Federal Arbitration as an Alternative to Litigation Does Not Apply to Transportation Workers

Red freight train with grain elevators and storage bins on the prairie. Dramatic sky with lots of copy space. (Please see my portfolio for related photos and video clips).Last week, employees received a rare victory that punches a sizable hole in previous laws that supported allowing arbitration in place of litigation. Recently, a unanimous Supreme Court determined that the regulation does not apply to those who work in transportation. For the last decade, employers have basked in victories as the U.S. Supreme Court bolstered arbitration (via agreement) as an alternative to litigation.  Arbitration has been particularly helpful to avoid class-action lawsuits.  Just last year, the Supreme Court held that agreements under the Federal Arbitration Act (FAA) can be utilized to waive employees’ rights to bring or participate in class actions.

 

Because the FAA excludes “contracts of employment of sea­men, railroad employees, or any other [like] class of workers engaged in foreign or interstate commerce,” the Supreme Court held Congress excluded transportation workers as well.  As a result, transportation workers cannot be barred from filing or engaging in class actions via the FAA.  An important clarification is that the Supreme Court also determined it makes no difference whether the individual at issue is an employee or independent contractor.  Anyone who “works” in transportation is employed in transportation.

 

The result of this decision?  There will likely be much litigation over what is considered a “transportation” worker under the FAA as workers try to bring class actions and avoid arbitration by claiming to be transportation workers (now deemed exempt from the FAA and class-action waivers under the FAA).  Potential candidates for “transportation worker” disputes will be (a) workers whose jobs include frequent travel as a regular part of their responsibilities; and (b) anyone working for a business that primarily engages in transporting goods or services – regardless of his or her specific job.

Barry Freeman is an employment attorney with more than 25 years of experience with employment-related disputes. He practices in the Cleveland and Akron offices of Buckingham Doolittle & Burroughs, LLC in the Employment and Labor practice group. Barry represents clients in litigation and provides day-to day counseling, strategic advice and compliance guidance.

 

About Buckingham, Doolittle & Burroughs:

Buckingham is a corporate law firm that counsels Middle Market executives and business leaders all over Ohio and beyond. With offices in Canton, Akron, and Cleveland, Buckingham offers clients Business Law Reimagined through sophisticated and practical legal services. Serving the region for over 100 years with nearly 70 attorneys, Buckingham’s mission is to deliver meaningful experiences through the practice of law, exceed expectations in terms of service, counsel and business sense, and to offer continuous value to the industries, communities and clients they serve. See all of our news and updates by visiting our website.

Share