Access to Justice

New Prime, Inc. v. Oliveira

In New Prime, Inc. v. Oliveira, the Supreme Court considered whether companies can use the Federal Arbitration Act to block truck drivers and other transportation workers who work for them from seeking redress in court for the companies’ illegal behavior, simply by classifying those workers as independent contractors.

In Brief

Dominic Oliveira worked as a long-haul truck driver for a national trucking company, New Prime, Inc., which he says routinely failed to pay him and other drivers the minimum wage to which they were entitled under law. Oliveira filed a class-action lawsuit seeking to hold New Prime accountable.
New Prime invoked the Federal Arbitration Act (FAA), to force Oliveira to arbitrate his claim, but the FAA does not apply to “contracts of employment” of transportation workers. New Prime, however, claimed that Oliveira was an independent contractor & that that language did not apply.
When Congress enacted the FAA, the term “contract of employment” covered any agreement to perform work in exchange for payment. Thus, all transportation workers, not only company employees, are exempt from the FAA. Oliveira’s case should be allowed to proceed.

Case Summary

Dominic Oliveira worked as a long-haul truck driver for a national trucking company, New Prime, Inc., which he alleges routinely failed to pay him and other drivers the minimum wage to which they were entitled under federal and state law. When Oliveira filed a class-action lawsuit seeking to hold New Prime accountable for this misconduct, the company responded by asking the court to block the suit and enforce an arbitration agreement that it had required Oliveira to sign as part of his employment paperwork. In support of its request, New Prime invoked the Federal Arbitration Act (FAA), which generally requires courts to enforce agreements to arbitrate disputes. The FAA, however, says that it does not apply to any “contracts of employment” of transportation workers like Oliveira. Nevertheless, New Prime claimed that this exemption did not apply to Oliveira because he was classified as an independent contractor. The U.S. Court of Appeals for the First Circuit rejected this argument, and New Prime successfully petitioned the U.S. Supreme Court to review that decision.

CAC filed a friend-of-the-court brief supporting Oliveira in the Supreme Court. Our brief explains that when Congress enacted the FAA in 1925, the term “contract of employment” covered any agreement to perform work in exchange for payment, whether the party doing the work served as an independent contractor or as a company employee. As we explain, the word “employment” had different connotations nearly a century ago than it does now, both in common parlance and in legal settings. Today, that word tends to suggest a specific type of ongoing legal relationship between “employees” and the “employers” who supervise them and pay their wages or salaries, but in 1925 things were different. “Employment” simply meant performing work in exchange for payment—regardless of whether the worker functioned independently and was paid for the completion of a task (like an independent contractor) or was closely supervised and paid an hourly wage or salary (like a modern-day “employee”). Our brief makes this point by closely analyzing how the meanings and uses of these words have changed over time, in tandem with changes in the American economy. Thus, when Congress exempted transportation workers’ “contracts of employment” from the FAA, Congress meant to shield all transportation workers, not only those classified as company employees, and therefore Oliveira’s case should be allowed to proceed.

In a unanimous decision, the Court agreed, holding that “contract of employment” in the FAA refers to any agreement to perform work, including Oliveira’s work as an independent contractor. Echoing our brief and drawing on the historical sources we cited, Justice Neil Gorsuch discussed the meanings of the words “employment” and “employee” when the statute was enacted and how they differed from the words’ modern connotations. Based on that analysis, the Court concluded that “all work was treated as employment” in the FAA, and so the statute imposes no barrier preventing workers like Oliveira from seeking redress in court.

Case Timeline

  • July 25, 2018

    CAC files amicus brief

    U.S. Sup. Ct. Amicus Brief
  • October 3, 2018

    The Court hears oral arguments

  • January 15, 2019

    The Court issues its decision

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