Convincing all of the Justices of the U.S. Supreme Court to agree on something is a challenge, but owner-operator Dominic Oliveira was able to do just that in the case New Prime, Inc. v. Oliveira, decided on January 15, 2019. (Information and Commentary about the oral argument was published in the Autumn 2018 issue of The Transportation Brief.)

At issue was whether Mr. Oliveira—who personally drove a lease-purchase truck—was exempt from the Federal Arbitration Act (FAA) because he had a “contract of employment.” The answer would determine whether Prime could invoke the FAA to enforce an arbitration agreement Mr. Oliveira had agreed to.

Prime argued Mr. Oliveira did not have a “contract of employment” because he was an independent contractor. The Court disagreed, holding that even bona fide independent contractors may have “contracts of employment,” based on the meaning of that phrase when the FAA became law in 1925.

The Court’s opinion does not foreclose arbitration with owner-operators. Arbitration agreements may be enforceable under state law even if the FAA does not apply. Now is a good time to review your arbitration agreements to determine the most effective approach going forward.