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Supreme Court hears New Prime Inc. v. Oliveira

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Just as Washington D.C. smolders over President Trump’s nomination of Brett Kavanaugh to the Supreme Court, the current panel of eight justices is reviewing a potentially economy changing case involving a long-haul trucker who filed a suit against transportation company New Prime in 2015. The case, New Prime Inc. v. Oliveira No. 17-340, has wide-ranging effects on not only the trucking industry but the U.S. economy as a whole. It reflects current disputes about the definitions of the terms “employee,” “independent contractor” and “contracts of employment.”

New Prime, and the trucking industry, in general, has argued that “contracts of employment” referred only to employees and not independent contractors. A main controversy in the case involves the 93-year old Federal Arbitration Act which exempted certain categories of transportation workers from mandatory arbitration agreements. The case seems to hinge on whether the term “contracts of employment,” defined in the 1925 act, included independent contractors or just permanent employees.

The trucker in question, Dominic Oliveira, has argued that he deserves a court hearing about his claims rather than arbitration, which is the preferred method of most employers. Critics argue that arbitration often masks unfair business practices. They further argue that the use of the “independent contractor” label is simply a way to reduce pay and deny benefits to a worker who, in all other facets, would be considered an employee.

Although the recent incarnation of the Supreme Court has more often than not sided with corporate interests—see Citizens United or Hobby Lobby—some of the questioning by the most conservative members of the court tends to reveal a stance that was highly doubtful of New Prime’s argument that “contracts of employment” only applied to employees and not independent contractors.

For example, Chief Justice John Roberts, appointed by President George W. Bush, noted that simply“ because someone would be considered or not considered an employee doesn’t necessarily answer the question of whether it’s a contract of employment. People think naturally of employing an independent contractor.”

Newly appointed Justice Neil Gorsuch, picked by President Donald Trump, suggested that “historical evidence” concludes the original 1925 law about “contracts of employment” may have covered more territory than New Prime had argued. Gorsuch indicated he believed the law “swept more broadly,” seeming to imply that he believed independent contractors and employees are the same.

Oliveira has asserted that, even though he was considered an independent contractor, he was working under the same conditions as employees, including the establishment of schedules, vacation time and company monitoring of his vehicle. Overall, justices seemed dubious that an employer could avoid a court case over a dispute simply by relabeling a worker as an independent contractor.

Experts believe that a ruling in favor of Oliveira could force higher wages but would also increase consumer prices and could hobble an industry which already faces a myriad of problems such as driver shortages, limits on capacity and trade war fears.

Currently, the Supreme Court is made up of eight justices, four considered liberal and four considered conservative, so there is certainly potential for a deadlocked verdict. Questions by conservative justices may, however, indicate that possibly Roberts and Gorsuch might side with Kagan, Breyer, Sotomayor, and Ginsburg in favor of Oliveira.

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