In recent years, the U.S. Supreme Court has favored the interests of businesses over their employees in matters related to the employer-employee relationship. That trend seemed poised to continue.
For this reason, it was somewhat of a stunning and welcome surprise to workers’ advocates when the Court, with an opinion by Justice Neil Gorsuch, recently handed a decisive victory to workers facing mandatory arbitration requirements.
The Supreme Court, in New Prime v. Oliveira, delivered a significant win for American workers. The Court ruled unanimously 8-0 that independent contractors who work in the transportation industry may not be compelled to enter mandatory arbitration. (Justice Brett Kavanaugh joined the Court after case arguments, and thus did not participate.) The decision gives power to hundreds of thousands of contractors to exercise collective litigation in the assertion of their rights, rather than through unjust and expensive arbitration.
You load sixteen tons; what do you get?
New Prime, a trucking company, assigned driver Dominic Oliveira the task of completing 10,000 miles hauling freight as an “apprentice driver,” which meant working for free. After he completed that requirement, the company then compelled him to fulfill an additional 30,000 miles as a “trainee.” Under that designation, he was compensated about $4 per hour.
Once Oliveira fulfilled the above-stated requirements and became a legitimate driver for the company, he was given contractor status, not employee status. Additionally, Oliveira was required to:
- Lease the truck he drove for the job – the lease was provided by a company under the ownership of the New Prime owners
- Pay for his own gas, quite often from gas pumps owned by New Prime
- Purchase equipment out of his own pocket from the New Prime store
While New Prime would typically cover these costs, it used the independent contractor designation it gave to Oliveira as a reason to subtract those expenses from his paycheck. As a result, sometimes his compensation was wiped out completely by these deductions.
In this case, the attorneys representing Oliveira successfully argued an exemption present in the 1925 Federal Arbitration Act (FAA) – the article of federal law which governs the entire issue. The exemption specifically applies to workers engaged in interstate commerce who have “contracts of employment.” The key to linking this exemption to the present-day case was the understanding that in 1925 “contracts of employment” did not exclude individuals who today are referred to as independent contractors.
How the Court was persuaded to align with transportation contractors
Through evidence provided by Public Justice and the Constitutional Accountability Center, the Court was persuaded that the word “employment” in 1925 was not intended to distinguish between “employers” and “contractors.” Justice Gorsuch, a noted textualist, examined and referred to the linguistics and word definitions in his opinion. This decision provided Mr. Oliveira, along with hundreds of thousands of contractors in the transportation industry, the opportunity to pursue their legal claims on a class-action basis and have their fair day in court.
Has a company you have provided services for misclassified you as an independent contractor, and consequently prevented you from accessing the protections available under FLSA and state laws? If so, a Tennessee wage and hour lawyer from our team at the Gilbert Firm is here to discuss and evaluate your complaint. To schedule a free, no-obligation case review with Clint Scott or a member of our team, call us today at 888.996.9731 or complete our contact form. We serve clients from our offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville, and throughout Tennessee.
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