Legal News

Truck Drivers and Other Transportation Workers Soon May Be Required to Arbitrate Claims in New Jersey

Jul 10, 2019 @ 16 : 28 pm

Companies who employ truck drivers and other transportation workers should have their arbitration agreements reviewed by a qualified attorney considering recent caselaw.

The Federal Arbitration Act (FAA) requires arbitration of employment claims when included in employment contracts. The FAA specifically exempts transportation workers like truck drivers from this general requirement. The New Jersey Arbitration Act does not include an exemption for transportation works a New Jersey appeals court recently ruled. Colon v. Strategic Delivery Solutions, LLC, No. A-2378-17T4 (N.J. Super. Ct. App. Div. June 4, 2019).

The plaintiffs in Colon were transportation workers with independent contractor agreements containing arbitration clauses expressly referencing the FAA. The agreements did not mention the NJAA. The plaintiffs filed a complaint alleging violations of the New Jersey Wage and Hour Law and New Jersey Wage Payment Law. 

The case was remanded with instructions to determine whether the plaintiffs, independent contractor-drivers, were covered by the FAA’s exemption for “transportation workers,” consistent with the U.S. Supreme Court’s New Prime, Inc. v. Oliveira, No. 17-340 (Jan. 15, 2019). The Court went on to say if the trial court finds these plaintiffs to be transportation workers exempt from the FAA, the plaintiffs still may arbitration their claims under the state arbitration law. Ironically, the following day a different panel of New Jersey’s Appellate Division said in Arafa v. Health Express Corp., No. A-1862-17T3 (June 5, 2019), that a driver may pursue his wage and hour claims in court without discussing the NJAA.

The FAA states that it “shall not apply to contracts of employment of […] any other class of workers engaged in foreign or interstate commerce.” In New Prime, the Supreme Court held that the FAA’s transportation worker exception applies to independent contractor agreements between companies and transportation workers.

In Colon, the New Jersey’s Appellate Division held that the NJAA provided a basis to enforce an arbitration agreement between a company and independent contractors. The Court said arbitration was appropriate even though the agreement did not expressly reference the NJAA because the statute applies to all arbitration agreements in New Jersey made on or after January 1, 2003.

The attorneys at Vlasac & Shmaruk recommend having a qualified employment attorney review any arbitration agreements. If you have any questions about how this new law may affect your business, please contact one of the attorneys at Vlasac & Shmaruk at (732) 494-3600. Our attorneys are experienced and knowledgeable, and they will be more than happy to consult with you.

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