SCOTUS - Second Unanimous Arbitration Opinion

This month, the Supreme Court of the United States handed down its second unanimous opinion on arbitration. In New Prime Inc. v. Oliveira, which arose out of an employment dispute between a trucking company and driver, the Court found while the Federal Arbitration Act (FAA) authorizes a court to compel arbitration if parties agreed to arbitrate, the statute also defines the agreements to which it applies. Before a court enforces an agreement to arbitrate, it must first ensure the agreement is one the FAA authorizes courts to enforce. Specifically at issue was whether an exception to the rule in the FAA that obligates courts to enforce arbitration agreements that involve interstate commerce applied. Section I of the FAA exempts contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce from arbitration. The opinion explains while a private agreement may be crystal clear and require arbitration of every question under the sun, that does not necessarily mean the FAA authorizes courts to stay litigation and send the parties to an arbitral forum. In this instance, companies engaged in interstate or foreign transportation should take notice that a trucker’s status as an independent contractor no longer protects the company’s arbitration agreement with him or her under the FAA. Interestingly, despite a conservative majority, the justices chose to interpret the FAA in a way that likely expands worker’s rights. Justice Gorsuch, who authored the opinion, did not deny the vigor of the court’s embrace of a liberal federal policy favoring arbitration agreements. However, in this case, the text seemed clear enough to persuade all of the justices to reject the claim for arbitration. See commentaries here-- https://bit.ly/2Gdqhb2 and https://bit.ly/2CvAxro and opinion here-- https://bit.ly/2CyEpbd