New Prime Inc. v. Oliveira, Docket 17-340

Employment Agreements

Labor Law

Contract of employment - Definition

Arbitration

Exceptions

Transportation Workers (Seamen, Railroad Employees, or any other Class of Work­ers Engaged in Foreign or Interstate Commerce)

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.

A court should determine whether a §1 exclusion applies before ordering arbitration. A court’s authority to compel arbitration under the Act does not extend to all private contracts, no matter how em­phatically they may express a preference for arbitration. Instead, an­tecedent statutory provisions limit the scope of a court’s §§3 and 4 powers to stay litigation and compel arbitration “according to the terms” of the parties’ agreement. Section 2 provides that the Act ap­plies only when the agreement is set forth as “a written provision in any maritime transaction or a contract evidencing a transaction in­volving commerce.” And §1 helps define §2’s terms, warning, as rele­vant here, that “nothing” in the Act “shall apply” to “contracts of em­ployment of seamen, railroad employees, or any other class of work­ers engaged in foreign or interstate commerce.” For a court to invoke its statutory authority under §§3 and 4, it must first know if the par­ties’ agreement is excluded from the Act’s coverage by the terms of §§1 and 2. This sequencing is significant.

Petitioner New Prime Inc. is an interstate trucking company, and re­spondent Dominic Oliveira is one of its drivers. Mr. Oliveira works under an operating agreement that calls him an independent con­tractor and contains a mandatory arbitration provision.

Because the Act’s term “contract of employment” refers to any agreement to perform work, Mr. Oliveira’s agreement with New Prime falls within §1’s exception.

At the time of the Act’s adoption in 1925, the phrase “contract of employment” was not a term of art, and dictionaries tended to treat “employment” more or less as a synonym for “work.” Contemporaneous legal authorities provide no evidence that a “contract of employment” necessarily sig­naled a formal employer-employee relationship. Evidence that Con­gress used the term “contracts of employment” broadly can be found in its choice of the neighboring term “workers,” a term that easily embraces independent contractors.

Secondary authorities: N. Singer & J. Singer, Suth­erland on Statutes and Statutory Construction §56A:3 (rev. 7th ed. 2012).

(U.S. Supreme Court, Jan. 15, 2019, New Prime Inc. v. Oliveira, Docket 17-340, J. Gorsuch)