In Muro v Cornerstone Staffing Solutions Inc the Fourth District of the California Court of Appeal ruled that a truck driver could not be compelled to arbitrate his claims in a state wage and hour class action against his staffing company employer, notwithstanding an arbitration clause in his employment contract that required individual arbitration rather than class actions.

Case overview

The truck driver contended that he was a transportation worker and therefore exempt from the Federal Arbitration Act. The defendant staffing company – relying on a 2005 Eleventh Circuit decision – argued that the act's so-called 'transportation worker' exemption applies only if the relevant employer is part of the transportation industry. The California appellate court declined to adopt the Eleventh Circuit's interpretation and further held that the staffing company's significant (if not primary) focus on transportation would qualify under that standard in any event. After concluding that the act did not apply, the court held that, under the California Supreme Court's 2007 decision in Gentry v Superior Court (which would be pre-empted if the act applied), the class waiver provision in the staffing company's agreement was unenforceable under California law.

Comment

Muro continues a line of California state court decisions giving a broad reading to the act's transportation worker exception, which 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".

Relatedly, in February 2018 the Supreme Court agreed to hear New Prime Inc v Oliveira, which concerns the scope of the transportation worker exception in the act – in particular, whether that exception applies to independent contractors and employees. New Prime will be argued before the Supreme Court in Autumn 2019.

For further information on this topic please contact Ruth Zadikany or Grant T Miller at Mayer Brown LLP's Los Angeles office by telephone (+1 213 229 9500) or email (rzadikany@mayerbrown.com or gtmiller@mayerbrown.com). Alternatively, contact Richard E Nowak at Mayer Brown LLP's Chicago office by telephone (+1 312 782 0600) or email (rnowak@mayerbrown.com). The Mayer Brown LLP website can be accessed at www.mayerbrown.com.

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