US Supreme Court Walks Back Arbitration as a Way to Resolve Disputes Between Carriers and Independent Contractors

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To resolve disputes with its independent contractors, motor carriers frequently include broad mandatory arbitration clauses in their agreements with those contractors. Courts will usually compel arbitration under those agreements through application of the 1925 Federal Arbitration Act (FAA). From a motor carrier perspective, the benefit of an FAA based arbitration clause is swifter, less public, and uniform resolution of disputes across many states. For the largest fleets, the FAA also eliminates the threat of class actions. From an independent contractor’s perspective, those benefits may be not so beneficial. However, the United States Supreme Court’s December decision in New Prime v. Oliveira stuck a small blow to motor carriers. The decision should force carriers to rewrite their arbitration clauses away from the FAA and toward state based arbitration statutes.

Continue reading the article which appeared in the February 2019 Trucking Minnesota magazine.