Originally from Alternatives to the High Cost of Litigation

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The U.S. Supreme Court on Feb. 26 added its second arbitration case of the 2017-2018 term, granting certiorari in Oliveira v. New Prime Inc., Docket No. 17-340. The case that could have broad Federal Arbitration Act implications—either in supporting arbitration requirements in independent contractors’ employment agreements, or undermining them.

The First U.S. Court of Appeals decision that the Court will review put the FAA applicability decision in the hands of a judge, not an arbitrator. That’s seemingly at odds with Supreme Court delegation cases, though the wrinkle in the case is applicability to employment matters, not commercial contracts. 

The plaintiff maintains that the FAA Sec. 1 exemption for transportation workers removes the case from immediate FAA applicability and puts the arbitration decision in hands of a judge, as opposed to arbitrability of a commercial contract, which usually goes to arbitrators.

But the headline when the case is decided undoubtedly will be about independent contractors, whose numbers have swelled significantly over the past two decades. The Court will tackle the thorny issue of whether independent contractors fall within the “contracts of employment” removed from the FAA by Sec. 1