Neil Gorsuch testifies during his confirmation hearing. Photo: Diego M. Radzinschi/NLJ

In a rare unanimous win for workers in an arbitration case, the U.S. Supreme Court on Tuesday ruled that a court should decide whether an exception to the federal arbitration law applies before arbitration can proceed.

Justice Neil Gorsuch wrote the opinion in New Prime v. Oliveira, with Justice Brett Kavanaugh recusing himself. The case was argued Oct. 3, before Kavanaugh joined the court.

Justice Ruth Bader Ginsburg, who has crossed swords with Gorsuch in the past, wrote a concurrence that expressed a broader view on interpreting statutes—a new marker that could be a touchstone for future cases.

In explaining the court's ruling, Gorsuch said the words of the Federal Arbitration Act should be interpreted in the way the words meant when the law was enacted in 1925, to avoid “upsetting reliance interests in the settled meaning of a statute.”

But Ginsburg said that while she agreed with Gorsuch, “Congress, however, may design legislation to govern changing times and circumstances.”

Supreme Court Justice Ruth Bader Ginsburg speaks at Columbia Law School Photo by David Handschuh/ALM

Quoting from a 1999 precedent West v. Gibson, Ginsburg added, “sometimes, '[w]ords in statutes can enlarge or contract their scope as other changes, in law or in the world, require their application to new instances or make old applications anachronistic.'”

The New Prime ruling interpreted a seemingly narrow exception in the Federal Arbitration Act involving “contracts of employment” of certain transportation workers.

But the case, one of three arbitration cases on the court's docket this term, drew attention from business groups including the U.S. Chamber of Commerce. The pro-business group told the court in an amicus brief by Mayer Brown partner Andrew Pincus that its members “have structured millions of contractual relationships—including large numbers of agreements with independent contractors—around the use of arbitration to resolve disputes.”

If the high court ruled against the business community, the Chamber's brief said, “untold thousands of arbitration agreements would be called into question.”

“The court refused to follow the strong public policy favoring arbitration in the face of direct statutory language of an exclusion for workers engaged in interstate commerce,” said Michael Droke, a labor and employment attorney at Dorsey & Whitney.

The ruling was a win for Public Justice, whose staff attorney, Jennifer Bennett, argued the case on behalf of Dominic Oliveira, a driver for the trucking company New Prime. By coincidence, the New Prime ruling was announced just before Public Justice's executive director F. Paul Bland Jr. was to argue in the class action case Home Depot USA v. Jackson. Theodore Boutrous of Gibson, Dunn & Crutcher represented New Prime in the case.

 

Read the decision in New Prime v. Oliveira:

 

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