Employment Litigation · Primary-source case analysis

New Prime: The FAA Transportation-Worker Exemption Includes Independent Contractors

By Aneeta Mishra and Timothy Chan

Published April 17, 2026

New Prime addresses who decides the FAA transportation-worker exclusion and whether its reference to contracts of employment reaches workers labeled independent contractors.

A trucking wage class action

Dominic Oliveira drove for interstate carrier New Prime under an operating agreement that called him an independent contractor and contained mandatory arbitration and delegation provisions. When he sued over allegedly unlawful wages, New Prime moved to compel arbitration under the FAA.

The court decides whether the FAA applies

Before using sections 3 and 4 to stay litigation or compel arbitration, a court must determine whether sections 1 and 2 place the contract within the Act. A delegation clause is itself enforceable through the FAA only if the Act covers the underlying contract, so it cannot bypass that antecedent inquiry.

The 1925 meaning included agreements to work

The Court interpreted 'contract of employment' according to its ordinary meaning when Congress enacted the statute. Contemporary dictionaries and legal usage treated employment broadly as work, not solely the modern employer-employee category. The neighboring term 'workers' likewise comfortably included independent contractors.

Disposition and scope

The unanimous participating Court affirmed the First Circuit and held Oliveira's agreement within the section 1 exclusion. The decision establishes a limit on FAA authority; it does not determine whether another source of law could enforce a particular arbitration agreement.

Key takeaways

• A court decides the FAA section 1 coverage question first.
• A delegation clause cannot create FAA authority the statute withholds.
• Transportation-worker status is not defeated merely by an independent-contractor label.
• Possible enforcement under non-FAA law is a separate question.