## Facts

- Dominic Oliveira worked as a truck driver for New Prime Inc., an interstate trucking company.
- Oliveira’s operating agreement with New Prime classified him as an independent contractor.
- The agreement contained a mandatory arbitration clause and a delegation provision stating that disputes—including disputes about whether arbitration was required—must be decided in arbitration.
- Oliveira joined a federal putative class action alleging New Prime underpaid its drivers and misclassified them as independent contractors rather than employees.
- New Prime asked the federal district court to compel arbitration under the Federal Arbitration Act (FAA), relying on FAA §§ 3 and 4.
- Oliveira responded that the FAA did not authorize compulsion of arbitration because FAA § 1 excludes “contracts of employment” of certain transportation workers engaged in foreign or interstate commerce.
- The district court declined to compel arbitration, concluding that the threshold question of the FAA’s applicability was for the court to decide and that, if § 1 applied, the court lacked statutory authority to compel arbitration.
- The court of appeals affirmed, and the Supreme Court granted certiorari.

## Issues

1. When an agreement contains a delegation clause, must a court decide first whether the FAA’s § 1 transportation-worker exclusion applies before compelling arbitration?
2. Does FAA § 1’s phrase “contracts of employment” include agreements that label transportation workers as independent contractors?

## Decision

- The Supreme Court affirmed the court of appeals in an 8–0 opinion by Justice Gorsuch (Justice Kavanaugh did not participate).
- A court must decide, before compelling arbitration under the FAA, whether the contract falls within the FAA’s coverage or is excluded by § 1; a delegation clause cannot supply authority the FAA withholds.
- For purposes of § 1, the term “contracts of employment,” as used in 1925, refers broadly to agreements to perform work and is not limited to formal employer–employee relationships.
- Because Oliveira was a transportation worker engaged in interstate commerce and his work agreement qualified as a “contract of employment” within § 1, the FAA did not authorize a court to compel arbitration.

## Legal Principles

- A court’s power to stay litigation or compel arbitration under FAA §§ 3 and 4 exists only if the agreement is within the FAA’s scope under § 2 and not excluded by § 1.
- Courts must decide the FAA’s threshold applicability, including whether § 1’s transportation-worker exclusion applies, even when the parties’ contract contains a delegation provision assigning “arbitrability” questions to an arbitrator.
- A delegation provision is itself an arbitration agreement whose enforcement depends on the FAA’s statutory grant of authority; the clause cannot be enforced under the FAA until a court determines the Act applies.
- In interpreting FAA § 1, the meaning of “contracts of employment” is determined by ordinary usage at the time of enactment (1925); at that time, the phrase commonly included agreements for work by independent contractors.
- General federal policy favoring arbitration does not permit courts to narrow § 1’s text or expand the FAA beyond the categories Congress included.

## Conclusion

New Prime Inc. v. Oliveira holds that judges—not arbitrators—must decide at the outset whether the FAA applies, including whether § 1 excludes the parties’ agreement, and that § 1’s reference to “contracts of employment” includes independent-contractor agreements for transportation workers engaged in interstate commerce, leaving courts without FAA authority to compel arbitration in such disputes.


New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019)