US Supreme Court lets broad array of transport workers sidestep arbitration

By Thomson Reuters Apr 12, 2024 | 9:36 AM

By Daniel Wiessner

(Reuters) -The U.S. Supreme Court on Friday gave a boost to a delivery truck driver’s bid to expand the universe of employees in interstate commerce who are exempted from mandatory arbitration of legal disputes beyond workers at transportation companies.

The justices, in a 9-0 ruling, threw out a lower court’s dismissal of proposed class action litigation by Neal Bissonnette, a delivery driver for LePage Bakeries Park Street, a unit of Wonder Bread maker Flowers Foods. Bissonnette has said Flowers Foods deprives drivers of wages by treating them as independent contractors rather than employees.

The ruling faulted a 2022 decision by the New York-based 2nd U.S. Circuit Court of Appeals that the exemption did not apply to LePage’s case because the company’s customers were purchasing bread and not transportation services.

“A transportation worker need not work in the transportation industry to fall within the exemption from the FAA,” conservative Chief Justice John Roberts wrote for the court.

The justices directed the lower court to revisit the matter.

Many companies require workers to sign arbitration agreements and claim individual arbitration is quicker and more efficient than resolving disputes in court. Critics of the practice have said it prevents companies from being held accountable for legal violations that affect large numbers of workers.

The Federal Arbitration Act (FAA), dating to 1925, requires arbitration agreements to be enforced according to their terms but exempts employment contracts “of seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce.”

The Supreme Court in a 2001 ruling said the exemption applied only to transportation workers. Since then, appeals courts have split over whether that means any worker who transports goods or only those employed by companies that provide transportation services.

Bissonnette accused LePage of misclassifying drivers who delivered baked goods to retailers as independent contractors and depriving them of minimum wage, overtime pay and other legal protections.

(Reporting by Daniel Wiessner in Albany, New York; Additional reporting by Andrew Chung; Editing by Will Dunham)