New Prime Inc. v. Oliveira

Petitioner New Prime Inc. is a trucking company that employed Respondent Dominic Oliveira as an independent contractor.  Respondent’s employment agreement contained an arbitration provision that governed disputes in the employment relationship.  Respondent filed a class action against Petitioner alleging that Petitioner paid unfair wages to its independent contractors, even though they were treated as employees.  Statutorily, employers must pay employees a minimum wage.  Petitioner asked the court to compel arbitration, utilizing its authority under the Federal Arbitration Act.  Section 1 of the Act exempts compelled arbitration in “contracts of employment” to workers “engaged in . . . interstate commerce.” In turn, Petitioner argued that an arbitrator should carry out interpretation of Section 1 and that, regardless of who interprets the provision, it does not apply to their case because Respondent was not an employee.  The District Court and First Circuit agreed with Respondent.  On appeal, the Supreme Court held that a court decides Section 1’s applicability.  That is because a court must first determine applicability if it is going to compel arbitration.  Next, the Court held that the term “contracts of employment,” according to evidence presenting regarding its original public meaning, “referred to agreements to perform work.” Thus, Respondent’s contract is covered by Section 1, which does not require a court to compel arbitration.  AFFIRMED.