Oliveira v. New Prime, Inc.
857 F.3d 7
| 1st Cir. | 2017Background
- New Prime runs an interstate trucking apprenticeship; Oliveira participated, formed Hallmark LLC, and signed an Independent Contractor Operating Agreement with an arbitration clause (incorporating AAA rules).
- Oliveira alleges Prime exercised employee-like control and failed to pay minimum wages; he sued under the FLSA and state wage laws and brought class and contract claims.
- Prime moved to compel arbitration under the FAA §4, arguing (1) Oliveira/Hallmark agreed to delegate arbitrability to the arbitrator and (2) §1 FAA exemption (contracts of employment of transportation workers) does not cover independent-contractor agreements.
- Oliveira argued he was not personally bound by the Prime–Hallmark contract and that §1 exempts the contract from the FAA; he also argued the court (not the arbitrator) must decide §1’s applicability.
- The district court denied the motion to compel without prejudice, ordered discovery on employment status, and concluded the court must decide whether §1 applies before compelling arbitration under the FAA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides whether §1 FAA exemption applies (court or arbitrator)? | Oliveira: court must decide applicability of §1 before compelling arbitration under FAA. | Prime: delegation clause and AAA rules mean arbitrator decides §1 applicability as a question of arbitrability. | Court: The district court must decide §1 applicability as an antecedent question of the court's authority under the FAA, not a question for the arbitrator. |
| Whether §1 exemption covers transportation-worker agreements that establish/purport independent-contractor status | Oliveira: “contracts of employment” means agreements to perform work, including independent-contractor transportation agreements — thus §1 exempts them from FAA. | Prime: §1 does not extend to independent-contractor agreements; only employer-employee contracts are covered; narrow construction of §1 and pro-arbitration policy support excluding independent contractors. | Court: §1’s phrase “contracts of employment” should be given its ordinary 1925 meaning — agreements to do work — and includes transportation-worker independent-contractor agreements; such agreements fall outside the FAA. |
Key Cases Cited
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (interprets §1 to exempt only contracts of employment of transportation workers)
- In re Van Dusen, 654 F.3d 838 (9th Cir. 2011) (district court must decide whether §1 exemption applies before compelling arbitration under the FAA)
- Green v. SuperShuttle Int'l, Inc., 653 F.3d 766 (8th Cir. 2011) (held arbitrator could decide §1 applicability where parties delegated arbitrability)
- Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63 (2010) (parties may delegate gateway arbitrability questions to arbitrators; general principles on delegation)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (federal policy favoring arbitration and overview of FAA enforcement)