The U.S. Supreme Court has ruled that owner-operators who work for larger carriers cannot be forced to settle disputes through arbitration. This will allow more drivers the leverage they need to insist on decent pay, proper benefits, and equal protection under the law. It will also likely open up large carriers to class-action lawsuits from owner-operators who feel they haven’t been afforded those things.
Back in 2015, a class action lawsuit was brought against New Prime Inc. (Prime) by one of its owner-operators. The driver, Dominic Oliveira, claimed that he and his fellow owner-operators were being misclassified as independent contractors, and therefore were missing out on pay and benefits required by law for employees.
Like all of Prime’s O-Os Oliveira had signed a forced arbitration agreement, so Prime claimed that he wasn’t actually allowed to sue them at all. So, before the class action suit could be decided, a new case would need to be argued.
Basically, the lawsuit boiled down to whether or not the 1926 Federal Arbitration Act applied to independent contractors (and therefore owner-operators) or not. Because the phrase “contracts of employment” was deemed to include an independent contractor agreement, and the word “worker” was deemed to include not just employees but also independent contractors, the Supreme Court ruled unanimously that owner-operators could not be bound by forced arbitration agreements.
Forced arbitration is frequently used by large companies to prevent costly lawsuits by their workers. In worst-case scenarios, this can mean companies break the law because the potential downside of mistreating workers is an acceptable risk when compared to the definite upside of increased profits.
Now that owner-operators aren’t bound by forced arbitration agreements, they will be free to pursue lawsuits against offending carriers. And since class action suits are mostly an issue for megacarriers, those are the companies most likely to be hit with lawsuits.
The American Trucking Association told Heavy Duty Trucking that they are “disappointed” in the decision. They claim that the ruling “will make it harder for motor carriers and independent owner-operators alike to rely on agreements to resolve their disputes through arbitration.” In reality, owner-operators are still free to use arbitration for disagreements, they just can no longer be forced to do so by federal law.
Driver advocates on the other hand were encouraged by the decision. They claim that the ruling will be a good thing not only for O-Os, but also company drivers, misclassified drivers, and the transportation industry in general.
Now that this issue has been settled, Oliveira’s case against Prime can move forward.
“Today’s ruling is a huge step forward for truck drivers,” reads a statement put out by Public Justice, the law firm representing Oliveira. “This decision will enable so many drivers like Dominic who are not being paid what the law requires to go to court and fight for their rights.”