law or in the world, require their application to new instances or make old applications anachronistic,’” she concluded.