Oliveira v. New Prime, Inc.

Filing 60

Chief Judge Patti B. Saris: MEMORANDUM and ORDER entered. The defendant's motion to compel arbitration and stay proceedings, and/or dismiss the case for improper venue, or, in the alternative, to dismiss Count III for failure to state a claim (Docket No. 35 ) is DENIED without prejudice. The parties may conduct factual discovery on the threshold question of the plaintiff's status as an employee or independent contractor until January 8, 2016. Any motions for summary judgment shall be filed by January 22, 2016. (Geraldino-Karasek, Clarilde)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
)
Plaintiff
)
)
v.
)
)
)
NEW PRIME, INC.,
)
)
Defendant.
)
___________________________________)
DOMINIC OLIVEIRA,

Civil Action
No. 15-10603-PBS

MEMORANDUM AND ORDER
October 26, 2015
Saris, C.J.
INTRODUCTION
This case involves a labor dispute between a trucking
corporation and a former truck driver. In March 2015, the
plaintiff Dominic Oliveira brought this proposed class action
alleging that the defendant New Prime, Inc. violated the Fair
Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq., and
Missouri and Maine labor laws, by failing to pay its truck
drivers minimum wage (Docket Nos. 1, 33). New Prime moved to
compel arbitration under § 4 of the Federal Arbitration Act
(FAA), 9 U.S.C. § 4, and two operating agreements signed by
Oliveira on behalf of Hallmark Trucking LLC, both of which
contain an arbitration clause (Docket No. 35). Oliveira argues
that the Court must determine whether the operating agreements

1

are exempt from arbitration under § 1 of the FAA before it can
consider New Prime’s motion to compel arbitration (Docket No.
40). New Prime maintains that the exemption’s application is a
threshold question of arbitrability that the parties delegated
to the arbitrator in the operating agreements (Docket No. 51).
After hearing, I agree that it is for the Court, and not the
arbitrator, to decide whether the § 1 exemption applies before
considering the motion. The motion to compel arbitration is
therefore DENIED without prejudice.1
FACTUAL BACKGROUND
The following facts are taken from the First Amended
Complaint (Docket No. 33) and the operating agreements
referenced by all parties (Docket No. 36, Ex. A, Ex. B). In
March 2013, Plaintiff Dominic Oliveira entered Defendant New
Prime’s “Paid Apprenticeship” training program, which is
advertised as an on-the-job training program for new truck
drivers. Docket No. 33, Ex. 2, Ex. 3. Apprentices first obtain a
Missouri Commercial Driver’s License (CDL) permit. They next

1

Alternatively, New Prime argues that the Court should dismiss
the case for improper venue because the arbitration clause
states that arbitration is to take place in Missouri. If the
case remains in this Court and moves forward, New Prime moves to
dismiss Oliveira’s breach of contract/unjust enrichment claim
(Count 3), arguing that it is preempted by the FLSA and the
Federal Aviation Administration Authorization Act. The Court
will not address these issues until the threshold issue of
exemption is resolved.
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shadow New Prime drivers for three to four weeks and drive
10,000 miles under supervision. During this time, apprentices
receive an advance of $200 per week, which is subtracted from
their future earnings, but otherwise receive no remuneration. As
a result, apprentices are essentially free labor while they
train with New Prime. Under Department of Transportation
regulations, trucks can be on the road for longer periods of
time when a New Prime driver switches off with an apprentice.
After completion of this on-the-road instruction,
apprentices take a CDL exam and then work as a “B2” company
driver trainee for 30,000 miles. During this period, the
trainees earn fourteen cents per mile driven, but are not paid
for time spent loading and unloading cargo or protecting company
property. The company also regularly deducts money from
paychecks, including the $200 weekly advance from the
apprenticeship program. As a result of these deductions,
Oliveira received approximately $440-$480 per week for driving
5,000-6,000 miles, which equates to about $4/hour while driving.
Finally, after completing the 30,000 miles as a B2 company
driver trainee, the truck drivers complete additional
orientation classes, which last for about a week. They are then
classified as either company drivers or independent contractors.
The truck drivers are not paid for the time spent in the

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orientation classes, and receive a $100 bonus if they opt to
become independent contractors.
In May 2013, when Oliveira returned from his trainee
driving, New Prime told Oliveira that he could make more money
if he became an independent contractor. New Prime directed him
to a company called Abacus Accounting, which was located on the
second floor of New Prime’s building. Abacus Accounting told
Oliveira to provide suggested names for a limited liability
company (LLC), and then created Hallmark Trucking LLC on his
behalf. New Prime also directed Oliveira to Success Leasing, a
closely related corporation to New Prime, to select a truck.
At Success Leasing, Oliveira was given several documents to
sign. One of these documents was titled “INDEPENDENT CONTRACTOR
OPERATING AGREEMENT,” which repeatedly states that the intent of
the agreement is to establish an independent contractor
relationship between New Prime and Hallmark Trucking LLC. Docket
No. 36, Ex. A, at 1, 9. The agreement also contains the
following arbitration clause:
GOVERNING LAW AND ARBITRATION. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF MISSOURI. ANY DISPUTES ARISING
UNDER, ARISING OUT OF OR RELATING TO THIS AGREEMENT,
INCLUDING AN ALLEGATION OF BREACH THEREOF, AND ANY
DISPUTES ARISING OUT OF OR RELATING TO THE RELATIONSHIP
CREATED BY THE AGREEMENT, AND ANY DISPUTES AS TO THE
RIGHTS AND OBLIGATIONS OF THE PARTIES, INCLUDING THE
ARBITRABILITY OF DISPUTES BETWEEN THE PARTIES, SHALL BE
FULLY RESOLVED BY ARBITRATION IN ACCORDANCE WITH
MISSOURI’S
ARBITRATION
ACT
AND/OR
THE
FEDERAL
ARBITRATION ACT . . . THE PARTIES SPECIFICALLY AGREE
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THAT NO DISPUTE MAY BE JOINED WITH THE DISPUTE OF ANOTHER
AND AGREE THAT CLASS ACTIONS UNDER THIS ARBITRATION
PROVISION ARE PROHIBITED . . . THE PLACE OF THE
ARBITRATION HEREIN SHALL BE SPRINGFIELD, MISSOURI.
Id. at 10. Oliveira “felt pressure” to sign quickly because New
Prime had a load waiting for him outside. Docket No. 33, ¶ 45.
Success Leasing then instructed Oliveira to go to the New Prime
company store to purchase security locks, fuel, insurance, and
other tools of the trade. These items totaled roughly $5,000,
which New Prime then deducted from his paycheck at a rate of $75
per week.
Although New Prime labeled Oliveira an independent
contractor in the operating agreement, his role as a truck
driver for New Prime did not change from his time as an
apprentice and trainee driver. New Prime continued to directly
and indirectly control Oliveira’s scheduling, vacations, and
time at home by requiring him to take specific training courses
and follow certain procedures. These courses and procedures
limited which shipments he could take and made it difficult, if
not impossible, for him to work for other trucking or shipping
companies. In particular, New Prime dispatched drivers through a
“QUALCOMM system” that was not adaptable to other carriers.
Docket No. 33, ¶ 51.2

2

The parties have not explained what the “QUALCOMM system” is or
how it works.
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Meanwhile, New Prime continued to make regular deductions
from Oliveira’s paycheck, ostensibly because of lease payments
on the truck and payments for the other tools that New Prime
instructed him to buy. On several occasions, his weekly pay was
negative after spending dozens of hours on the road. In March
2014, Oliveira signed a second contract titled “INDEPENDENT
CONTRACTOR OPERATING AGREEMENT” on behalf of Hallmark Trucking
LLC, which contains an identical arbitration clause to that in
the first agreement. Docket No. 36, Ex. B, at 1, 9-10. The
second contract also repeatedly states that the agreement
establishes an independent contractor relationship between New
Prime and Hallmark Trucking LLC.
Oliveira terminated his contract with New Prime in
September 2014. The next month, however, New Prime rehired him
as a company driver on the condition that New Prime would
continue deducting money from his paychecks to repay an alleged
debt to Success Leasing. With these deductions, Oliveira again
was paid below the minimum wage. He now brings this class
action, arguing that he and other New Prime drivers were not
paid the minimum wage under federal and state law.
DISCUSSION
I.

Statutory Framework
Congress enacted the FAA in 1925 in “response to hostility

of American courts to the enforcement of arbitration agreements,
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a judicial disposition inherited from then-longstanding English
practice.” Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111
(2001). To give effect to this purpose, § 2 of the FAA provides
that written arbitration agreements “shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.” 9 U.S.C. §
2; see also Circuit City, 532 U.S. at 111. In short, § 2 “is a
congressional declaration of a liberal federal policy favoring
arbitration agreements.” Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983); see also Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991). “At a
minimum, this policy requires that ambiguities as to the scope
of the arbitration clause itself must be resolved in favor of
arbitration.” PowerShare, Inc. v. Syntel, Inc., 597 F.3d 10, 15
(1st Cir. 2010) (internal quotation marks and alterations
omitted).
The Act provides two mechanisms through which federal
courts may enforce § 2’s liberal policy favoring arbitration.
See Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68
(2010). Section 3 instructs district courts to stay the trial of
an action “upon any issue referable to arbitration under an
agreement in writing for such arbitration” once the court is
“satisfied that the issue involved in such suit or proceeding is
referable to arbitration under such an agreement.” 9 U.S.C. § 3.
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Section 4 allows any party “aggrieved” by the failure of another
party “to arbitrate under a written agreement for arbitration”
to petition a district court for “an order directing that such
arbitration proceed in the manner provided for in such
agreement.” Id. § 4. The district court “shall” order
arbitration upon being satisfied that “the making of the
agreement for arbitration or the failure to comply therewith is
not in issue.” Id.
Despite the FAA’s broad purpose and strong language, the
Act does not extend to all arbitration agreements. Section 2
limits its application to contracts “evidencing a transaction
involving commerce,” or arising from a “maritime transaction.” 9
U.S.C. § 2. More importantly for purposes of the present
dispute, § 1, titled “exceptions to operation of title,” states
“nothing herein contained shall apply to contracts of employment
of seamen, railroad employees, or any other class of workers
engaged in foreign or interstate commerce.” Id. § 1. Section 1
thus exempts “contracts of employment of transportation workers”
from the FAA entirely. Circuit City, 532 U.S. at 119. Employment
contracts involving truck drivers fall within the transportation
worker exception. See, e.g., Lenz v. Yellow Transp., Inc., 431
F.3d 348, 351 (8th Cir. 2005) (holding that a truck driver, but
not a customer service representative, is a transportation
worker under § 1); Harden v. Roadway Package Sys., Inc., 249
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F.3d 1137, 1140 (9th Cir. 2001) (holding that a truck driver was
exempt from the FAA under § 1); Am. Postal Workers Union v.
United States Postal Serv., 823 F.2d 466, 473 (11th Cir. 1987)
(noting that courts have limited the § 1 exemption to “workers
actually engaged in interstate commerce, including bus drivers
and truck drivers” (internal quotation marks omitted)).
The FAA does not define the term “contract of employment.”
See 9 U.S.C. § 1. Although neither the Supreme Court nor the
First Circuit has directly addressed the issue, courts generally
agree that the § 1 exemption does not extend to independent
contractors. See, e.g., Carney v. JNJ Express, Inc., 10 F. Supp.
3d 848, 852-53 (W.D. Tenn. 2014) (“If the [plaintiffs] are
independent contractors, their claims are arbitrable under the
FAA.”); Villalpando v. Transguard Ins. Co. of Am., 17 F. Supp.
3d 969, 982 (N.D. Cal. 2014) (same); Port Drivers Fed’n 18, Inc.
v. All Saints, 757 F. Supp. 2d 463, 472 (D.N.J. 2011) (same);
Owner-Operator Indep. Drivers Ass’n v. Swift Transp. Co., 288 F.
Supp. 2d 1033, 1035-36 (D. Ariz. 2003) (same). This construction
comports well with “the FAA’s purpose of overcoming judicial
hostility to arbitration,” and the Supreme Court’s instruction
“that the § 1 exclusion provision be afforded a narrow
construction” in light of that purpose. Circuit City, 532 U.S.
at 118 (holding that § 1 only exempts employment contracts of

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transportation workers from the FAA’s reach, not all employment
contracts).3
II.

Analysis
Oliveira’s relationship with New Prime can be divided into

three periods of time: (1) March 2013 to May 2013, when Oliveira
worked for New Prime through the apprenticeship program and as a
B2 company driver trainee; (2) May 2013 to September 2014, when
Oliveira worked for New Prime under the two operating
agreements; and (3) post-October 2014, when New Prime rehired
Oliveira as a company driver.4 Under the statutory framework
discussed above, the FAA’s application to the present case
hinges on whether Oliveira had a contract of employment or an
independent contractor relationship with New Prime—and thus
falls within or outside the § 1 transportation worker exemption—
during each of these three time periods. New Prime appears to
concede that Oliveira was an employee in the first and third
time periods, and instead argues that the arbitration clause in
the operating agreements should extend retroactively and
prospectively to cover these intervals.
More specifically, New Prime maintains that Oliveira’s
claims from his time as an “employee driver” before signing the

3

The parties do not dispute that Oliveira was a transportation
worker under § 1. 
4 The parties do not specify when Oliveira’s relationship with
New Prime ended permanently.
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operating agreements, and after he was rehired as a company
driver, fall within the scope of the arbitration clause for two
reasons. Docket No. 51, at 7. First, Oliveira’s “allegations
related to his time as an employee are inextricably related to
his decision to become an independent contractor and enter into
the Agreements.” Id. Next, New Prime contends that the
arbitration clause “is very broad and clearly applies to ‘any
disputes as to the rights and obligations of the parties.’” Id.
(quoting Docket No. 36, Ex. A, at 10, Ex. B, at 9-10). New Prime
cites to Kristian v. Comcast Corp., 446 F.3d 25, 33-35 (1st Cir.
2006) for the proposition that an arbitration agreement can be
applied retroactively if broadly phrased to include claims or
disputes that arose prior to signing the agreement.5
At this stage in the proceeding, these arguments fail,
because they do not address the applicability of the § 1
transportation worker exemption. If Oliveira was an employee in
the first and third time periods, then the § 1 exemption applies
and the Court cannot order the parties to arbitrate any claims
that arose before Oliveira signed the operating agreements or
after New Prime rehired Oliveira as a company driver in October
2014. That said, the parties dispute whether Oliveira was an

5

New Prime does not cite, and the Court is not aware of, any
cases in which a court applied an arbitration agreement to
claims arising after termination of the contract containing the
arbitration clause.
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employee or independent contractor during at least the second
time period, and whether it is for the Court or the arbitrator
to decide the threshold question of the FAA’s applicability.
A. Gateway Questions of Arbitrability
The Supreme Court has repeatedly emphasized that
“arbitration is a matter of contract and a party cannot be
required to submit to arbitration any dispute which he has not
agreed so to submit.” Howsam v. Dean Witter Reynolds, Inc., 537
U.S. 79, 83 (2002); First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 942-43 (1995); Steelworkers v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582 (1960). Parties can agree to
allow arbitrators decide “gateway questions of arbitrability,
such as whether the parties have agreed to arbitrate or whether
their agreement covers a particular controversy.” Rent-A-Center,
561 U.S. at 68-69 (internal quotation marks and alterations
omitted). “An agreement to arbitrate a gateway issue is simply
an additional, antecedent agreement the party seeking
arbitration asks the federal court to enforce, and the FAA
operates on this additional arbitration agreement just as it
does on any other.” Id. at 69. An agreement granting the
arbitrator authority to decide threshold questions of
arbitrability is generally referred to as a “delegation
provision.” See id. at 68.

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Questions of arbitrability, however, are an exception to
the federal policy favoring arbitration agreements. Howsam, 537
U.S. at 83; Kristian, 446 F.3d at 37-38. “Courts should not
assume that the parties agreed to arbitrate arbitrability unless
there is clear and unmistakable evidence that they did so.”
First Options, 514 U.S. at 944 (internal quotation marks and
alterations omitted); see also Howsam, 537 U.S. at 83 (“The
question whether the parties have submitted a particular dispute
to arbitration, i.e., the question of arbitrability, is an issue
for judicial determination unless the parties clearly and
unmistakably provide otherwise.” (internal quotation marks and
alterations omitted)). In short, courts must enforce valid
delegation provisions under the FAA, but courts scrutinize
delegation clauses more closely to ensure the parties manifested
a clear intent to delegate questions of arbitrability to the
arbitrator.
Here, the parties do not contest that the two operating
agreements Oliveira signed on behalf of Hallmark Trucking LLC
contain valid delegation provisions. The contracts’ arbitration
clauses state in relevant part: “ANY DISPUTES AS TO THE RIGHTS
AND OBLIGATIONS OF THE PARTIES, INCLUDING THE ARBITRABILITY OF
DISPUTES BETWEEN THE PARTIES, SHALL BE FULLY RESOLVED BY
ARBITRATION . . .” Docket No. 36, Ex. A, at 10, Ex. B, at 9-10
(emphasis added). Furthermore, as New Prime emphasizes, the
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arbitration clauses also incorporate the Commercial Arbitration
Rules of the American Arbitration Association (AAA). Id. Ex. A,
at 10, Ex. B, at 9-10 (“ANY ARBITRATION BETWEEN THE PARTIES WILL
BE GOVERNED BY THE COMMERCIAL ABRITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION.”). The Rules provide that “[t]he
arbitrator shall have the power to rule on his or her own
jurisdiction, including any objections with respect to the
existence, scope, or validity of the arbitration agreement or to
the arbitrability of any claim or counterclaim.” Am. Arbitration
Ass’n Commercial Arbitration R. & Mediation P. R-7(a). Thus, the
parties have agreed to arbitrate gateway questions of
arbitrability.
Oliveira argues that the arbitration clauses, including the
delegation provisions, should not be enforced because the
operating agreements are substantively and procedurally
unconscionable. This argument fails, however, because Oliveira
seeks to invalidate the contracts as a whole rather than the
delegation provisions, or even the arbitration clauses,
specifically. See Rent-A-Center, 561 U.S. at 72 (“Accordingly,
unless Jackson challenged the delegation provision specifically,
we must treat it as valid under § 2, and must enforce it under
§§ 3 and 4, leaving any challenge to the validity of the
Agreement as a whole for the arbitrator.”); Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006) (“[A]
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challenge to the validity of the contract as a whole, and not
specifically to the arbitration clause, must go to the
arbitrator.”).
B. Applicability of the Transportation Worker Exemption
The delegation provisions and the AAA Rules do not resolve
this matter, because they cannot, and do not, address whether
the applicability of the § 1 transportation worker exemption is
a question of arbitrability that parties can legally delegate to
an arbitral forum in the first place. New Prime argues that the
exemption’s application is merely a gateway question of
arbitrability that the parties delegated to the arbitrator.
Oliveira maintains that “questions regarding statutory
exemptions to arbitration agreements” under the FAA, including
the § 1 exemption, are not questions of arbitrability at all,
but a threshold matter that courts must resolve before
considering a motion to compel. Docket No. 40, at 3.
Neither the First Circuit nor Supreme Court has answered
the central question in this case: does a district court have to
determine the applicability of the FAA § 1 exemption itself, or
is the exemption issue just another gateway question of
arbitrability that contracting parties may validly delegate to
an arbitrator? The Ninth Circuit has held that the “district
court must make an antecedent determination that a contract is
arbitrable under Section 1 of the FAA before ordering
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arbitration pursuant to Section 4.” In re Van Dusen, 654 F.3d
838, 843 (9th Cir. 2011). Meanwhile, the Eighth Circuit has
adopted the opposite viewpoint: it characterizes the
applicability of the § 1 exemption as a “threshold question of
arbitrability” that parties “can agree to have arbitrators
decide.” Green v. SuperShuttle Int’l, Inc., 653 F.3d 766, 769
(8th Cir. 2011). This Court finds the Ninth Circuit’s analysis
more persuasive and adopts its approach for the reasons that
follow.
In Green v. SuperShuttle International, Inc., current and
former airport shuttle bus drivers brought suit against
SuperShuttle “alleging violations of the Minnesota Fair Labor
Standards Act (MFLSA) arising from SuperShuttle’s alleged
misclassification of its drivers as franchisees rather than
employees.” Id. at 767. The bus drivers had all signed the same
franchise agreement that contained both an arbitration clause
and a delegation provision. Id. at 768. When SuperShuttle moved
to compel arbitration under the agreement and § 4 of the FAA,
Green—on behalf of all the drivers—argued that “the district
court lacked jurisdiction to compel arbitration because the FAA
exempts transportation workers.” Id. at 768-69.
The Eight Circuit held that the application of the § 1
transportation worker exemption “is a threshold question of
arbitrability in the dispute between Green and SuperShuttle.”
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Id. at 769. The court emphasized that the franchise agreements
“specifically incorporated the Rules of the American Arbitration
Association (AAA),” which “provide that an arbitrator has the
power to determine his or her own jurisdiction over a
controversy between the parties.” Id. at 769. The court
concluded that by incorporating the AAA Rules, “the parties
agreed to allow the arbitrator determine threshold questions of
arbitrability,” and “thus the district court did not err in
granting the motion to compel arbitration.” Id.
In contrast, when faced with an analogous scenario, the
Ninth Circuit analyzed whether the district court must assess
the applicability of the § 1 exemption before ordering
arbitration in detail. In In re Van Dusen, two interstate truck
drivers entered “independent contractor operating agreements”
with Swift Transportation Company. 654 F.3d at 840. The
agreements contained both an arbitration clause and a delegation
provision. Id. at 840-42. Despite these provisions, the
plaintiffs filed suit against Swift and Interstate Equipment
Leasing, Company in federal district court alleging violations
of the FLSA and of California and New York labor laws. Id.
The In re Van Dusen defendants moved to compel arbitration
pursuant to the arbitration clauses in the operating agreements,
and the plaintiffs retorted that the contracts were exempt from
arbitration under § 1 of the FAA. Id. The district court
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“declined to rule on the applicability of the exemption, holding
that the question of whether an employer/employee relationship
existed between the parties was a question for the arbitrator to
decide in the first instance.” Id. After the district court
denied certification for an interlocutory appeal, the plaintiffs
sought mandamus relief from the Ninth Circuit. Id.
The Ninth Circuit held6 that the applicability of the § 1
transportation worker exemption is not a question of
arbitrability that the parties may delegate to an arbitrator.
Id. at 843-45. The court explained that because a “district
court’s authority to compel arbitration arises under Section 4
of the FAA,” a district court “has no authority to compel
arbitration under Section 4 where Section 1 exempts the
underlying contract from the FAA’s provisions.” Id. at 843.
“Section 4 has simply no applicability where Section 1 exempts a
contract from the FAA, and private parties cannot, through the
insertion of a delegation clause, confer authority upon a
district court that Congress chose to withhold.” Id. at 844. The
court emphasized that “whatever the contracting parties may or
may not have agreed upon is a distinct inquiry from whether the

6

Actually, the Ninth Circuit denied mandamus because the
district court’s decision was not clearly erroneous under the
stringent standard for a writ of mandamus. Id. at 845-46.
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FAA confers authority on the district court to compel
arbitration.” Id.
As the Ninth Circuit highlighted, its holding is consistent
with the Supreme Court’s decision in Bernhardt v. Polygraphic
Co. of America, 350 U.S. 198 (1956). See In re Van Dusen, 654
F.3d at 844 (citing Bernhardt, 350 U.S. at 201-02). In
Bernhardt, the Supreme Court held that a district court lacked
authority to stay litigation pending arbitration under § 3 of
the FAA where the underlying contract containing the arbitration
agreement did not evidence a “transaction involving commerce”
within §§ 1 and 2 of the Act. Bernhardt, 350 U.S. at 201-02. The
In re Van Dusen court concluded that this reasoning regarding
the relationship between Sections 1, 2, and 3 of the Act
“applies with equal force in interpreting the relationship
between Sections 1, 2, and 4 of the FAA.” In re Van Dusen, 654
F.3d at 844. Based on this analysis, this Court holds that the
question of whether the § 1 exemption applies is for the Court,
and not the arbitrator, to decide.
New Prime argues that the arbitrator must decide whether
the § 1 exemption applies because otherwise the Court would
address the merits of the underlying dispute. More specifically,
New Prime maintains that “the issue of whether the Plaintiff was
an independent contractor or an employee is plainly entangled in
the merits of Plaintiff’s underlying claims arising out of his
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alleged misclassification.” Docket No. 51, at 6. On a second
appeal in the Van Dusen case,7 the Ninth Circuit rejected a
similar argument, stressing that its prior opinion “expressly
held that a district court must determine whether an agreement
for arbitration is exempt from arbitration under § 1 of the
[FAA] as a threshold matter.” Id. The Ninth Circuit directed the
district court to “determine whether the Contractor Agreements
between each appellant and Swift are exempt under § 1 of the
FAA” before considering Swift’s motion to compel on remand. Id.
Thus, this Court must keep on trucking in the present case to
determine whether the two operating agreements Oliveira signed
on behalf of Hallmark Trucking LLC are contracts of employment
within the § 1 exemption.
ORDER
The defendant’s motion to compel arbitration and stay
proceedings, and/or dismiss the case for improper venue, or, in
the alternative, to dismiss Count III for failure to state a
claim (Docket No. 35) is DENIED without prejudice. The parties

7

After the Ninth Circuit denied the writ of mandamus, the
plaintiffs moved “for reconsideration of the grant of Swift
Transportation Co. Inc.’s motion to compel arbitration.” Van
Dusen v. Swift Transp. Co., Inc., 544 Fed. App’x 724, 724. The
district court denied the motion for reconsideration, but
certified a request for an interlocutory appeal. Van Dusen v.
Swift Transp. Co., No. 2:10-CV-00899 JWS, 2011 WL 3924831, at *3
(D. Ariz. Sept. 7, 2011).

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may conduct factual discovery on the threshold question of the
plaintiff’s status as an employee or independent contractor
until January 8, 2016. Any motions for summary judgment shall be
filed by January 22, 2016.

/s/ PATTI B. SARIS
Patti B. Saris
Chief United States District Judge

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