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Transportation Brief: Circuit Courts Grapple with the “Transportation Worker” Exemption

by Braden K. Core, Prasad Sharma, Ryan W. Wright

August 6, 2020

The Supreme Court’s holding in New Prime—that operating agreements with bona fide independent contractors can fall within the “trans­portation worker” exemption to the Federal Arbitration Act (FAA)-- has not been the death knell for the transportation industry’s efforts to enforce arbitration agreements under the FAA. Instead, the fight has moved to another element of the exemption, namely, whether the individual belongs to a class of workers engaged in interstate commerce. The First Circuit was the first federal appellate court to rule on this topic and held that local delivery drivers who transport goods moving in interstate commerce are exempt, even if they do not cross state lines. But the First Circuit also made clear that courts should look to see whether arbitration is available under state law. Another unsettled question is whether the focus is on the worker bringing claims, or the general class of workers to which the individual belongs. The Ninth and Seventh Circuits heard oral arguments in cases raising similar questions within a week of the First Circuit, so additional decisions are expected soon. The briefing is pending in a similar case before the Eleventh Circuit. Given the possibility of a “circuit split,” we may see another transportation arbitration case on the Supreme Court’s docket in the next year or two.


Scopelitis’ Transportation Brief® is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
 
 
 
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