Supreme Court Extends Arbitration Exemption to All Transportation Workers Regardless of Industry (Land Line)

Supreme Court Extends Arbitration Exemption to All Transportation Workers Regardless of Industry

Monday, April 15th, 2024 Insurance Industry Legislation & Regulation Litigation

The Supreme Court has delivered a landmark unanimous decision impacting truck drivers and potentially other transportation workers, stating that their exemption from arbitration under the Federal Arbitration Act (FAA) does not depend on the industry of their employer. This ruling came from the case Bissonnette v. LePage Bakeries Parks St., where truck drivers, engaged by a baking company, contested their inclusion in compulsory arbitration over wage disputes, arguing their role as transportation workers should exempt them regardless of their employer’s primary business focus.

The core issue stemmed from a disagreement over the interpretation of the FAA, which historically exempted "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." The district court and the Second Circuit had previously ruled that because the drivers were employed by a baking company, they did not qualify for the exemption, a stance the Supreme Court has now reversed.

The ruling underscores the definition of "transportation workers" as those who play a direct and necessary role in the movement of goods across state or international borders, irrespective of their employer’s industry. This decision could influence how companies with private transportation fleets, from retail to manufacturing, handle arbitration policies with their driving personnel. An estimated 2 million truck drivers in the U.S. work for private fleets and could be affected by this ruling.

The case also echoes a previous Supreme Court decision in 2019, which reinforced the exemption for transportation workers from arbitration, emphasizing a broad interpretation of "contracts of employment" as inclusive of all agreements to perform work, thereby extending protections under the FAA.

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