Contrary to the trend, the United States Supreme Court recently ruled that the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1, et seq., does not make mandatory arbitration agreements in the trucking industry enforceable. In that case, New Prime, Inc. v. Oliveira, the Supreme Court decided whether the contract between the plaintiff, Dominic Oliveira, and the defendant, New Prime, was a contract of employment under the FAA given the contract described the plaintiff as an “independent contractor.” The Supreme Court rejected the defendant’s argument in the case, concluding that the FAA’s exclusion of “contracts of employment” covers independent contractors as well as employees engaged in interstate commerce.
At face value, employees and employee counsel should welcome the ruling in New Prime. The way that the Supreme Court majority reached its decision, however, could mean trouble for future enforcement of protections under employment law and civil rights statutes – whether through class actions, collective actions, or individual cases. An incisive analysis of the New Prime ruling observed that the majority opinion based the ruling on what “contracts of employment” supposedly meant in 1925 – that is, when Congress enacted the FAA. This rigid “originalist” approach to interpreting the law conflicts with the landmark decision in a sex harassment case authored by the original “originalist,” Justice Antonin Scalia. In that case, Oncale v. Sundowner Offshore Services, Inc., Justice Scalia rejected a rigid “originalist” approach because “statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils.”
The future possible trouble created by New Prime includes the potential for prompting some courts to conclude that “sex” did not encompass either sexual orientation or gender identity in 1964 – that is, when Congress enacted Title VII, 42 U.S.C. §§ 2000e, et seq. If courts were to so conclude, gay, lesbian, bisexual, and transgender people would not have Federal civil rights protections in the workplace. Consequently, New Prime calls to mind the Supreme Court’s decision upholding the legality of the Patient Protection and Affordable Care Act, 26 U.S.C. §§ 5000A, et seq., often known as Obamacare. Although the ruling in National Federation of Independent Business v. Sebelius undoubtedly continues to benefit millions by increasing access to life-saving healthcare coverage, the majority opinion in that case questioned the validity of basing laws on the Commerce Clause of the United States Constitution. The Commerce Clause provides the basis for nearly all employment law and civil rights statutes, so attacking the validity of the Commerce Clause as a basis for law-making would undermine the validity of virtually all laws that govern the workplace. Plaintiff counsel must remain vigilant to help ensure that such an unjust interpretation of the law never wins the day.