Supreme Court to Consider the “Transportation Worker” Exemption from the Federal Arbitration Act

- The U.S. Supreme Court agreed to hear an appeal by motor carrier New Prime, Inc. challenging a decision by the U.S. Court of Appeals for the First Circuit that found the company’s owner-operators worked under “contracts of employment.” This holding meant that the owner-operators were exempt from the Federal Arbitration Act, and that the carrier therefore could not require the owner-operators to arbitrate their claims alleging violations of the Fair Labor Standards Act and state law.

The Supreme Court’s decision to consider the case could have far-reaching implications for the ability of transportation companies to enforce arbitration agreements with owner-operators. New Prime and cases like it underscore the need for transportation companies to look closely at state law as an alternative means of compelling arbitration of disputes with owner-operators.

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