The U.S. Supreme Court has agreed to decide a case that could bolster or weaken the legal status of independent contractors.
It involves the temperature-controlled carrier New Prime Inc., which does business as Prime – its trailers bearing that name are a familiar sight on the nation’s highways.
A Prime driver sued the company, claiming it had been miscalssified him as an owner-operator independent contractor. He worked in that capacity for Prime until he quit, later rejoining the company as a salaried company driver. He asserted that his job duties as an owner-operator and as a company driver at Prime were “substantially identical.”
The driver asserts that he was an employee in both situations, and should be compensated for the difference between minimum wage and what he was paid as an owner-operator, and for his training as part of the company’s apprentice program.
In recent years, class action litigation inspired by the Teamsters union has sought to end the independent status of owner-operator drivers.
Contracts between companies and their owner-operators often include an arbitration clause. But when drivers file legal challenges, it leads to disputes over whether an arbitrator or a court should hear the complaint.
The Supreme Court will decide whether arbitration clauses in driver contracts are allowed or exlcuded under Section I of the Federal Arbitration Act.
The act exlcudes from arbitration “contracts of employment of seamen, railroad employees, or another class of workers engaged in foreign or interstate commerce.” Lower courts have been divided over whether this includes truck drivers.
The Supreme Court will now finally resolve who decides the FAA exemption and Section 1’s coverage of independent contractors.