Just How Broad is That Arbitration Clause in Your Transportation Contract?
In a case of first impression, the First U.S. Circuit Court of Appeals addressed issues that have broad implications and present a reminder to companies to review their arbitration clauses and confirm if they are drafted properly as to the issue of who decides arbitrability issues; a court or arbitrator?
“The dispute concerned a Fair Labor Standards Act class action between an independent contractor truck driver and an interstate trucking company. The plaintiff executed an ‘Independent Contractor Operating Agreement,’ which included an arbitration clause,” the authors explain.
They discuss the court’s rejection of the trucking company’s argument, warning that in-house counsel who draft a broad arbitration clause similar the the trucking company’s will result in litigation concerning arbitrability.