A California court ruled that a staffing firm cannot force a truck driver to arbitrate his wage and hour claims under the Federal Arbitration Act (FAA).
The Court of Appeal for California’s Fourth Judicial District decision confirmed that the FAA is unenforceable in regard to employment contracts of employees who are engaged in transportation of goods in interstate or foreign commerce, regardless of whether the employer itself is in the transportation industry.
Cornerstone Staffing Solutions, a driver staffing firm, had recruited the driver to work for one of its clients, Team Campbell Logistics, a third-party logistics company based in Fontana, CA, that operates a fleet of more than 600 trailers.
The driver proposed a wage and hour class action alleging that he and other employees were denied meal and rest periods and other benefits that are required under California law.
The contract between Cornerstone and the driver contained a clause requiring all employment disputes to be resolved in arbitration. In another provision, the driver waived his right to pursue class actions, either in court or arbitration.
Cornerstone argued that it was not directly engaged in interstate freight hauling, which meant that the driver could not claim to be exempt from the FAA.
The appellate court found that because the FAA exempts employment contracts of class of workers engaged in foreign or interstate commerce, it was immaterial whether Cornerstone was itself in the transportation industry for the exemption to apply.
Noting the driver had engaged in interstate commerce by hauling goods throughout the Western states, the court pointed out, “a transportation worker does not forfeit the benefit of the exemption merely because the employer has other divisions or segments devoted to nontransportation activities.”
The U.S. Supreme Court also is currently mulling the issue regarding whether the FAA law applies to truck drivers (AA, 3-15-18, P. 3).
