Since the emergence of the gig economy, courts have struggled to fit workers in such businesses into the traditional framework of employment law. One common issue is whether the Federal Arbitration Act (FAA) applies to drivers who work for rideshare companies, Uber and Lyft. If the FAA applies, predispute arbitration agreements covering federal and state statutory claims will be enforced; if the FAA does not apply, enforcement will be a matter of state law, and California and other states have made clear they will not enforce such pacts.

Section 1 of the FAA provides that the FAA does not apply to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. §1. The Supreme Court has interpreted this clause in two significant decisions. First, in Circuit City Stores v. Adams, 532 U.S. 105 (2001), the court held that the exception only applies to transportation workers “engaged in foreign or interstate commerce.” Second, and more recently, the Supreme Court in New Prime v. Oliveira, 139 S. Ct. 532 (2019), held that “contracts of employment” included independent contractor agreements with interstate truckers.