Trucker earns employment win for independent contractors | Katz Melinger PLLC
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Trucker earns employment win for independent contractors

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An independent California trucker recently took his right to have a wage dispute settled by the court system all the way to the U.S. Supreme Court -- and won in an 8-0 decision.

Trucking company wanted to force arbitration

Dominic Oliveira had been wrongfully compelled to enter into a binding arbitration agreement with New Prime Trucking, the Supreme Court held. Oliveira's challenge hinged on whether an exemption in the Federal Arbitration Act applied.

While the case itself involves a technical legal issue, the results will have practical effects for truckers and other transportation workers. Independent contractor drivers, and others in the transportation industry, will not be forced into arbitration when they have a wage and hour complaint.

This is important because arbitration typically awards less damages to employees, meaning employers have to pay less for wage and hour violations. That is why companies have fought for - and largely won - the right to force arbitration for wage disputes.

Independent contracting common in transportation industry

Major corporations and organizations routinely hire self-employed, independent contractors such as Oliveira to perform niche duties. Nowhere is this trend more evident than in transportation, with many truckers self-employed. Outsourcing work allows companies to get needed work completed without incurring expenses such as payroll taxes, health insurance benefits and the cost of supervision, among others. But locking independent transportation workers into arbitration agreements without the possibility of appeal did not sit well with the U.S. Supreme Court.

A unanimous decision

The unanimous decision by the high court upholds a 1st Circuit Court ruling. Labor organizations and employee rights groups are calling the decision a significant victory for American workers.

"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," a joint statement issued by Justice for Port Drivers and the International Brotherhood of Teamsters union stated, calling the ruling "a great victory for all workers in the transportation industry."

Independent contractors who have signed arbitration agreements can speak to legal counsel to discuss the possibility of a traditional lawsuit regarding wage and hour violations.

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