A win for the worker

The determination of an individual truck driver to see his case all the way up to the U.S. Supreme Court resulted in many trucking companies no longer being able to use the Federal Arbitration Act to avoid a class action lawsuit.

In January, the Supreme Court ruled unanimously in favor of truck driver Dominic Oliveira, saying that all transportation workers – including independent contractors – are exempt from the Federal Arbitration Act. New Prime, a trucking company based out of Springfield, Mo., attempted to use the federal statute to compel arbitration rather than face a class action lawsuit that accused the company of misclassifying employees as independent contractors and violating the Fair Labor Standards Act and the Missouri minimum wage.

Many media members and those in the trucking industry immediately hailed the ruling as a triumph for workers.

“This is a great victory for all workers in the transportation industry, including employees, legitimate independent contractors, and drivers misclassified as independent contractors who are suffering egregious wage theft,” Fred Potter, Teamsters International vice president, said in a news release. “Although we have consistently challenged employers’ attempts to compel private arbitration to avoid a public legal battle, the U.S. Supreme Court ruling makes it clear that employers cannot and should not require drivers to waive their right to their day in court through binding arbitration agreements.”

The Owner-Operator Independent Drivers Association, which filed an amicus brief to the Supreme Court in support of Oliveira, was pleased with the high court’s decision.

“For too long, motor carriers have sought to circumvent fair treatment of drivers by various clever language in their contracts,” OOIDA President Todd Spencer said. “Clearly for an owner-operator, arbitration would never be the resource because it’s specifically laid out in Congress. The leasing rules say that it’s a private right of action in the courts. In this instance, there is a broader determination that you can’t just arbitrarily say arbitration comes into play, because it doesn’t always.”

While the ruling won’t prevent arbitration in every state, Jennifer Bennett, a staff attorney at national nonprofit legal advocacy organization Public Justice and Oliveira’s attorney in the case that went to the Supreme Court, said she expects the ruling to have a large impact.

“It will be up to state law whether these arbitration contracts are enforceable,” Bennett said. “In many states, they will not be able to be enforced for various reasons. Dominic and people like him will get to band together and bring their claims in court, which means that companies will be changed to force their practices when they’re doing things like not paying their workers what the law requires or allowing sexual harassment to flourish. So I do think being able to bring claims in court will have an impact on how some of these companies operate.”

A lease agreement

In 2013, Oliveira entered New Prime’s truck driver apprenticeship program, where drivers must attend a four-day orientation and log 10,000 unpaid miles as a driver or passenger. After completing the supervised driving period, court documents said New Prime required a student driver to take the examination for a commercial driver’s license and then drive 30,000 more miles as a B2 company driver trainee. B2 drivers were paid 14 cents per mile. After finishing the program, Oliveira became an independent contractor.

According to Oliveira’s lawsuit, Success Leasing, which is a separate company from New Prime but located in the same building, leased Oliveira a truck and then directed him to New Prime’s company store to purchase fuel and equipment for about $5,000.

Oliveira said Success Leasing presented him employment paperwork labeled as a New Prime independent contractor operating agreement.

“Oliveira was not permitted to negotiate this agreement, and he ‘felt pressure’ to sign it quickly, because Prime told him it already had a load waiting for him,” Oliveira’s attorneys wrote in their response brief to the Supreme Court.

Even so, Oliveira told Land Line that he made decent money at first.

“The whole structure is set up to where they let you do good at first,” he said. “In the industry, they call it the honeymoon period. Then they start declining your loads, so you start making less if anything at all.”

According to Oliveira’s claims, New Prime paid Oliveira less than minimum wage, and deductions for fuel and lease payments on the truck occasionally left him owing money at the end of the pay period.

“Literally, there were some weeks when Dominic had to pay Prime for the privilege of driving for the company,” Bennett said.

Oliveira said that because of the independent contractor label, New Prime was taking out of his check many costs the company would usually have to pay, such as the lease for the truck, fuel, and insurance.

“It was extremely frustrating,” Oliveira said. “The paychecks were low enough that I was couch surfing. There wasn’t enough money coming in. There were points when I wanted to go back to being a mechanic.”

Oliveira eventually left New Prime and then returned as a company driver.

“My job was no different from when I was a lease driver to when I was a company driver,” Oliveira said.

In 2015, Oliveira filed a class action lawsuit against New Prime, alleging that the company violated wage laws and misclassified him, as well as others, as independent contractors. New Prime moved to force arbitration, citing an arbitration contract that all of their drivers are required to sign.

Legal challenge

Instead of agreeing to arbitration, Oliveira took the case to the U.S. Court of Appeals for the First Circuit. Oliveira’s attorneys argued that whether or not you viewed Oliveira as an employee or an independent contractor, he was exempt from the Federal Arbitration Act.

“The Federal Arbitration Act (of 1925) prohibits courts from applying the statute to the ‘contracts of employment of seamen, railroad employees or any other class of workers engaged in interstate commerce,” Oliveira’s attorneys wrote. “When the FAA passed, the ordinary meaning of these words was that the statute does not apply to transportation workers’ agreements to perform work.”

Bennett said by doing some research it was clear that the writers of the FAA meant that all transportation workers were included in the exemption.

“We looked at the law, and we looked at a bunch of the history, and we said ‘wait a minute.’ This exception for contracts of employment, what it meant at the time was just any contract to do work,” she said. “It didn’t matter if you were an employee or an independent contractor. That phrase was included to cover everyone, and there are hundreds and hundreds of examples of this.”

The First Circuit agreed, ruling that the exemption did apply to independent contractors.

Prime petitioned the Supreme Court, saying the First Circuit’s decision would deprive both companies and workers in the transportation industry of the benefits of the FAA. On Feb. 26, 2018, the Supreme Court elected to hear the case.

All the way to the Supreme Court

The Supreme Court heard oral arguments in the case on Oct. 3. However, Oliveira wasn’t in attendance.

Now working for another trucking company, Oliveira’s plan was to deliver a load and then make his way to court. But things didn’t go according to plan.

“I was held up at the receiver, and I ran out of hours only 150 miles away,” Oliveira said. “But that’s the life of a truck driver. I was kind of upset. I really wanted to go. It’s not every day you get to walk into the Supreme Court.”

Oliveira was absent, but his attorneys carried on without him as the oral arguments focused on what Congress meant when it used such terms as “contracts of employment.”

New Prime’s attorney, Theodore Boutrous Jr., said the First Circuit’s interpretation of the exemption was “contrary to the plain meaning of the statute and its structure, purpose, history and context.”

“This court, for many years going back to before when the Federal Arbitration Act was enacted, has said over and over again that if Congress uses words like ‘employment’ or ‘employee’ or ‘employer’ in a statute without further helpful definition, it intends for the common law agency rules to govern that employer and employee relationship.”

Justice Sonia Sotomayor interjected that the word “workers” was used instead of “employees.”

“Congress didn’t use the word ‘employees’ if it meant employees,” Sotomayor said. “It used a much broader term, ‘workers.’”

Boutrous argued that the intention of Congress was clear.

“I think it’s also important that it’s been nearly 100 years, and no court had ever decided that the words ‘contracts of employment,’ which are pretty clear, mean something completely different,” he said. “The First Circuit and Mr. Oliveira contend that those words mean ‘agreement to work.’ But if Congress, Justice Sotomayor, had wanted to say ‘agreement to work,’ it could have said that. It said ‘contracts of employment.’”

More than three months after oral arguments, the Supreme Court announced its decision. With newly appointed Justice Brett Kavanaugh not taking part in the case, the justices voted 8-0 in favor of Oliveira and the First Circuit’s ruling.

Justice Neil Gorsuch delivered the opinion of the court.

“When Congress enacted the Arbitration Act in 1925, the term ‘contracts of employment’ referred to agreements to perform work,” Gorsuch wrote. “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 (the) exception. The court of appeals was correct that it lacked authority under the Act to order arbitration.”

Of course, Oliveira had just finished delivering a load when he received the news.

“I was in Baltimore, and I had just finished unloading,” he said. “I was stunned when I heard the news. It was all kind of surreal.”

What now?

It has been almost six years since Oliveira signed his lease agreement with New Prime and almost four years since he filed his lawsuit, but, in many ways, his fight is just beginning.

While winning at the Supreme Court was a victory for workers’ rights, for Oliveira it only means that he will have the opportunity to receive his day in court for the wage lawsuit he filed against New Prime in 2015.

The exact timeline of the lawsuit was still unknown as of press time, but Bennett said that cases like this can take a year or more.

“So there’s still quite a ways ahead of us, but we’re really excited to finally be able to start the case,” she said.

Bennett added, however, that Oliveira deserves credit for seeing this case through to the end.

“He feels really strongly that it’s important to see change,” she said. “He was and is willing to make a whole bunch of sacrifices to make that happen. I wish I knew what gave a person that kind of faith and courage. But he saw what was going on. He got really angry about it, and really wanted to fix it not just for himself but for other people. He’s been willing to fight to make that happen even though it has a lot of personal costs for him.”

If Oliveira’s lawsuit is successful, he could stand to make a lot of money. However, he says money is not his primary concern.

“I make a real decent living right now,” he said. “I can survive off what I make, for sure. This is more about ending the practice of drivers being treated his way. The drivers think they are going to become an owner-operator, but they are really just a glorified company driver.

“It’s been a long road, and we still have a long road ahead. It’s all for the benefit of the drivers. We all love money, but, honestly, it’s more about the principle than anything.” LL