In an interesting twist on the interpretation of the Federal Arbitration Act, an Arizona federal judge ruled that drivers’ contractor agreements with Swift Transportation Co. were contracts of employment, making them exempt from the Federal Arbitration Act (“FAA”). The FAA exempts from arbitration “contracts of employment of seamen, railroad workers, and workers engaged in foreign or interstate commerce.”
The suit against Swift alleges that it misclassified drivers as independent contractors. The federal judge assigned to the case, Judge Sedwick, concluded that the drivers’ contractor agreements with Swift that are at the heart of the dispute set forth “terms and conditions of employment” after taking into consideration the contractor agreements as a whole, as well as the leases the drivers signed with Interstate Equipment Leasing — Swift’s equipment and truck leasing affiliate — and evidence of the amount of control that Swift, IEL and other defendants exerted over the drivers in how they operated, according to the order and opinion.
Judge Sedwick also said that the load assignment and payment structure limited the plaintiffs’ autonomy and ability to maximize their profits, which further suggested an employment relationship.
Swift had sought to have the dispute heard in arbitration, arguing that the drivers’ contractor agreements contained a clear provision that any disputes over the agreements would be taken up in arbitration. The district court had previously granted that request in 2010. The Ninth Circuit court sent the dispute back down to the district court to have it first figure out whether the drivers’ contractor agreements constituted contracts of employment before deciding whether the fight was even exempted from arbitration under the FAA.
The case is Virginia Van Dusen et al. v. Swift Transportation Co., Inc. et al., case number 2:10-cv-00899, in the U.S. District Court of Arizona.