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New Prime Inc. v. Oliveira

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Supreme Court of the United States
New Prime Inc. v. Oliveira
Term: 2018
Important Dates
Argument: October 3, 2018
Decided: January 15, 2019
Outcome
Affirmed
Vote
8-0
Majority
Chief Justice John G. Roberts • Clarence Thomas • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch
Concurring
Ruth Bader Ginsburg

New Prime Inc. v. Oliveira was argued before the Supreme Court of the United States on October 3, 2018, during the court's 2018-2019 term. The court affirmed the ruling of the United States Court of Appeals for the 1st Circuit, holding that "[a] court should determine whether the Federal Arbitration Act’s Section 1 exclusion for disputes involving the 'contracts of employment' of certain transportation workers applies before ordering arbitration; here, truck driver Dominic Oliveira’s independent contractor operating agreement with New Prime Inc. falls within that exception," according to SCOTUSblog. The case came on a writ of certiorari to the First Circuit.[1][2]

HIGHLIGHTS
  • The case: Dominic Oliveira filed a lawsuit against his employer, New Prime, Inc., in March 2015, alleging that they misclassified him as an independent contractor and, as a result, underpaid him. The company argued that because the contract Oliveira signed contained an arbitration clause, he could not sue the company in court due to the Federal Arbitration Act. The First Circuit disagreed, and ruled in favor of Oliveira.
  • The issue: There are two issues in this case: (1) Whether a dispute over applicability of the Federal Arbitration Act's Section 1 exemption is an arbitrability issue that must be resolved in arbitration pursuant to a valid delegation clause; and (2) whether the FAA's Section 1 exemption, which applies on its face only to “contracts of employment,” is inapplicable to independent contractor agreements.[2]
  • The outcome: The court affirmed the ruling of the United States Court of Appeals for the 1st Circuit, holding that "[a] court should determine whether the Federal Arbitration Act’s Section 1 exclusion for disputes involving the 'contracts of employment' of certain transportation workers applies before ordering arbitration; here, truck driver Dominic Oliveira’s independent contractor operating agreement with New Prime Inc. falls within that exception," according to SCOTUSblog.


    • You can review the lower court's opinion here.[3]

    Timeline

    The following timeline details key events in this case:

    • January 15, 2019: U.S. Supreme Court affirmed the First Circuit Court's ruling
    • October 3, 2018: Oral argument
    • February 26, 2018: U.S. Supreme Court agreed to hear case
    • September 6, 2017: Petition filed with U.S. Supreme Court
    • May 12, 2017: First Circuit ruled the Federal Arbitration Act does not apply in the case, allowing Oliveria to sue New Prime, Inc.

    Background

    Dominic Oliveira joined New Prime under a program advertised as a paid apprenticeship for freight truck drivers. During the course of his 10,000-mile apprenticeship, Oliveira was not paid. He was then required to drive an additional 30,000 miles as a driver trainee, during which time he was paid 14 cents per mile, or about $4 per hour. Following these two periods, Oliveira was then classified as an independent contractor, rather than employee, and required to lease his own truck, buy his own equipment, and purchase his own gas. Because this all had to be done from company-owned or related businesses, Oliveira's paycheck was sometimes negative—meaning he spent more to work than he made from working.[4]

    Oliveira filed a suit in court in March 2015, on behalf of himself and thousands of current and former drivers for Prime, alleging that many had been classified as independent contractors rather than employees and were subsequently underpaid. Prime filed a motion to compel the case to arbitration, arguing that the Federal Arbitration Act (FAA) required the matter to be settled out of court because of a clause signed as part of Oliveira's contract. Oliveira argued against the motion because the FAA explicitly exempts "transportation workers," but Prime argued that his status as an independent contractor meant the law should still apply to Oliveira.[4][5]

    On May 12, 2017, the United States Court of Appeals for the 1st Circuit affirmed a district court's ruling denying Prime's motion to compel arbitration in the case and then dismissed Prime's appeal. Prime appealed to the U.S. Supreme Court, and the court agreed to hear the case on February 28, 2018.

    Questions presented

    The petitioner presented the following questions to the court:[1]

    Questions presented:
    • 1. Whether a dispute over applicability of the FAA's Section 1 exemption is an arbitrability issue that must be resolved in arbitration pursuant to a valid delegation clause.
    • 2. Whether the FAA's Section 1 exemption, which applies on its face only to "contracts of employment," is inapplicable to independent contractor agreements.

    Audio

    • Audio of oral argument:[6]

    Transcript

    • Read the oral argument transcript here.

    Outcome

    Decision

    Justice Neil Gorsuch delivered the opinion of the court. The court affirmed the judgment of the First Circuit and unanimously ruled that "[a] court should determine whether the Federal Arbitration Act’s Section 1 exclusion for disputes involving the 'contracts of employment' of certain transportation workers applies before ordering arbitration; here, truck driver Dominic Oliveira’s independent contractor operating agreement with New Prime Inc. falls within that exception," according to SCOTUSblog.[2]

    Opinion

    In his opinion, Gorsuch wrote,

    “ When Congress enacted the Arbitration Act in 1925, the term 'contracts of employment' referred to agreements to perform work. 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 §1’s exception, the court of appeals was correct that it lacked authority under the Act to order arbitration, and the judgment is affirmed.[8] ”

    Text of the opinion

    • Read the full opinion here.

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 Supreme Court of the United States, New Prime Inc. v. Oliveira, accessed September 18, 2018
    2. ↑ 2.0 2.1 2.2 SCOTUSblog, "New Prime Inc. v. Oliveira case file," accessed September 18, 2018
    3. ↑ U.S. Court of Appeals for the First Circuit, Oliveira v. New Prime Inc., May 12, 2017
    4. ↑ 4.0 4.1 Public Justice, "Oliveira v. New Prime Inc.," accessed September 18, 2018
    5. ↑ Oyez, "New Prime Inc. v. Oliveira," accessed September 18, 2018
    6. ↑ Supreme Court of the United States, New Prime Inc. v. Oliveira, argued October 3, 2018
    7. ↑ U.S. Supreme Court, "New Prime Inc. v. Oliveira" Opinion, January 15, 2019
    8. ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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