Federal Arbitration Act—Exemption for Contracts of Employment

New Prime, Inc. v. Oliveira, No. 17-340

Section 1 of the Federal Arbitration Act excludes from the Act’s coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  Today, the Supreme Court decided to resolve divisions among the lower courts as to two aspects of Section 1.  First, the Court will decide whether a dispute about the applicability of Section 1 should be decided by an arbitrator or a judge when the parties’ arbitration agreement delegates all issues of arbitrability to an arbitrator to decide.  Second, the Court will consider whether the exemption applies to contractual relationships with independent contractors.  The Court is likely to hear the case during its next term, which begins in October.