Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/1044881
bUSINESS 26 | Overdrive | November 2018 The Supreme Court last month heard oral arguments in a case that could have ramifications on the con- tracts made between fleets and own- er-operators and lawsuits that arise from those contracts. In particular, the court's decision could clarify a muddy procedural matter involving contract arbitration clauses and owner-operators, said Braden Core, a partner at Scopelitis, Garvin, Light, Hanson & Feary. Core attended the hourlong session before the Supreme Court on Oct. 3. The case involves owner-operator Dominic Oliveira and his former carrier New Prime, the legal name for Springfield, Missouri-based Prime Inc., which has contracts with more than 5,000 independent contractors. The key question before the court is whether owner-operators are exempt from the Federal Arbitration Act of 1926. The act protects arbitra- tion clauses within employer-employ- ee contracts. The court's decision, expected in early 2019, will dictate if an arbi- trator should decide whether an owner-operator is exempt from the Arbitration Act if he or she brings a lawsuit against a carrier, or whether the courts should make that determi- nation. The decision won't address whether any ensuing legal proceed- ings should be handled by an arbi- trator or the courts. It's a nuanced question, but one that carries broad implications, Core said. Oliveira and his legal team, who won their case against New Prime in the U.S. 1st Circuit Court of Appeals, argue that he is exempt from his arbitration clause and that his lawsuit should be taken up by the courts. New Prime argues otherwise, saying his contract stipulates that his original lawsuit against the company, which argues he was misclassified as an independent contractor, is bound to arbitration. Oliveira sued to be classified as an employee as a means to gain certain employment benefits that are not pro- vided to contractors. Arbitration clauses have come before the Supreme Court numerous times, Core said, "but the trucking industry faces a unique challenge" due to an exemption afforded by the 1926 Arbitration Act. The law states that "transportation workers" who have "contracts of employment" are exempt from clauses that force litiga- tion into arbitration. The New Prime case will decide whether owner-operators have "con- tracts of employment" with their carriers. If they do, they would be exempt from arbitration clauses, as Oliveira argues. If the court decides they do not have contracts of employment, arbitration clauses within independent contractor agree- ments would become more binding. At the heart of the case is which entity – an arbitrator or the court – should decide if an owner-operator's contract with a carrier constitutes a "contract of employment." Should the court rule in favor of Oliveira, the justices effectively would be ruling that courts should deter- mine whether an arbitration clause is valid in each individual lawsuit brought by an owner-operator against a carrier. If New Prime prevails, that determination would be up to arbi- trators. – James Jaillet Case could clarify arbitration with fleets The Supreme Court's decision could come down to Chief Justice John Roberts and Justice Neil Gorsuch. Both "seemed sympathetic to [the] argu- ment" made by Oliveira, said attorney Braden Core. Review a copy of your credit report before you attempt to secure equip- ment financing, because your credit history could contain wrong or harm- ful information that you'll want to explain to a potential lender. Be upfront about any financial problems; showing you have overcome hard times demonstrates determination and strong character. Free credit reports from the three leading agencies are available at annualcreditreport.com. The Partners in Business program, produced by Overdrive and financial services provider ATBS, is sponsored by TBS Factoring Service. Want more Partners in Business tips and information on how to run your small trucking busi- ness more profitably? Visit OverdriveOnline.com/pib-pod- casts to find 20-minute pod- casts on topics such as manag- ing time, budgeting money and controlling fuel costs. PARTNERS IN BUSINESS TIP: CHECK YOUR CREDIT