Both arguments persuaded the First Circuit, which affirmed the denial of New Prime’s motion to compel arbitration. Oliveira v. New Prime, Inc., 857 F.3d 7, 24 (1st Cir. 2017). They convinced the Supreme Court too. Regarding the first, the Court explained that while the FAA authorizes a court to compel arbitration if parties agreed to arbitrate, the statute also defines the agreements to which it applies. New Prime, slip op. at 3–6.

Further, Oliveira argued that the “contracts of employment” exception for interstate transportation workers encompassed both employees and independent contractors. Both the District of Massachusetts and the First Circuit held that a court should determine whether a contract is triggered by the Section 1 exclusions before compelling arbitration.Oliveira v. New Prime, Inc., 857 F.3d 7, 15 (2017); 141 F. Supp. 3d 125 (D. Mass. October 27, 2015). On February 26, 2018, the Supreme Court granted certiorari to review the First Circuit’s decision.

If the FAA does not apply, private contracting parties cannot, through the insertion of a delegation clause, confer authority upon a district court — i.e., to compel arbitration under the FAA — that Congress chose to withhold. Oliveira v. New Prime, Inc., 857 F.3d 7, 15 (1st Cir. 2017). After examining the text of the FAA’s Section 1 exemption and determining the FAA does not include a definition for “contracts of employment,” the First Circuit determined that when the FAA was enacted, “contracts of employment” meant agreements to perform work, including agreements with independent contractors.

All three cases involve various aspects of the reach or interpretation of the Federal Arbitration Act (“FAA”). The Supreme Court heard its first arbitration case during Wednesday, October 3’s oral arguments in New Prime, Inc. v. Oliveira, (the First Circuit’s opinion below reported at 857 F. 3d 7). In this case, the Supreme Court is being asked to determine whether Section 1(a) of the FAA, which excludes certain transportation “workers” from the FAA’s purview, applies to independent contractors, in addition to the employees, of a transportation company.

This term, the United States Supreme Court will address whether an exemption to the Federal Arbitration Act (FAA) for certain transportation workers applies to claims by independent contractors. The issue before the Supreme Court is on appeal from the First Circuit Court of Appeal’s decision in Oliveira v. New Prime, Inc., 857 F.3d 7, 9 (1st Cir. 2017).Oliveira began with a class action in Massachusetts federal district court filed by Dominic Oliveira against New Prime, Inc., an interstate motor carrier.

On May 12, 2017, the First Circuit Court of Appeals affirmed, holding that “the question of whether the§ 1 exemption applies is an antecedent determination that must be made by the district court before arbitration can be compelled under the FAA.” 857 F.3d 7, 15 (2017). The First Circuit noted the split between the Eighth Circuit, which held that an arbitrator should decide, and the Ninth Circuit, which held that the court should decide, but ultimately sided with the Ninth Circuit.Id.

Similarly, the First Circuit relied on Van Dusen in determining that whether the FAA confers authority on a district court to compel arbitration is not a question of arbitrability and, as such, could not legally be delegated to an arbitration. Oliveira v. New Prime, Inc. 857 F.3d 7 (1st Cir. 2017). The Court concluded “the trial court did not err by denying defendants’ motion to compel arbitration of the preemption issue and the validity of the arbitration agreement.”

Similarly, the First Circuit relied on Van Dusen in determining that whether the FAA confers authority on a district court to compel arbitration is not a question of arbitrability and, as such, could not legally be delegated to an arbitration. Oliveira v. New Prime, Inc. 857 F.3d 7 (1st Cir. 2017). The Court concluded “the trial court did not err by denying defendants’ motion to compel arbitration of the preemption issue and the validity of the arbitration agreement.”

Similarly, the First Circuit relied on Van Dusen in determining that whether the FAA confers authority on a district court to compel arbitration is not a question of arbitrability and, as such, could not legally be delegated to an arbitration. Oliveira v. New Prime, Inc. 857 F.3d 7 (1st Cir. 2017). The Court concluded “the trial court did not err by denying defendants’ motion to compel arbitration of the preemption issue and the validity of the arbitration agreement.”

We previously discussed the lower court’s decision in this important case.The Case BelowIn Oliveira v. New Prime, Inc., 857 F.3d 7 (May 12, 2017), the U.S. Court of Appeals for the First Circuit had confronted two arbitration-related questions of first impression in that circuit. In the case, Dominic Oliveira had signed an Independent Contractor Operating Agreement with New Prime, Inc., which contained an arbitration provision governed by the Commercial Arbitration Rules of the American Arbitration Association.