The Supreme Court Just Handed a Big, Unanimous Victory to Workers. Wait, What?
On Tuesday, the Supreme Court handed a victory to American workers, ruling unanimously that independent contractors who work in transportation may not be forced into mandatory arbitration. (Justice Brett Kavanaugh, who joined the bench after argument, did not participate.) The decision is a remarkable win for labor rights from a court that typically favors corporate interests over working people. And it will allow hundreds of thousands of contractors to vindicate their rights in court, collectively, rather than in costly and unjust arbitration.
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.
Tuesday’s decision marks the triumph of the Gorsuch brief—a highly technical argument designed to nab the justice’s vote by fixating on the text of a statute and its meaning at the time of passage. Gorsuch appears to draw heavily from two sources: the brief by Public Justice, which represents Oliveira, and an amicus brief filed by the Constitutional Accountability Center, a progressive originalist law firm. These briefs dwell on the dictionaries that Gorsuch cites and even dive into the etymology of the word employment, from its Latin roots to its evolution through French and Anglo-Norman usage in the Middle Ages.
Together, Public Justice and the Constitutional Accountability Center provided enough arcane evidence to satisfy Gorsuch that, in 1925, the word employment did not distinguish between employers and contractors. The justice’s preoccupation with 1925 linguistics is so extreme that it spurred Justice Ruth Bader Ginsburg to write a brief concurrence noting that Congress can “design legislation to govern changing times and circumstances,” using words whose meaning may “enlarge or contract [in] scope” as society progresses. Ginsburg is likely laying the groundwork for upcoming disputes—most obviously, the question of whether the phrase discrimination because of sex should be read to protect LGBTQ employees.
But those fights can wait for another day, and Gorsuch deserves credit for following his textualist principles to a liberal outcome in New Prime. Thanks to his decision, hundreds of thousands of contractors in the transportation industry may now have their day in court and join together to pursue their claims collectively. That, of course, is a right that every American worker deserves, and it is a shame that SCOTUS has warped the FAA to deny it to them. Still, New Prime is a considerable success for labor rights at a time when corporate interests dominate the Supreme Court. Armed with old dictionaries and common sense, progressive attorneys scored the biggest blow against mandatory arbitration in years.