Last week, SCOTUS heard oral argument in the New Prime v. Oliveira case, the arbitration case involving the meaning or scope of the FAA’s section 1 exclusion for “contracts of employment” of transportation workers. (Disclosure: I participated as an amicus in this case.) Through my historical research of the the FAA’s enactment, I am certain that all workers, not just transportation workers, were originally supposed to be exempt from the FAA’s coverage, and thus, the 2001 SCOTUS decision in Circuit City is flawed to begin with. But given that Circuit City is the governing law and focusing on the narrow issue in the New Prime case, does the phrase “contracts of employment” cover only employees in the transportation industry, or all types of workers, including independent contractors, in the transportation industry? In my historical research, I found examples of “contracts of employment” from 1925 covering independent contractors. Thus, focusing on the narrow issue in the New Prime case, the Court should hold that all transportation workers, whether an employee or independent contractor, are exempt from the FAA’s coverage.
Looking at the last few decades of SCOTUS decisions involving the FAA, the Court has adopted an expansive view of the FAA’s scope in case after case. In light of this background, I was expecting that in the New Prime case argued this week, the conservative Justices would take the view that there is a strong federal policy in favor of arbitration, and thus, the worker exemption in section 1 of the FAA should be construed narrowly to apply solely to employees in the transportation industry, as opposed to employees and independent contractors.
Reading the transcript of this week’s oral argument from the New Prime case (click here for a copy), I was surprised at the questions from Justice Gorsuch and Chief Justice Roberts. Their questions appeared to favor the workers in this case, and I wouldn’t normally expect such questions from these Justices. Comparing the Justices’ questioning of both attorneys, it looks like the Justices were more skeptical of the employer’s views in this case. I originally thought this case would be decided with a 4-4 split vote along party lines, in light of prior FAA cases from the last several decades. But after the oral argument, it looks like an 8-0 decision in favor of the workers could actually occur. Has the Court’s expansive view of the FAA finally hit a wall? Will this be the first decision in decades where the Court rules against an expansive view of the FAA, and is this the start of a new trend or shift?
In light of the nomination (and today’s confirmation) of Brett Kavanaugh, some Court-watchers have opined that Chief Justice Roberts and perhaps others, at least for the near future, may shift more to the center when issuing decisions in order to protect the legitimacy of the Court and help avoid attacks against the Court as being too partisan. Could the questioning from the oral argument in the New Prime case reflect such a shift, and will the Court finally stop its aggressive expansion of the FAA? Also, is the #MeToo movement causing the Justices to reconsider their expansive views of the FAA? Only time will tell, and we have to observe the other FAA cases and cases from other areas of law before the Court this term. I am not sure if a broader shift is occurring yet, through which we will see less partisan and more moderate or centrist FAA views emerge from the Court. However, I was pleasantly surprised and not expecting the pro-worker line of questioning from Chief Justice Roberts and Justice Gorsuch in the New Prime case from earlier this week.