The Federal Arbitration Act (FAA) requires state and federal courts to defer to private arbitration agreements entered into between parties, including employers and employees. Employers often use arbitration agreements to avoid what they consider to be costly, delayed, and sometimes biased courts and juries. The FAA contains an exemption applying to transportation workers.
Last year in Bissonnette v. LePage Bakeries Park St. LLC, the Second Circuit Court of Appeals held that this exemption is limited to workers in the transportation industry. Employees who drive are not exempt from application of the FAA if their companies do not provide transportation services for hire.
Last week, the U.S. Supreme Court agreed to review the Second Circuit’s decision. Over the years, a majority of Supreme Court justices have interpreted the FAA broadly, consistently rejecting attempts to avoid mandatory arbitration of employment and commercial claims. Several federal appellate courts have issued decisions contradicting the Second Circuit and have applied the FAA exemption to any workers who provide transportation services regardless of their employers’ actual businesses.
By accepting review of this case, the Supreme Court may intend to resolve this circuit split. A decision in favor of the employees would mark a substantial departure from prior Supreme Court precedents for arbitration agreement challenges.
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