The reach of the FAA’s transportation worker exemption remains heavily litigated, particularly as it applies to last-mile delivery drivers. Federal circuits are currently divided on whether...
Seyfarth Synopsis: The reach of the FAA’s transportation worker exemption remains heavily litigated, particularly as it applies to last-mile delivery drivers. Federal circuits are currently divided on whether such drivers fall within the exemption. The U.S. Supreme Court is poised to resolve the split soon, with its decision expected to have significant ramifications.
The Federal Arbitration Act (“FAA”) provides that arbitration agreements are “valid, irrevocable, and enforceable,” subject to limited exceptions. One such exception, set forth in Section 1, excludes “contracts of employment” of any “class of workers engaged in foreign or interstate commerce”—commonly referred to as the “transportation worker exemption.” 9 U.S.C. § 1. More than a century after the FAA’s enactment, the scope of this exemption and the FAA’s reach continues to be actively litigated.
Over the past two decades, the U.S. Supreme Court has clarified the scope of this exemption through a series of key decisions. In Circuit City Stores, Inc. v. Adams (2001), the Court rejected the Ninth Circuit’s broad interpretation of Section 1 and limited the exemption to workers actually engaged in the movement of goods in interstate commerce. Later, in New Prime Inc. v. Oliveira (2019), the Court held that independent...
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