NEW PRIME INC. v. OLIVEIRA
No. 17-340
SUPREME COURT OF THE UNITED STATES
January 15, 2019
586 U. S. ____ (2019)
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
NOTE: Whеre it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337 (1906).
Syllabus
NEW PRIME INC. v. OLIVEIRA
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 17–340. Argued October 3, 2018—Decided January 15, 2019
Petitioner New Prime Inc. is an interstate trucking company, and respondent Dominic Oliveira is one of its drivers. Mr. Oliveira works under an operating agreement that calls him an independent contractor and contains a mandatory arbitration provision. When Mr. Oliveira filed a class action alleging that New Prime denies its drivers lawful wages, New Prime asked the court to invoke its statutory authority under the Federal Arbitration Act to compel arbitration. Mr. Oliveira countered that the court lacked authority because §1 of the Act excepts from coverage disputes involving “contracts of employment” of certain transportation workers. New Prime insisted that any question regarding §1‘s applicability belonged to the arbitrator alone to resolve, or, assuming the court could address the question, that “contracts of employment” referred only to contracts that establish an employer-employee relationship and not to contracts with independent contractors. The District Court and First Circuit agreed with Mr. Oliveira.
Held:
1. A court should determine whether a
2. Because the Act‘s term “contract of employment” refers to any agreement to perform work, Mr. Oliveira‘s agreement with New Prime falls within
(a) “[I]t‘s a ‘fundamental canon of statutory construction’ that words generally should be ‘interpreted as taking their ordinary . . . meaning . . . at the time Congress enacted the statute.‘” Wisconsin Central Ltd. v. United States, 585 U. S. ____ (2018) (quoting Perrin v. United States, 444 U. S. 37, 42 (1979)). After all, if judges could freely invest old statutory terms with new meanings, this Court would risk amending legislation outside the “single, finely wrought and exhaustively considered, procedure” the Constitution commands. INS v. Chadha, 462 U. S. 919, 951 (1983). The Court would risk, too, upsetting reliance interests by subjecting people today to different rules than they enjoyed when the statute was passed. At the time of the Act‘s adoрtion in 1925, the phrase “contract of employment” was not a term of art, and dictionaries tended to treat “employment” more or less as a synonym for “work.” Contemporaneous legal authorities provide no evidence that a “contract of employment” necessarily signaled a formal employer-employee relationship. Evidence that Congress used the term “contracts of employment” broadly can be found in its choice of the neighboring term “workers,” a term that easily embraces independent contractors. Pp. 6–10.
(b) New Prime argues that by 1925, the words “employee” and “independent contractor” had already assumed distinct meanings. But while the words “employee” аnd “employment” may share a common root and intertwined history, they also developed at different times and in at least some different ways. The evidence remains that, as dominantly understood in 1925, a “contract of employment” did not necessarily imply the existence of an employer-employee rela
857 F. 3d 7, affirmed.
GORSUCH, J., delivered the opinion of the Court, in which all other Members joined, except KAVANAUGH, J., who took no part in the consideration or decision of the case. GINSBURG, J., filed a concurring opinion.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter оf Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 17–340
NEW PRIME INC., PETITIONER v. DOMINIC OLIVEIRA
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
[January 15, 2019]
JUSTICE GORSUCH delivered the opinion of the Court.
The Federal Arbitration Act requires courts to enforce private arbitration agreements. But like most laws, this one bears its qualifications. Among other things,
I
New Prime is an interstate trucking company and Dominic Oliveira works as one of its drivers. But, at least on paper, Mr. Oliveira isn‘t an employee; the parties’ contracts label him an independent contractor. Those agree
Eventually, of course, a dispute did arise. In a class action lawsuit in federal court, Mr. Oliveira argued that New Prime denies its drivers lawful wages. The company may call its drivers independent contractors. But, Mr. Oliveira alleged, in reality New Prime treats them as employees and fails to pay the statutorily due minimum wage. In response to Mr. Oliveira‘s complaint, New Prime asked the court to invoke its statutory authority under the Act and compel arbitration according to the terms found in the parties’ agreements.
That request led to more than a little litigation of its own. Even when the parties’ contracts mandate arbitration, Mr. Oliveira observed, the Act doesn‘t always authorize a court to enter an order compelling it. In particular,
Naturally, New Prime disagreed. Given the extraоrdinary breadth of the parties’ arbitration agreement, the company insisted that any question about
Ultimately, the district court and the First Circuit sided with Mr. Oliveira. 857 F. 3d 7 (2017). The court of appeals held, first, that in disputes like this a court should resolve whether the parties’ contract falls within the Act‘s ambit or
II
In approaching the first question for ourselves, one thing becomes clear immediately. While a court‘s authority under the Arbitration Act to compel arbitration may be considerable, it isn‘t unconditional. If two parties agree to arbitrate future disputes between them and one side later seeks to evade the deal,
Instead, antecedent statutory provisions limit the scope of the court‘s powers under
Given the statute‘s terms and sequencing, we agree with the First Circuit that a court shоuld decide for itself whether
Nothing in our holding on this score should come as a surprise. We‘ve long stressed the significance of the statute‘s sequencing. In Bernhardt v. Polygraphic Co. of America, 350 U. S. 198, 201–202 (1956), we recognized that “Seсtions 1, 2, and 3 [and 4] are integral parts of a whole. . . . [Sections] 1 and 2 define the field in which Congress was legislating,” and
To be sure, New Prime resists this straightforward understanding. The company argues that an arbitrator should resolve any dispute over
But all this overlooks the necessarily antecedent statutory inquiry we‘ve just discussed. A delegation clause is merely a specialized type of arbitration agreement, and the Act “operates on this additional arbitration agreement just as it does on any other.” Id., at 70. So a court may use
III
That takes us to the second question: Did the First Circuit correctly resolve the merits of the
With that, the disputed question comes into clear view: What does the term “contracts of employment” mean? If it refers only to contracts that reflect an employer-employee relationship, then
A
In taking up this question, we bear an important сaution in mind. “[I]t‘s a ‘fundamental canon of statutory construction’ that words generally should be ‘interpreted as taking their ordinary . . . meaning . . . at the time Congress enacted the statute.‘” Wisconsin Central Ltd. v. United States, 585 U. S. ____, ____ (2018) (slip op., at 9) (quoting Perrin v. United States, 444 U. S. 37, 42 (1979)). See also Sandifer v. United States Steel Corp., 571 U. S. 220, 227 (2014). After all, if judges could freely invest old statutory terms with new meanings, we would risk amending legislation outside the “single, finely wrought and exhaustively considered, procedure” the Constitution commands. INS v. Chadha, 462 U. S. 919, 951 (1983). We would risk, too, upsetting reliance interests in the settled meaning of a statute. Cf. 2B N. Singer & J. Singer, Sutherland on Statutes and Statutory Construction §56A:3 (rev. 7th ed. 2012). Of course, statutes may sometimes refer to an external source of law and fairly warn readers that they must abide that external source of law, later amendments and modifications included. Id., §51:8 (discussing the reference cаnon). But nothing like that exists here. Nor has anyone suggested any other appropriate reason that might allow us to depart from the original meaning of the statute at hand.
That, we think, holds the key to the case. To many lawyerly ears today, the term “contracts of employment” might call to mind only agreements between employers and employees (or what the common law sometimes called masters and servants). Suggestively, at least one recently published law dictionary defines the word “employment” to mean “the relationship between master and servant.” Black‘s Law Dictionary 641 (10th ed. 2014). But this modern intuition isn‘t easily squared with evidence of the term‘s meaning at the time of the Act‘s adoption in 1925. At that time, a “contract of employment” usually meant nothing more than an agreement to perform work. As a result, most people then would have understood
What‘s the evidence to support this conclusion? It turns out that in 1925 the term “contract of employment” wasn‘t defined in any of the (many) popular or legal dictionaries
What the dictionaries suggest, legal authorities confirm. This Court‘s early 20th-century cases used the phrase “contract of employment” to describe work agreements involving independent contractors.2 Many state court cases did the same.3 So did a variety of federal statutes.4 And state stat
More confirmation yet comes from a neighboring term in the statutory text. Recall that the Act excludes from its coverage “contracts of employment of . . . any . . . class of workers engaged in foreign or interstate commerce.”
B
What does New Prime have to say about the case building against it? Mainly, it seeks to shift the debate from the term “contracts of employment” to the word “employee.” Today, the company emphasizes, the law often distinguishes between employees and independent contractors. Employees are generally understood as those who work “in the service of another person (the employer) under an express or implied contract of hire, under which the employer has the right to control the details of work performance.” Black‘s Law Dictionary, at 639. Meanwhile, independent contractors are sometimes described as those “entrusted to undertake a specific project but who [are] left free to do the assigned work and to choose the method for accomplishing it.” Id., at 888. New Prime argues that, by 1925, the words “employee” and “independent contractor” had already assumed these distinct meanings.6 And given that, the company contends, the phrase “contracts of employment” should be understood to refer only to relationships between employers and employees.
Unsurprisingly, Mr. Oliveira disagrees. He replies that, while the term “employment” dates back many centuries, the word “employee” only made its first appearance in English in the 1800s. See Oxford English Dictionary (3d ed., Mar. 2014), www.oed.com/view/Entry/61374 (all In-
Still, the parties do share some common ground. They agree that the word “employee” eventually came into wide circulation and came to denote those who work for a wage at the direction of another. They agree, too, that all this came to pass in part because the word “employee” didn‘t suffer from the same “historical baggagе” of the older common law term “servant,” and because it proved useful when drafting legislation to regulate burgeoning industries and their labor forces in the early 20th century.7 The parties even agree that the development of the term “employee” may have come to influence and narrow our understanding of the word “employment” in comparatively recent years and may be why today it might signify to some a “relationship between master and servant.”8
When New Prime finally turns its attention to the term in dispute, it directs us to Coppage v. Kansas, 236 U. S. 1, 13 (1915). There and in other cases like it, New Prime notes, courts sometimes used the phrase “contracts of employment” to describe what today we‘d recognize as agreements between employers and employees. But this proves little. No one doubts that employer-employee agreements to perform work qualified as “contracts of employment” in 1925—and documenting that fact does nothing to negate the possibility that “contracts of employment” also embraced agreements by independent contractors to perform work. Coming a bit closer to the mark, New Prime eventually cites a handful of early 20th-century legal materials that seem to use the term “contracts of employment” to refer exclusively to employer-employee agreements.9 But from the record amassed
New Prime‘s effort to explain away the statute‘s suggestive use of the term “worker” proves no more compelling. The company reminds us that the statute excludes “contracts of employment” for “seamen” and “railroad employees” as well as other transportation workers. And because “seamen” and “railroad employees” included only employees in 1925, the company reasons, we should understand “any other class of workers engaged in . . . interstate commerce” to bear a similar construction. But this argument rests on a precarious premise. At the time of the Act‘s passage, shipboard surgeons who tended injured sailors were considered “seamen” though they likely served in an independent contractor capacity.10 Even the term “railroad employees” may have swept more broadly at the time of the Act‘s passage than might seem obvious today. In 1922, for example, the Railroad Labor Board interpreted the word “employee” in the Transportation Act of 1920 to refer to anyone “engaged in the customary work directly contributory to the operation of the railroads.”11 And the Erdman Act, a statute enacted to address disruptive railroad strikes at the end of the 19th century, seems to evince an equally broad understanding of “railroad
Unable to squeeze more from the statute‘s text, New Prime is left to appeal to its policy. This Court has said that Congress adopted the Arbitration Act in an effort to counteract judicial hostility to arbitration and establish “a liberal federal policy favoring arbitration agreements.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24 (1983). To abide that policy, New Prime suggests, we must order arbitration according to the terms of the parties’ agreement. But often and by design it is “hard-fought compromise[],” not cold logic, that supplies the solvent needed for a bill to survive the legislative process. Board of Governors, FRS v. Dimension Financial Corp., 474 U. S. 361, 374 (1986). If courts felt free to pave over bumpy statutory texts in the name of more expeditiously advancing a policy goal, we would risk failing to “tak[e] account of” legislative compromises essential to a law‘s passage and, in that way, thwart rather than honor “the effеctuation of congressional intent.” Ibid. By respecting the qualifications of
Finally, and stretching in a different direction entirely, New Prime invites us to look beyond the Act. Even if the statute doesn‘t supply judges with the power to compel arbitration in this case, the company says we should order it anyway because courts always enjoy the inherent au-
*
When Congress enacted the Arbitration Act in 1925, the term “contracts of employment” referred to agreements to perform work. No less than those who came before him, Mr. Oliveira is entitled to the benefit of that same understanding today. Accordingly, his agreement with New Prime falls within
Affirmed.
JUSTICE KAVANAUGH took no part in the consideration or decision of this case.
“[W]ords generally should be ‘interpreted as taking their ordinary . . . meaning . . . at the time Congress enacted the statute.‘” Ante, at 6 (quoting Wisconsin Central Ltd. v. United States, 585 U. S. ____, ____ (2018) (slip op., at 9)). The Court so reаffirms, and I agree. Looking to the period of enactment to gauge statutory meaning ordinarily fosters fidelity to the “regime . . . Congress established.” MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 234 (1994).
Congress, however, may design legislation to govern changing times and circumstances. See, e.g., Kimble v. Marvel Entertainment, LLC, 576 U. S. ____, ____ (2015) (slip op., at 14) (“Congress . . . intended [the Sherman Antitrust Act‘s] reference to ‘restraint of trade’ to have ‘changing content,’ and authorized courts to oversee the term‘s ‘dynamic potential.‘” (quoting Business Electronics Corp. v. Sharp Electronics Corp., 485 U. S. 717, 731–732 (1988))); SEC v. Zandford, 535 U. S. 813, 819 (2002) (In enacting the Securities Exchange Act, “Congress sought to substitute a philosophy of full disclosure for the philosophy of caveat emptor . . . . Consequently, . . . the statute should be construed not technically and restrictively, but flexibly to effectuate its remedial purposes.” (internal quotation marks and paragraph break omitted)); H. J. Inc. v. Northwestern Bell Telephone Co., 492 U. S. 229, 243 (1989) (“The limits of the relationship and continuity concepts that combine to define a [Racketeer Influenced and Corrupt Organizations] pattern . . . cannot be fixed in advance with such clarity that it will always be apparent whether in a particular case a ‘pattern of racketeering activity’ exists. The development of these concepts must await future cases . . . .“). As these illustrations suggest, sometimes, “[w]ords in statutes can enlarge or contract their scope as other changes, in law or in the world, require their application to new instances or make old applications anachronistic.” West v. Gibson, 527 U. S. 212, 218 (1999).