October 3, 2018
WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FIRST CIRCUIT
New Prime Inc. is an interstate trucking company, and
respondent Dominic Oliveira is one of its drivers. Mr.
Oliveira works under an operating agreement that calls him an
independent contractor and contains a mandatory arbitration
provision. When Mr. Oliveira filed a class action alleging
that New Prime denies its drivers lawful wages, New Prime
asked the court to invoke its statutory authority under the
Federal Arbitration Act to compel arbitration. Mr. Oliveira
countered that the court lacked authority because §1 of
the Act excepts from coverage disputes involving
"contracts of employment" of certain transportation
workers. New Prime insisted that any question regarding
§l's applicability belonged to the arbitrator alone
to resolve, or, assuming the court could address the
question, that "contracts of employment" referred
only to contracts that establish an employer-employee
relationship and not to contracts with independent
contractors. The District Court and First Circuit agreed with
1. A court should determine whether a §1 exclusion
applies before ordering arbitration. A court's authority
to compel arbitration under the Act does not extend to all
private contracts, no matter how emphatically they may
express a preference for arbitration. Instead, antecedent
statutory provisions limit the scope of a court's
§§3 and 4 powers to stay litigation and compel
arbitration "accord[ing to] the terms" of the
parties' agreement. Section 2 provides that the Act
applies only when the agreement is set forth as "a
written provision in any maritime transaction or a contract
evidencing a transaction involving commerce." And
§1 helps define §2's terms, warning, as
relevant here, that "nothing" in the Act
"shall apply" to "contracts of employment of
seamen, railroad employees, or any other class of workers
engaged in foreign or interstate commerce." For a court
to invoke its statutory authority under §§3 and 4,
it must first know if the parties' agreement is excluded
from the Act's coverage by the terms of §§1 and
2. This sequencing is significant. See, e.g., Bernhardt
v. Polygraphic Co. of America, 350 U.S. 198, 201-202.
New Prime notes that the parties' contract contains a
"delegation clause," giving the arbitrator
authority to decide threshold questions of arbitrability, and
that the "severability principle" requires that
both sides take all their disputes to arbitration. But a
delegation clause is merely a specialized type of arbitration
agreement and is enforceable under §§3 and 4 only
if it appears in a contract consistent with §2 that does
not trigger §l's exception. And, the Act's
severability principle applies only if the parties'
arbitration agreement appears in a contract that falls within
the field §§1 and 2 describe. Pp. 3-6.
2. Because the Act's term "contract of
employment" refers to any agreement to perform work, Mr.
Oliveira's agreement with New Prime falls within
§l's exception. Pp. 6-15.
(a) "[I]t's a 'fundamental canon of statutory
construction' that words generally should be
'interpreted as taking their ordinary . . . meaning ...
at the time Congress enacted the statute.'"
Wisconsin Central Ltd. v. United States, 585 U.S.,
(quoting Perrin v. United States, 444 U.S. 37, 42).
After all, if judges could freely invest old statutory terms
with new meanings, this Court would risk amending legislation
outside the "single, finely wrought and exhaustively
considered, procedure" the Constitution commands.
INS v. Chadha, 462 U.S. 919, 951. The Court would
risk, too, upsetting reliance interests by subjecting people
today to different rules than they enjoyed when the statute
was passed. At the time of the Act's adoption in 1925,
the phrase "contract of employment" was not a term
of art, and dictionaries tended to treat
"employment" more or less as a synonym for
"work." Contemporaneous legal authorities provide
no evidence that a "contract of employment"
necessarily signaled a formal employer-employee relationship.
Evidence that Congress used the term "contracts of
employment" broadly can be found in its choice of the
neighboring term "workers," a term that easily
embraces independent contractors. Pp. 6-10.
(b) New Prime argues that by 1925, the words
"employee" and "independent contractor"
had already assumed distinct meanings. But while the words
"employee" and "employment" may share a
common root and intertwined history, they also developed at
different times and in at least some different ways. The
evidence remains that, as dominantly understood in 1925, a
"contract of employment" did not necessarily imply
the existence of an employer-employee relationship. New
Prime's argument that early 20th-century courts sometimes
used the phrase "contracts of employment" to
describe what are recognized today as agreements between
employers and employees does nothing to negate the
possibility that the term also embraced agreements by
independent contractors to perform work. And its effort to
explain away the statute's suggestive use of the term
"worker" by noting that the neighboring terms
"seamen" and "railroad employees"
included only employees in 1925 rests on a precarious
premise. The evidence suggests that even "seamen"
and "railroad employees" could be independent
contractors at the time the Arbitration Act passed. Left to
appeal to the Act's policy, New Prime suggests that this
Court order arbitration to abide Congress' effort to
counteract judicial hostility to arbitration and establish a
favorable federal policy toward arbitration agreements.
Courts, however, are not free to pave over bumpy statutory
texts in the name of more expeditiously advancing a policy
goal. Rather, the Court should respect "the limits up to
which Congress was prepared" to go when adopting the
Arbitration Act. United States v. Sisson, 399 U.S.
267, 298. This Court also declines to address New Prime's
suggestion that it order arbitration anyway under its
inherent authority to stay litigation in favor of an
alternative dispute resolution mechanism of the parties'
choosing. Pp. 10-15.
857 F.3d 7, affirmed.
GORSUCH, J., delivered the opinion of the Court, in which all
other Members joined, except KAVANAUGH, J., who took no part
in the consideration or decision of the case. GlNSBURG, J.,
filed a concurring opinion.
Federal Arbitration Act requires courts to enforce private
arbitration agreements. But like most laws, this one bears
its qualifications. Among other things, §1 says that
"nothing herein" may be used to compel arbitration
in disputes involving the "contracts of employment"
of certain transportation workers. 9 U.S.C. §1. And that
qualification has sparked these questions: When a contract
delegates questions of arbitrability to an arbitrator, must a
court leave disputes over the application of §1's
exception for the arbitrator to resolve? And does the term
"contracts of employment" refer only to contracts
between employers and employees, or does it also reach
contracts with independent contractors? Because courts across
the country have disagreed on the answers to these questions,
we took this case to resolve them.
Prime is an interstate trucking company and Dominic Oliveira
works as one of its drivers. But, at least on paper, Mr.
Oliveira isn't an employee; the parties' contracts
label him an independent contractor. Those agreements also
instruct that any disputes arising out of the parties'
relationship should be resolved by an arbitrator- even
disputes over the scope of the arbitrator's authority.
of course, a dispute did arise. In a class action lawsuit in
federal court, Mr. Oliveira argued that New Prime denies its
drivers lawful wages. The company may call its drivers
independent contractors. But, Mr. Oliveira alleged, in
reality New Prime treats them as employees and fails to pay
the statutorily due minimum wage. In response to Mr.
Oliveira's complaint, New Prime asked the court to invoke
its statutory authority under the Act and compel arbitration
according to the terms found in the parties' agreements.
request led to more than a little litigation of its own. Even
when the parties' contracts mandate arbitration, Mr.
Oliveira observed, the Act doesn't always
authorize a court to enter an order compelling it. In
particular, §1 carves out from the Act's coverage
"contracts of employment of . . . workers engaged in
foreign or interstate commerce." And at least for
purposes of this collateral dispute, Mr. Oliveira submitted,
it doesn't matter whether you view him as an employee or
independent contractor. Either way, his agreement to drive
trucks for New Prime qualifies as a "contract of
employment of. . . [a] worker engaged in . . . interstate
commerce." Accordingly, Mr. Oliveira argued, the Act
supplied the district court with no authority to compel
arbitration in this case.
New Prime disagreed. Given the extraordinary breadth of the
parties' arbitration agreement, the company insisted that
any question about §1's application belonged for the
arbitrator alone to resolve. Alternatively and assuming a
court could address the question, New Prime contended that
the term "contracts of employment" refers only to
contracts that establish an employer-employee relationship.
And because Mr. Oliveira is, in fact as well as form, an
independent contractor, the company argued, §l's
exception doesn't apply; the rest of the statute does;
and the district court was (once again) required to order
the district court and the First Circuit sided with Mr.
Oliveira. 857 F.3d 7 (2017). The court of appeals held,
first, that in disputes like this a court should resolve
whether the parties' contract falls within the Act's
ambit or §1's exclusion before invoking the
statute's authority to order arbitration. Second, the
court of appeals held that §l's exclusion of certain
"contracts of employment" removes from the
Act's coverage not only employer-employee contracts but
also contracts involving independent ...