Amicus Curiae Brief — New Prime Inc., Petitioner v. Dominic Oliveira

No. 17-340

In the Supreme Court of the United States

_________________

NEW PRIME, INC.,

Petitioner,

v.

DOMINIC OLIVEIRA,

Respondent.

_______________

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT

_______________

BRIEF OF MASSACHUSETTS, CALIFORNIA,

CONNECTICUT, THE DISTRICT OF COLUMBIA,

ILLINOIS, MARYLAND, MINNESOTA, NEW

JERSEY, NEW YORK, NORTH CAROLINA,

OREGON, PENNSYLVANIA, VERMONT, VIRGINIA,

AND WASHINGTON AS AMICI CURIAE IN

SUPPORT OF RESPONDENT

_______________

MAURA HEALEY,

Attorney General

Commonwealth of Massachusetts

Karla E. Zarbo*

Assistant Attorney General

One Ashburton Place

Boston, MA 02108

karla.zarbo@state.ma.us

(617) 727-2200

*Counsel of Record

(Additional counsel are listed on signature page.)

i

TABLE OF CONTENTS

Page

INTERESTS OF AMICI CURIAE ........................... 1

SUMMARY OF ARGUMENT .................................. 5

ARGUMENT ............................................................. 7

Section 1 exempts truck drivers from the FAA

regardless of whether they are employees or

independent contractors. .................................... 7

A. The Congress that enacted the FAA

would have understood the phrase “class

of workers” in Section 1 to include

independent truck drivers ............................ 9

B. Congress exempted certain workers from

the FAA because it wished to “reserv[e]

for itself more specific legislation for

those engaged in transportation”—

including independent truck drivers ......... 13

CONCLUSION ....................................................... 22

ii

TABLE OF AUTHORITIES

Cases

Page

Alexander v. FedEx Ground Package Sys., Inc.,

765 F. 3d 981 (9th Cir. 2014) ........................ 2

Am. Trucking Ass’ns, Inc. v. United States, 344

U.S. 298 (1953) ........................... 15, 17-18, 19

Amero v. Townsend Oil, 2008 WL 5609064

(Mass. Super. Ct. Dec. 3, 2008) .................... 2

Anderson v. Homedeliveryamerica.com, Inc.,

2013 WL 6860745 (D. Mass. Dec. 30,

2013) .............................................................. 2

Chebotnikov v. LimoLink, Inc., 150 F. Supp. 3d

128 (D. Mass. 2015) ....................................... 3

Circuit City Stores, Inc. v. Adams, 532 U.S.

105 (2001) ............................................ passim

Dynamex Operations W., Inc. v. Superior

Court, 416 P. 3d 1 (Cal. 2018) ...................... 2

Espinal v. Bob’s Discount Furniture, LLC,

2018 WL 2278106 (D.N.J. May 18, 2018)

........................................................................ 3

Global Van Lines, Inc. v. ICC, 627 F. 2d 546

(D.C. Cir. 1980) .............................................. 4

iii

Hayes v. XPO Last Mile, Inc., 2017 WL

4900387 (W.D. Mich. Aug. 21, 2017) ............. 3

Martins v. 3PD, Inc., 2013 WL 1320454 (D.

Mass. Mar. 28, 2013) .................................... 2

Montoya v. CRST Expedited, Inc., 2018 WL

627372 (D. Mass. Jan. 30, 2018) ................... 3

Morales v. Daley, 116 F. Supp. 2d 801 (S.D.

Tex. 2000) .................................................... 10

Maurer v. Hamilton, 309 U.S. 598 (1940) ...... 14, 15

Ouadani v. TF Final Mile, LLC, 876 F. 3d 31

(1st Cir. 2017) ................................................ 3

Owner-Operator Indep. Drivers Ass’n, Inc. v.

New Prime, Inc., 398 F. 3d 1067 (8th

Cir. 2005) ....................................................... 4

Owner-Operator Indep. Drivers Ass’n, Inc. v.

Swift Transp. Co., 632 F. 3d 1111 (9th

Cir. 2011) ..................................................... 19

Taylor v. Shippers Transp. Express, Inc., 2014

WL 7499046 (C.D. Cal. Sept. 30, 2014) ........ 2

Thomson v. United States, 321 U.S. 19 (1944) ..... 18

United States v. Am. Trucking Ass’ns, 310 U.S.

534 (1940) .................................................... 20

iv

United States v. W.M. Webb, Inc., 397 U.S. 179

(1970) ........................................................... 11

Valadez v. CSX Intermodal Terminals, Inc.,

2017 WL 1416883 (N.D. Cal. April 10,

2017) .............................................................. 2

White v. Excalibur Ins. Co., 599 F. 2d 50 (5th

Cir. 1979) ..................................................... 21

Wisconsin Cent. Ltd. v. United States, 585 U.S.

__, 2018 WL 3058014 (June 21, 2018) .... 7, 13

Statutes and Regulations

Civil Aeronautics Act of 1938, Pub. L. 75-706,

52 Stat. 973 ................................................. 20

Federal Arbitration Act of 1925, Pub. L. 68401, 43 Stat. 883 ................................. passim

Hours of Service Act of 1907, Pub. L. 59-274,

34 Stat. 1415 ............................................... 20

Interstate Commerce Commission Termination

Act of 1995, Pub. L. 104-88, 109 Stat.

803 .................................................................. 4

Motor Carrier Act of 1935, Pub. L. 74-255, 49

Stat. 543 ..................... 6, 14, 15, 16, 18, 20, 21

Railway Labor Act, Pub. L. 73-442, 48 Stat.

1185 (1934) ................................................... 12

v

Railway Labor Act, Pub. L. 74-487, 49 Stat.

1189 (1936) .................................................. 14

Seamen’s Act of 1915, Pub. L. 63-302, 38 Stat.

1164 ............................................................. 20

Shipping Commissioners Act of 1872, 17 Stat.

262 ................................................................ 13

Transportation Act of 1920, Pub. L. 66-152, 41

Stat. 456 ....................................................... 13

1 Fed. Reg. 619 (June 20, 1936) ............................ 18

1 Fed. Reg. 735 (July 8, 1936) ............................... 20

13 Fed. Reg. 359 (Jan. 27, 1948) ........................... 19

9 U.S.C. § 1 ..................................................... passim

45 U.S.C. § 152 (1934) ........................................... 12

45 U.S.C. §§ 61-64 (1907) ...................................... 20

45 U.S.C. §§ 181-188 (1936) .................................. 14

49 U.S.C. § 304 (1956) ........................................... 20

49 U.S.C. § 11107 (1982) ....................................... 20

49 U.S.C. § 14102 (1995) ........................................ 20

49 U.S.C. § 14704 (1995) .................................... 4, 20

49 U.S.C. §§ 21101-21108 (1994) ........................... 20

vi

49 C.F.R. § 376.12 (1980) ........................................ 4

Miscellaneous

86 Cong. Rec. (1940) .............................................. 18

Harold Barger, National Bureau of Economic

Research, The Transportation

Industries, 1889-1946: A Study of

Output, Employment, and Productivity,

Appendix F: Highways—The Motor

Trucking Industry (1951) ...................... 16-17

Committee on Ways & Means, H. Rep. 95-1748

(1978) ........................................................... 11

Columbia Terminals Co., 18 M.C.C. 662 (1939)

...................................................................... 19

Alexander Colvin, Economic Policy Institute,

The Growing Use of Mandatory

Arbitration (April 6, 2018) ..................... 2-3, 3

Consol. Trucking, Inc., 41 M.C.C. 737 (1943) ....... 19

Paul Stephen Dempsey, Transportation: A

Legal History, 30 Transp. L.J. 235

(2003) ................................................ 14, 16, 17

Eastman, Regulation of Transportation

Agencies, Second Report of the Federal

Coordinator of Transportation, S. Doc.

No. 152, 73rd Cong. 2d Sess. (1934) ........... 16

vii

Federal Regulation of Trucking: The Emerging

Critique, 63 Colum. L. Rev. 460 (1963)

................................................................. 15-16

John J. George, Federal Motor Carrier Act of

1935, 21 Cornell L. Rev. 249 (1936) ....... 14-15

Douglas C. Grawe, Have Truck, Will Drive:

The Trucking Industry and the Use of

Independent Owner-Operators Over

Time, Vol 35:2 Transp. L. J. 116 (Sept.

2008) ............................................................ 19

Leberstein and Ruckelshaus, National

Employment Law Project, Independent

Contractor vs. Employee: Why

independent contractor misclassification

matters and what we can do to stop it

(May 2016) ..................................................... 2

National Employment Law Project,

Independent Contractor

Misclassification Imposes Huge Costs on

Workers and Federal and State

Treasuries (July 2015) .................................. 1

Hearing on H.R. No. 11019, 62nd Cong., 1st

Sess. (1911) ................................................. 12

Hearing on H.R. No. 11133, 70th Cong., 1st

Sess. (1928) ................................................. 12

viii

Hearings on H.R. 5262 and H.R. 6016 before a

Subcommittee of the House Committee

on Interstate and Foreign Commerce,

74th Cong. 1st Sess. (1935) ......................... 16

H.R. No. 388, 62nd Cong. 2d Sess. (1912) ............ 12

Senate Committee Hearings on Interstate

Commerce, on S. 1629, S. 1632, and S.

1635, 74th Cong., 1st Sess. (1935) ........ 16, 17

S. Rep. No. 1669, 81st Cong., 2d Sess. (1950) ....... 11

Truck Leasing under the Motor Carrier Act:

The Owner-Operator and the ICC, 30 U.

Chi. L. Rev. 358 (1963) ............................... 19

U. S. Dep’t of Commerce, Fifteenth Bureau of

the Census, Instructions to

Enumerators (1930) ..................................... 10

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Bull. No. 817 (Feb. 1945) ........... 10

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Bull. No. 968 (May 1949) ........... 10

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Economic News Release,

Table A-8 (May 4, 2018) .............................. 11

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Monthly Labor Rev., Vol. 15,

No. 3 (Sept. 1922) ........................................ 10

ix

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Monthly Labor Rev., Vol. 16,

No. 6 (June 1923) ........................................ 10

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Monthly Labor Rev., Vol. 34,

No. 1 (Jan. 1932) ......................................... 10

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Monthly Labor Rev., Vol. 34,

No. 3 (Mar. 1932) ........................................ 10

U. S. Dep’t of Labor, Bureau of Labor

Statistics, Monthly Labor Rev., Vol. 35,

No. 1 (July-Dec. 1932) ................................. 10

U. S. Dep’t of Labor, Wage & Hour Division,

Misclassification of Employees as

Independent Contractors (July 17, 2018) ..... 1

1

INTERESTS OF AMICI CURIAE

State amici enforce laws that protect the public

interest, including those that set fair labor standards

and promote the health and safety of all working

people. We also share a responsibility to protect

workers who are susceptible to exploitation, and to

foster a level playing field for businesses who abide

by the laws. Employees who are misclassified as

independent contractors are often denied many basic

workplace protections and benefits that they are

entitled to receive—and employers who fail to

properly classify and pay their workers gain an

unfair competitive advantage by avoiding payroll

costs including tax contributions to federal and state

governments. 1 As the U.S. Department of Labor

explains, “[e]mployee misclassification generates

substantial losses to the federal government and

state governments in the form of lower tax revenues,

as well as to state unemployment insurance and

workers’ compensation funds.” U. S. Department of

Labor, Wage & Hour Division, Misclassification of

Employees

as

Independent

Contractors,

https://www.dol.gov/whd/

workers/misclassification (July 17, 2018).

We have taken steps to combat employment

misclassification and its resulting harms. However,

because States have limited resources, we rely on

individual employees to supplement our efforts

1 See, e.g., National Employment Law Project, Independent

Contractor Misclassification Imposes Huge Costs on Workers

and Federal and State Treasuries (July 2015) at 2-6,

https://www.nelp.org/wp-content/uploads/IndependentContractor-Costs.pdf.

2

through private enforcement actions.

Amici

accordingly recognize that workers must have a

meaningful role in vindicating their own rights and

ensuring compliance in the business community, not

only to protect themselves, but also to expand

enforcement of workplace protections across entire

industries.

Employment

misclassification

has

become

particularly prevalent among drivers in the

transportation industry. 2 For decades, businesses in

the transportation sector (among others) have

imposed “take-it-or-leave-it” independent contractor

agreements with mandatory arbitration provisions on

their workers 3—more than half of the companies in

this sector now require them. 4

And many

2 See,

e.g., Alexander v. FedEx Ground Package Sys., Inc.,

765 F.3d 981 (9th Cir. 2014); Valadez v. CSX Intermodal

Terminals, Inc., 2017 WL 1416883 (N.D. Cal. April 10, 2017);

Taylor v. Shippers Transp. Express, Inc., 2014 WL

7499046 (C.D.

Cal.

Sept.

30,

2014);

Anderson

v.

Homedeliveryamerica.com, Inc., 2013 WL 6860745 (D. Mass.

Dec. 30, 2013); Martins v. 3PD, Inc., 2013 WL 1320454 (D.

Mass. Mar. 28, 2013); Dynamex Operations W., Inc. v. Superior

Court, 416 P.3d 1 (Cal. 2018); Amero v. Townsend Oil, 2008 WL

5609064 (Mass. Super. Ct. Dec. 3, 2008).

3 See Leberstein and Ruckelshaus, National Employment

Law Project, Independent Contractor vs. Employee:

Why

independent contractor misclassification matters and what we

can do to stop it (May 2016), https://nelp.org/content/uploads/

Policy-Brief-Independent-Contractor-vs-Employee.pdf.

See Alexander Colvin, Economic Policy Institute, The

Growing Use of Mandatory Arbitration, at 1, 3, 8 (April 6, 2018),

https://www.epi.org/publication/the-growing-use-of-mandatory4

3

transportation companies engage in exploitative

labor practices while at the same time using

mandatory

arbitration

agreements

with

unreasonable forum selection clauses to attempt to

prevent their misclassified drivers from pursuing

otherwise available legal remedies. 5 As workers are

increasingly forced to submit their employment

disputes to arbitration, overall claim volume has

significantly decreased and the few claims brought

are removed from public view. 6 This hampers the

effectiveness

of

States’

enforcement

efforts.

Accordingly, amici have a strong interest in ensuring

arbitration-access-to-the-courts-is-now-barred-for-more-than60-million-american-workers/.

See, e.g., Montoya v. CRST Expedited, Inc., 2018 WL

627372 (D. Mass. Jan. 30, 2018) (striking forum selection clause

requiring litigation in Iowa for unpaid-wage putative class

action by Massachusetts-residing truck driver); Chebotnikov v.

LimoLink, Inc., 150 F. Supp. 3d 128 (D. Mass. 2015) (denying

employer’s motion to dismiss misclassification-wage action on

venue grounds, where Massachusetts chauffeurs’ independent

contractor arbitration agreements specified Iowa as forum).

Oftentimes drivers are not even signatories to these

agreements. See, e.g., Ouadani v. TF Final Mile, LLC, 876 F.3d

31 (1st Cir. 2017) (arbitration clause unenforceable in wage and

hour class action, where drivers, paid through a subcontractor,

were not actually parties to, nor even knew of, the arbitration

agreement between subcontractor and putative employer);

Espinal v. Bob’s Discount Furniture, LLC, 2018 WL 2278106

(D.N.J. May 18, 2018) (same); Hayes v. XPO Last Mile, Inc.,

2017 WL 4900387 (W.D. Mich. Aug. 21, 2017) (denying motion

to compel individual arbitration where drivers were nonsignatories).

5

6 The Growing Use of Mandatory Arbitration, supra n.4, at

11, 12.

4

that workers not subject to compulsory arbitration

have the ability to bring their claims in court.

Now, in a new variant on this unfortunate trend,

Petitioner New Prime, Inc. (“New Prime”) argues

that only “employees” in the transportation industry

may avail themselves of the exemption Congress

specifically extended to all transportation “workers”

in Section 1 of the Federal Arbitration Act (FAA).

Yet, just like traditional employees, many of the

nation’s independent truck drivers have experienced

abusive economic practices at the hands of large

motor carriers. See Global Van Lines, Inc. v. ICC,

627 F.2d 546, 547-58 (D.C. Cir. 1980).

Indeed, although Congress formerly provided

drivers with an administrative dispute resolution

process to address their claims, Congress

subsequently replaced that process in recognition of

the disparities in the bargaining positions between

motor carriers and truck drivers.

See OwnerOperator Indep. Drivers Ass’n, Inc. v. New Prime,

Inc., 398 F. 3d 1067, 1070 (8th Cir. 2005). In 1995,

Congress expressly gave truck drivers the right to

bring private civil actions in court for certain

violations of the Truth–in–Leasing Act and its

regulations.

Interstate Commerce Commission

Termination Act of 1995, Pub. L. 104–88, 109 Stat.

803; 49 U.S.C. § 14704. This private right of action

applies

to

owner-operators

and

traditional

“employees” alike. 49 C.F.R. § 376.12(c)(1), (4). New

Prime’s theory would deprive not only true owneroperators, but also employees who have been

misclassified as independent contractors, of their

rights under that statute.

5

New Prime’s position is thus at odds with the

FAA’s “worker”-protecting text, and, if accepted,

would harm the interests of amici in seeing extensive

private enforcement of both state and federal

workplace protection laws. It was for Congress to

decide when arbitration agreements should be

enforced and who should be able to seek redress in

court, and Congress chose to exempt transportation

workers from the scope of the Act. State amici have

an interest in seeing that transportation sector

workers such as Respondent Dominic Oliveira get

their day in court, as Congress intended.

SUMMARY OF ARGUMENT

The language of the FAA’s transportation workers

exemption excludes interstate truck drivers from the

FAA’s scope—regardless of whether they are

employees or independent owner-operators. This

conclusion becomes especially clear in light of the

history surrounding Congress’s regulation of leases

between independent truck drivers and authorized

motor carriers.

A. When Congress passed the FAA in 1925,

the phrase “class of workers” appearing in Section 1’s

transportation exemption was commonly understood

to include both employees and independent

contractors. That phrase has continually been used

by several federal agencies to signify categories of

workers based on their income source, including the

self-employed, i.e., independent contractors working

on their “own account,” as well as traditional hourly

and salaried employees. This meaning is consistent

6

with the reality of the trucking industry at that time

(and now): an industry comprised of both employees

and independent owner-operator truck drivers—and

more of the latter than the former. Moreover, if

Congress had wanted to limit the transportation

exemption only to conventional employer-employee

relationships, it could easily have done so by simply

repeating the word “employee” in Section 1’s residual

clause. Instead, as written, the FAA’s transportation

exemption applies to all interstate truck drivers—

regardless of whether they are classified as

employees or independent contractors.

B. Congress chose to exempt transportation

workers from the FAA to avoid conflicts with either

existing or developing statutory dispute resolution

mechanisms. See Circuit City Stores, Inc. v. Adams,

532 U.S. 105, 121 (2001). And, by passing the Motor

Carrier Act of 1935, Pub. L. 74-255, 49 Stat. 543,

Congress began its regulation of the emerging

trucking industry, including an administrative

dispute resolution process similar to legislation

Congress adopted for interstate transport by water,

rail, and air.

But, unlike the other regulated

transportation sectors, the interstate trucking

industry was mostly composed of independent truck

drivers—known as “owner operators”—rather than

conventional employees. Congress recognized this

distinction by expressly regulating the relationships

between for-hire carriers and owner-operators. In

other words, as this Court recognized in Circuit City,

Congress would act soon after passing the FAA to

regulate other transportation workers beyond those

spelled out in Section 1—and it did so in 1935 for

7

truckers,

including

independent

contractors.

Accordingly, independent drivers who contract with

trucking firms, such as through the leases at issue

here between New Prime and Oliveira, are excluded

from the FAA.

ARGUMENT

Section 1 exempts truck drivers from the FAA

regardless of whether they are employees or

independent contractors.

Statutory interpretation is always to some extent

a historical inquiry. This Court recently reaffirmed

the “fundamental canon of statutory construction

that words generally should be interpreted as taking

their ordinary, contemporary, common meaning ... at

the time Congress enacted the statute.” Wisconsin

Cent. Ltd. v. United States, 585 U.S. __, 2018 WL

3058014, at *6 (June 21, 2018) (citation and internal

quotation marks omitted). With respect to the FAA,

history is relevant in a second way: this Court in

Circuit City Stores, Inc. v. Adams, 532 U.S. 105

(2001), looked to the nature and extent of

congressional regulation of the existing and emerging

transportation industries near the time of the FAA’s

enactment to inform the Court’s interpretation of the

Section 1 exemption. Both historical inquiries lead to

the conclusion that with respect to truck drivers,

Congress meant to exempt from the FAA employees

and independent contractors.

The FAA excludes from its scope “contracts of

employment” of any “class of workers” in interstate

transportation. 9 U.S.C. § 1; see Circuit City, 532

8

U.S. at 109 (interpreting Section 1’s exemption as

“confine[d] . . .to transportation workers”). Congress

thus stated a clear policy that federal courts may not

require such “workers” in the transportation sector to

arbitrate their disputes. New Prime seeks to undo

Congress’s policy choice in two ways: by allowing an

arbitrator to decide the scope of the exemption in the

first instance, and by preventing truck drivers

treated as independent contractors from invoking it.

Both of New Prime’s arguments are foreclosed by

the FAA’s plain language, read in its proper

historical context.

Amici agree with Oliveira’s

compelling argument on the first question presented,

see Resp. Br. 15-23, and will not repeat it. On the

second, amici here show that, at the time of the

FAA’s enactment, Congress would have understood

the term “class of workers” to include both employees

and independent contractors, thus indicating that the

exemption applies to both types of transportation

workers. Moreover, soon after the FAA’s enactment,

Congress began considering legislation covering

conditions in the emerging trucking industry. This

Court recognized in Circuit City that Congress

wanted to exclude transportation workers from the

FAA so as not to interfere with “established or

developing dispute resolution” legislation affecting

these “specific workers.” 532 U.S. at 121. As

explained below, the trucking industry meets that

description: Congress repeatedly considered and

finally enacted legislation that applies to both

independent

contractors

and

employees,

demonstrating the full scope of “workers” in the

industry exempted from the FAA.

9

A.

The Congress that enacted the FAA

would have understood the phrase

“class of workers” in Section 1 to

include independent truck drivers.

Section 1 excludes from the FAA’s coverage

“contracts of employment of seamen, railroad

employees, or any other class of workers engaged in

foreign or interstate commerce.”

9 U.S.C. § 1

(emphasis added). As Oliveira convincingly shows,

the Congress that enacted the FAA would have

understood the term “contracts of employment” to

mean “agreements to perform work”—a phrase that

readily encompasses agreements with independent

contractors. See Resp. Br. 23-31, 37. The historical

understanding of the term “class of workers” in

Section 1’s residual clause is equally clear, and

equally supportive of Oliveira.

Had Congress

intended to limit the residual clause to conventional

employer-employee relationships, it could easily have

done so in terms that were widely used at the time.

Instead, as written, the FAA transportation workers

exemption applies to all interstate truck drivers—

including independent owner-operators.

Although the FAA does not define it, the phrase

“class of workers” has been in continual use since as

early as 1910 by several federal agencies to signify

various categories of workers—including those

working as independent contractors. For example,

the Census Bureau required its enumerators to place

individuals into a “class of worker” category,

including traditional employees, unpaid family

workers, and self-employed persons “[w]orking on

10

own account” (referred to as “independent workers”).

See U.S. Dep’t of Commerce, Fifteenth Bureau of the

Census, Instructions to Enumerators, at 37-38 (1930)

(instructions

regarding

“class

of

worker”),

https://www.census.gov/history/pdf/

1930instructions.pdf; Morales v. Daley, 116 F. Supp.

2d 801, 808 (S.D. Tex. 2000) (noting that “[q]uestions

on the class of worker, that is, type of employment,

whether private, governmental, self employed [sic],

or working as an unpaid family worker, have

appeared on the census form since 1910”).

The phrase “class of worker” has also long been

used by the U.S. Department of Labor’s Bureau of

Labor Statistics to encompass both employees and

independent contractors. See, e.g., Bureau of Labor

Statistics, Bull. No. 817 at pp. 8, 10, 12-13, 15, 19, 32

(Feb. 1945) (making “class of worker” comparisons

between hourly/salaried workers and self-employed

“own-account workers,” based on census data from

1940), https://lccn.loc.gov/l45000048; Bull. No. 968 at

p. 75 (May 1949) (reporting on self-employed

independent consultants), https://fraser.stlouisfed.

org/files/docs/publications/bls/bls_0968_1950.pdf. 7

7

The Bureau of Labor Statistics also used this phrase

around the time of the passage of the FAA when making

comparisons between skilled and unskilled groups of workers

within the same or similar industries, without distinguishing

between employees and independent contractors in that context.

See, e.g., BLS Monthly Labor Rev., Vol. 15, No. 3 at p. 129 (Sept.

1922); Monthly Labor Rev., Vol. 16, No. 6 at p. 131 (June 1923);

Monthly Labor Rev., Vol. 34, No. 1 at p. 179 (Jan. 1932);

Monthly Labor Rev., Vol. 34, No. 3 at pp. 669-670 (Mar. 1932);

Monthly Labor Rev., Vol. 35 at p. 1300 (July-Dec. 1932).

11

Cf. Bureau of Labor Statistics, Economic News

Release, Table A-8, “Employed persons by class of

worker and part-time status,” (May 4, 2018)

(categorizing workers by wage and salary,

unincorporated

self-employed,

unpaid

family

workers, government, private industries, and private

households), https://www.bls.gov/news.release/

empsit.t08.htm. 8 Thus, at the time it enacted the

FAA, Congress would have understood the phrase

“class of workers” to include independent contractors.

Had Congress intended to limit Section 1’s

residual clause only to traditional common law

employer-employee relationships, it would likely

have chosen more specific language to do so. For

example, Congress could easily have written the

clause to exempt “contracts of employment of

seamen, railroad employees, or any other class of

employees engaged in foreign or interstate

commerce.”

That phrasing would have made

grammatical sense and would have been perfectly

consistent with contemporary usage. Indeed, after

8 The same meaning for the phrase has also been used in

the context of categorizing workers for federal employment tax

purposes. See Committee on Ways & Means, H. Rep. 95-1748,

at 3 (1978), 1978-3 C.B. (Vol. 1) at 631 (explaining that “the

classification of particular workers or classes of workers as

employees or independent contractors (self-employed persons)

for purposes of Federal employment taxes must be made under

common law rules”). And this Court used the phrase in

referring to the Social Security Act Amendments of 1950, which

“extend[ed] coverage to specified classes of workers irrespective

of their common-law status.” United States v. W.M. Webb, Inc.,

397 U.S. 179, 186 n.12 (1970) (emphasis added) (citing S. Rep.

1669, 81st Cong., 2d Sess. (1950), 1950–2 C.B. 302, 346–347).

12

enacting the FAA, Congress used the phrase “class of

employees”

in

another

transportation-related

context—the Railway Labor Act, 45 U.S.C. § 152,

Fourth (as amended by Act of June 21, 1934, Pub. L.

73-442, 48 Stat. 1185)—to refer to collective

bargaining groups for related occupational categories

of employees: “The majority of any craft or class of

employees shall have the right to determine who shall

be the representative of the craft or class for the

purposes of this [Act].”

Id. (emphasis added).

Congress also—both before and after the FAA’s

enactment—used the phrase “class of employees”

when comparing employees within similar industries,

occupations, or employing units. See, e.g., Hearing

on H.R. No. 11019, 62nd Cong., 1st Sess., 2060 (1911)

(using “class of employee” as the title for occupational

wage comparison chart); H.R. No. 388, 62nd Cong.,

2d Sess., 5199 (1912) (using “class of employees” in

reference to mail clerks, letter carriers, and other

postal employees); Hearing on H.R. No. 11133, 70th

Cong., 1st Sess., 3380 (1928) (using phrase “class of

employees” in summary chart comparing pension and

retirement laws for police, fire fighters, and civil

clerks).

The Congress that enacted the FAA selected the

phrase “class of workers” rather than limiting

Section 1’s residual clause to employees. As this

evidence shows, Congress would have understood the

phrase to include both traditional employees and selfemployed independent truck drivers. This Court, too,

should follow the phrase’s “ordinary, contemporary,

common meaning ... at the time Congress enacted the

13

statute,” Wisconsin Cent., 585 U.S. at __, 2018 WL

3058014, at *6, in interpreting Section 1.

B.

Congress exempted certain workers

from the FAA because it wished to

“reserv[e] for itself more specific

legislation for those engaged in

transportation”—including

independent truck drivers.

The regulatory development of the nation’s

interstate transportation sectors further supports the

statutory construction described above. Similar to

legislation Congress adopted for interstate transport

by water, rail, and air, Congress also created an

administrative dispute resolution process for the

trucking industry.

In Circuit City Stores, Inc. v. Adams, 532 U.S. 105

(2001), this Court looked to “Congress’ demonstrated

concern with transportation workers and their

necessary role in the free flow of goods” as the basis

for its interpretation of the Section 1 exemption. 532

U.S. at 121. The Court noted that federal regulation

of grievance procedures for seamen and railroad

employees—the two types of workers specifically

referenced in Section 1—already “existed” when

Congress enacted the FAA in 1925. Id. (citing the

Shipping Commissioners Act of 1872, 17 Stat. 262,

and the Transportation Act of 1920, §§ 300-316, Pub.

L. 66-152, 41 Stat. 456). The Court thus inferred

that Congress exempted such employees from the

FAA “for the simple reason that it did not wish to

unsettle established or developing statutory dispute

resolution schemes covering specific workers.” Id. at

14

121. The Court then explained the residual clause by

noting that specific legislation for transportation

workers other than the “two specific, enumerated

types” in Section 1 “was soon to follow,” citing as an

example “the amendment of the Railway Labor Act in

1936 to include air carriers and their employees.” Id.

(citing Pub. L. 74-487, 49 Stat. 1189, 45 U.S.C. §§

181-188). The Court concluded that “[i]t would be

rational for Congress to ensure that workers in

general would be covered by the provisions of the

FAA, while reserving for itself more specific

legislation for those engaged in transportation”—

even those working in transportation fields not yet

covered by federal legislation. Id.

Just as the air carrier sector was emerging when

the FAA was enacted, so too was the trucking

industry. Shortly after the FAA’s passage, Congress

began contemplating “more specific legislation” to

address the emerging trucking industry through

what ultimately became the Motor Carrier Act of

1935 (MCA), Pub. L. 74-255, 49 Stat. 543,

https://www.loc. gov/law/help/statutes-at-large/74thcongress/session-1/c74s1ch498.pdf. Through the first

several decades of the twentieth century, the nation’s

trucking system was “rapidly changing,” Maurer v.

Hamilton, 309 U.S. 598, 615 (1940). Improved

roadways, as well as mechanical inventions such the

pneumatic tire and the internal combustion engine,

brought “sensational growth to the industry.” Paul

Stephen Dempsey, Transportation: A Legal History,

30 Transp. L.J. 235, 274 (2003).

Before long,

Congress recognized that it needed to regulate this

expanding transportation sector. See John J. George,

Federal Motor Carrier Act of 1935, 21 Cornell L. Rev.

15

249, 251 (1936). 9 Proposals for federal regulation

emerged in 1926, shortly after the FAA’s passage,

and were introduced each session, id. at 251-52, until

1935, when Congress passed the Motor Carrier Act.

Congress thus undertook a similar path in the

regulation of the trucking industry as it had with

other interstate transportation sectors.

The MCA was Congress’s first regulation of

interstate commercial motor vehicle traffic. At that

time, truck drivers were predominantly small

independent owner-operators who often contracted

with motor carriers through leasing arrangements.

See, e.g., Am. Trucking Ass’ns, Inc. v. United States,

344 U.S. 298, 303-304, 312 (1953). Through the

MCA, Congress sought to oversee this new form of

interstate traffic “whose regulatory problems bear

little resemblance” to other systems of transportation

previously subjected to Congressional control, and

that presented challenges “far exceeding those of any

earlier regulations of interstate commerce.” Maurer,

309 U.S. at 604. Indeed, although jurisdiction over

the motor carrier industry was given to the ICC—the

same agency responsible for regulating the

railroads—the two transportation industries “could

hardly have been more dissimilar.”

Federal

Regulation of Trucking: The Emerging Critique, 63

Among the forces prompting congressional action were

“the magnitude of interstate motor transportation, inability of

the states to control it adequately, the resulting injurious effects

of unregulated interstate motor activity on regulated intrastate

operation, on railroads, their employees, and shippers, on

highway taxpayer-users, and on the increasing urgency of

problems of public safety on the highways.” Id.

9

16

Colum. L. Rev. 460, 468 (1963). Distinctions between

them were mainly due to significant differences in

start-up costs, which directly affected competition:

the railroad system was dominated by only a few

large companies due to the expense needed to gain

entry, but the trucking industry was made up of

many thousands of small firms owing to the minor

initial investment required. 10 Id. (citing Eastman,

Regulation of Transportation Agencies, Second Report

of the Federal Coordinator of Transportation, S. Doc.

No. 152, 73rd Cong. 2d Sess. 28 (1934)).

“A down payment on a truck and a driver’s license

were all it took to get into the industry.”

Transportation: A Legal History, 30 Transp. L.J. at

281. As a result, when the MCA was enacted, a

substantial portion of the nation’s truck drivers were

independent owner-operators with just one vehicle.

See, e.g., Harold Barger, National Bureau of

Economic Research, The Transportation Industries,

1889-1946: A Study of Output, Employment, and

Productivity, Appendix F: Highways—The Motor

Trucking Industry, at 223-24 (1951) (reporting

American Trucking Associations’ estimate that “82

percent of all for-hire trucking enterprises operated

10 It was estimated that such firms had on average only 2.55

trucks each.

Senate Committee Hearings on Interstate

Commerce, on S. 1629, S. 632, and S. 1635, 74th Cong., 1st

Sess., Part I, 325 (1935); Hearings on H.R. 5262 and H.R. 6016

before a Subcommittee of the House Committee on Interstate

and Foreign Commerce, 74th Cong., 1st Sess. 175 (1935). Less

than two per cent of trucking firms had more than 10 workers.

1935 Senate Hearings at 212-13; 1935 House Hearings at 16263.

17

just

one

vehicle

in

1935.”),

http://www.nber.org/chapters/c3200.pdf. Often such

drivers were unsophisticated entrepreneurs unable to

estimate adequately their own operating costs, and

many fell victim to carriers’ exploitative practices.

See Transportation: A Legal History, 30 Transp. L.J.

at 281, 285. Although many went bankrupt, the

Great Depression created a steady pool of new

entrants willing to purchase vehicles and repeat the

cycle. Id. at 284-85.

Thus, as this Court has observed, at the time of

the MCA’s enactment, “the industry was unstable

economically, dominated by ease of competitive entry

and a fluid rate picture. And, as a result, it became

overcrowded with small economic units which proved

unable to satisfy even the most minimal standards of

safety or financial responsibility.” Am. Trucking

Ass’ns, Inc., 344 U.S. at 312. Congress intended to

address these problems by enacting the MCA, which

extensively regulated the relationships between

owner-operators and authorized motor carriers. See

Senate

Committee

Hearings

on

Interstate

Commerce, on S. 1629, S. 1632, and S. 1635, 74th

Cong., 1st Sess., Part I, 78-80 (1935) (testimony of

ICC Commissioner Eastman, whose proposed

legislation was largely adopted as the MCA).

The MCA significantly affected owner-operators’

lease agreements with carriers by setting leasing

standards. See Am. Trucking Ass’ns, Inc. v. U.S., 344

U.S. at 309 n.10 (upholding the Interstate Commerce

Commission’s regulations of owner-operator leases by

explaining that “[t]he Act as originally drafted

included regulation of all carriers engaged in

18

transportation ‘whether directly or by a lease,’” and

citing MCA § 203(a)(14)-(15). 11

Importantly, the

MCA also created what Circuit City calls a “statutory

dispute resolution scheme[],” 532 U.S. at 121, for

regulatory violations. 12 See MCA § 218(c); 1 Fed.

Reg. 619, 620 et seq. (June 20, 1936), https://www.loc.

gov/item/fr001071/.

The Act’s dispute resolution process authorized

the ICC to conduct administrative review

proceedings on its own initiative or upon “complaint

of interested parties” to resolve disputes arising from

the Commission’s determinations as well as those

between affected parties. MCA § 218(c); see also 1

Fed. Reg. at 620-44 (containing detailed rules of

practice and procedure for resolution of complaints

brought before the ICC, applicable not only to the

MCA but also for disputes arising from

transportation by water and rail service providers).

Early on, these proceedings often involved challenges

to the Commission’s entry control determinations

that turned on the permissible scope of the

agreements between owner-operator drivers and

11 Congress amended this language in 1940 for clarity, but

without any change in the legislative intent. See Thomson v.

United States, 321 U.S. 19, 23-24 (1944) (citing 86 Cong. Rec.

11546 (1940)).

Section 203(b) of the MCA provided a number of

exemptions from its economic controls, including certain types

of intrastate trucking, terminal area operations, private

carriage, newspapers, farm-owned equipment, and for-hire

trucking of agricultural products, but not for matters affecting

safety.

12

19

motor carriers. 13

Over time even more

comprehensive

regulation

developed

affecting

independent truck drivers’ leases with motor

carriers. See Ex Parte No. MC-43, 13 Fed. Reg. 359,

369-372 (Jan. 27, 1948) (requiring that carriers’

leases with owner-operators be reduced to writing,

disclose the compensation to be paid, and set the

minimum duration for leases). The enhanced rules

also vested the carrier with control over equipment

operations—notwithstanding the truck driver’s

actual ownership—by requiring the carrier to inspect

non-owned equipment, create records on its use, and

test the driver’s familiarity with safety regulations.

Am. Trucking Ass’ns, 344 U.S. at 308. 14

See Comment, Truck Leasing under the Motor Carrier

Act: The Owner-Operator and the ICC, 30 U. Chi. L. Rev. 358,

361-62 (1963). In such cases, whether parties were subject to

ICC authority was based on whether the owner-operator merely

leased equipment or provided both the vehicle and his driving

services. See, e.g., Consol. Trucking, Inc., 41 M.C.C. 737, 738-39

(1943); Columbia Terminals Co., 18 M.C.C. 662, 665-66 (1939).

When independent truckers were under a motor carrier’s

direction and control, their operations fell within the ICC’s

regulatory authority. Douglas C. Grawe, Have Truck, Will

Drive: The Trucking Industry and the Use of Independent

Owner-Operators Over Time, Vol. 35:2 Transp. L. J. 116, 120

(Sept. 2008).

13

14 In a further effort to protect owner-operators from motor

carriers’ well-known exploitative leasing practices, the ICC

promulgated additional Truth-in-Leasing regulations in 1979,

enforced through an administrative dispute resolution program

initiated with a trucker’s petition. See Owner–Operator Indep.

Drivers Ass’n, Inc. v. Swift Transp. Co., 632 F.3d 1111, 1113

(9th Cir. 2011). Later, as part of the deregulation of the

trucking industry, Congress chose to provide truckers with a

20

From its inception, the MCA’s driver safety rules

applied to employees and owner-operators alike.

MCA §§ 204(a) and 206; 1 Fed. Reg. 735, 739 (July 8,

1936). The Act’s limits on maximum hours of service

for independent truck drivers and employees

resemble how other transportation workers are

regulated, including railroad employees, seamen, and

air pilots. See United States v. Am. Trucking Ass’ns,

310 U.S. 534, 545 & n.28 (1940) (citing the Hours of

Service Act of 1907, Pub. L. 59-274, 34 Stat. 1415, 49

U.S.C. §§ 21101-21108 (formerly 45 U.S.C. §§ 61-64

(repealed)) (restricting hours of service for employees

engaged in movement of trains); the Seamen’s Act of

1915, Pub. L. 63-302, 38 Stat. 1164, 1169, 1170-1184

(prescribing maximum hours of service for sailors,

firemen, oilers and others); and the Civil Aeronautics

Act of 1938, § 601(a)(5), Pub. L. 75-706, 52 Stat. 973,

1007 (repealed), granting authority to regulate

employees “in the interest of safety”).

Some years later, Congress imposed “statutory

employment status” on carriers, notwithstanding the

parties’ characterization of their relationship to the

contrary. Specifically, in response to motor carriers’

widespread practice of designating drivers as

“independent contractors” to avoid liability for the

negligence of drivers they hired, Congress amended

the MCA to make motor carriers responsible for their

independent drivers’ negligent operation “as if” the

carriers were the owners of such vehicles. 49 U.S.C.

§ 14102(a)(4) (formerly 49 U.S.C. § 11107(a)(4) (1982)

and 49 U.S.C. § 304(e) (1956)). As a result, all

private right of action to address such violations in court. 49

U.S.C. § 14704(a).

21

drivers engaged by a motor carrier became the

carrier’s statutory employees to the extent necessary

to ensure the carrier’s responsibility for public safety.

See White v. Excalibur Ins. Co., 599 F.2d 50, 52-53

(5th Cir. 1979).

In sum, by passing the Motor Carrier Act,

Congress recognized that independent truck drivers

were a vital part of the trucking industry and that

their relationships with motor carriers needed to be

regulated.

The Act controlled the relationships

between

independent

owner-operators

and

authorized motor carriers by imposing leasing

standards and by making carriers responsible for

overseeing drivers’ safe operations. And similar to

legislation Congress adopted for the waterways,

railroad, and air industries, an adjudicatory process

applicable to independent owner-operators was put

in place to resolve disputes arising under the MCA.

Thus, the Congress of 1935 enacted the provisions it

had evidently anticipated when it passed the FAA in

1925: legislation regulating the emerging trucking

industry applicable to all workers and not just

“employees,” because such limited legislation would

have been particularly ineffective given the structure

of the trucking business.

In other words, the “class of workers” later to be

covered by the MCA’s dispute resolution process was

“excluded” from the FAA under Section 1 “for the

simple reason that [Congress] did not wish to

unsettle established or developing statutory dispute

resolution schemes covering specific workers” at or

near the time of the FAA’s enactment. 532 U.S. at

121 (emphasis added). That exempted “class of

22

workers” included, and continues to include today,

interstate independent truckers who contracted with

trucking firms to provide their services.

CONCLUSION

The judgment of the Court of Appeals should be

affirmed.

Respectfully submitted,

MAURA HEALEY,

Attorney General

Commonwealth of Massachusetts

KARLA E. ZARBO*

Assistant Attorney General

One Ashburton Place

Boston, MA 02108

karla.zarbo@state.ma.us

(617) 727-2200

*Counsel of Record

July 25, 2018

23

Additional Counsel

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