Supreme Court Rules In Favor of Truckers in Employment Arbitration Dispute

By on January 15, 2019

The Supreme Court handed truckers a big victory today by ruling that arbitration clauses in employment agreements with truckers that cross state lines are not enforceable under the Federal Arbitration Act.  The Federal Arbitration Act has long been used by companies to force individuals into arbitration instead of allowing them to proceed in court.

Typically combined with class action waiver clauses, arbitration clauses tilt the odds in favor of the companies and against individuals, make it more difficult to find high quality legal representation, and disallow the pooling of resources and stronger bargaining positions afforded by class actions.

Although state law limits the availability of arbitration in certain circumstances,  these state safeguards had been preempted by the Federal Arbitration Act. The Supreme Court decision, in a case brought by a truck driver against New Prime, Inc., held that the Federal Arbitration Act’s exception for transportation employees engaged in interstate commerce applied to independent contractors, rejecting Prime’s argument that it only applied to employees of Prime.

This ruling empowers truck drivers by allowing them (if the arbitration clause at issue is not enforceable pursuant to state law) to have their dispute decided in open court, instead of a private dispute resolution forum chosen by the employer.