SCT Holds Independent Contractors "Workers" Under Federal Arbitration Act

The Supreme Court unanimously today held that independent contractors are "workers" within the meaning of the Federal Arbitration Act and thus typically not covered by that Act when agreeing to arbitrate, but rather covered by state law.

Oliveira was a truck driver for Prime under a contract calling him an independent contractor and containing an arbitration clause. Oliveira filed a class action alleging underpayment of wages. Prime moved to compel arbitration under the FAA. But Oliveira persuaded the Supreme Court that as an independent contractor he was covered by the FAA Section 1 exclusion of "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

Employment arbitration expert Professor Rick Bales explains further.