January 15, 2019

DANG THAT LIBERAL 9TH CIRCUIT:

The Supreme Court Just Handed a Big, Unanimous Victory to Workers. Wait, What?   (MARK JOSEPH STERN, JAN 15, 2019, Slate)

Tuesday's case, New Prime v. Oliveira, involves a dispute between a trucking company (New Prime) and one of its drivers, Dominic Oliveira. When he began work, Oliveira was required to complete 10,000 miles hauling freight for New Prime--for free, as an "apprentice." He was then compelled to complete another 30,000 miles as a "trainee," for which he was paid about $4 an hour. Once he became a full-fledged driver, Oliveira was designated as a contractor rather than an employee. He was forced to lease his own truck (from a company owned by the owners of New Prime), buy his own equipment (from the New Prime store), and pay for his own gas, often from New Prime gas pumps.

Typically, New Prime would have to pay all these expenses. But because it classified Oliveira as a contractor, it deducted the costs from his paycheck. Sometimes, that paycheck wound up negative due to these deductions, meaning New Prime essentially charged Oliveira to work for the company.

In 2015, Oliveira filed a class-action lawsuit on behalf of himself and tens of thousands of other "contractors." He alleged that New Prime had misclassified him as a contractor to underpay him, a violation of federal labor law. But Oliveira's contract with the company declared that all disputes must be resolved through individual arbitration, a process that is costly, time-consuming, and often unjust, favoring employers over workers. New Prime asserted that, under the Federal Arbitration Act, courts must enforce this "agreement" and dismiss Oliveira's claims. That's no surprise: In recent years, SCOTUS has repeatedly used the FAA to crush labor lawsuits, deploying the 1925 law to throw class actions and labor disputes out of court.

But New Prime had a problem. The FAA generally obligates courts to enforce arbitration clauses. But it expressly excludes "contracts of employment of ... workers engaged in ... interstate commerce," such as "seamen" and "railroad employees." Everyone agrees that truckers qualify for this exception. New Prime, however, asserted that truckers who work as contractors do not have "contracts of employment" and thus do not qualify. And by classifying so many workers as contractors, the company believed it had worked around the FAA's exemption.

Not so, Justice Neil Gorsuch wrote for the court on Tuesday. We may see a formal distinction between "employment" and contractor work today. But when Congress passed the FAA in 1925, Gorsuch explained, "Dictionaries tended to treat 'employment' more or less as a synonym for 'work.' " Indeed, "all work was treated as employment," whether or not "a formal employer-employee or master-servant relationship" existed. Citing six dictionaries from the era, as well as contemporaneous statutes and rulings, Gorsuch concluded that "contract of employment" was understood to encompass "work agreements involving independent contractors." As a result, Oliveira, along with other truckers and transportation contractors, qualify for the FAA's exemption. His class-action lawsuit may proceed in court.

Posted by at January 15, 2019 5:24 PM

  

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