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Mandatory Arbitration Clause Affects Truckers

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Mandatory Arbitration Clause Affects Truckers

The limiting effect of a mandatory arbitration clause (also called a forced arbitration clause) should not be downplayed for the sake of employment. These clauses bind the employee from the ability to exercise their workers’ rights, such as the right to fair wages and to be free from discrimination. It is a growing problem all over the country for workers in many industries, but especially the transportation industry.

What Is Arbitration?

People should know that arbitration, itself, is not a bad thing. In fact, it can be a very nice way to resolve a dispute without getting the courts involved. It can save time and money, too.

The problem is that it forces employees to sign a contract in order to get or keep their job in order for them to food on the table. It’s often written in the fine print of employment contracts, so a lot of times, people don’t even realize what they are agreeing to when they sign. Voluntarily, it is a great option. But involuntarily with a company that has a procedure in place that includes a paid arbitrator (who is, therefore, questionable in regards to bias) is when the problems arise. In fact, according to CNBC, critics refer to arbitration by employers as “a shield for unfair corporate practices.”

What Does Arbitration Look Like?

It is similar to mediation, but instead of a simple facilitated negotiation by a neutral third party, it is a bit more involved. Each party will need to give their testimony and provide evidence just like a trial. It is more formal than a mediation but less formal than a trial. All parties will be required to agree, but this doesn’t mean there won’t be pressure to agree to certain terms.

A Truck Driver Trapped by a Forced Arbitration Clause

Recently, a story has been circulating about a Supreme Court case regarding truck driver, Dominic Oliveira, and his employer, New Prime Inc. In a classic case of corporation versus laborer, a lot is on the table for each side. Some are worried about costs to the industry and perhaps ultimately consumers. Others are concerned about how the verdict could affect transportation workers’ rights to stand up to abusive employers—something that seems to happen very often in the industry.

Oliveira filed a suit due to the low pay and harsh demands by his employer. When he wasn’t making minimum wage from his employment, he realized he was actually paying to work. This is likely due to the fact that he was considered an independent contractor by the company, a category that Oliveira disputest. It took Oliveira three years for his case to go all the way up to the United State Supreme Court, and now it has drawn a lot of attention from both sides. The ability of thousands of transportation workers to stand up to harsh employers hangs on the outcome of this trial. A key component of this case is the Federal Arbitration Act where it exempts those working as contractors from mandatory arbitration agreements, because this could impact the trucking industry to a large degree. Apparently, the industry claims that if workers have the ability to go beyond arbitration to dispute poor treatment in court, it will also negatively affect our U.S. economy as a whole.

For Oliveira, his job as a contractor was anything but “independent.” His duties at work seemed to mirror those of others classified as actual “employees.” He had to let New Prime’s electronic tracking device monitor him as he worked a schedule that was determined by his employer, and he wound up trapped in a situation where he was paying to work. At this point, the outcome of the case is still uncertain due to questions around the term “contract worker”, and if it was actually more broadly meant as employee.  

Unfortunately, when Oliveira tried to make positive changes, his company wasn’t particularly supportive. However, because he signed the agreement, he is bound to settle these issues out of court. He thought his hands were tied until he sought legal help and learned of a potential loophole. Unfortunately, in most cases, a loophole is not likely. For this reason, be very careful about what you are signing, even if it is for your current or potential employer.

“Trucking is a hard industry”

USA Today describes work for some truckers to be more like modern-day indentured servitude. They conducted a year-long investigation and found that some companies in California were forcing drivers to finance their own trucks, even if it meant putting themselves in debt. The debt also forced them to work long hours for days on end until they finally became too exhausted to continue working, and missing payments could cause truckers to be terminated as well. But if the driver was fired or finally quit, the company seized the workers’ trucks, and the worker would never be compensated for what he paid towards the cost of the truck, even if he was worse off financially at this point. The companies then turned and leased the same trucks to their new hires. The report says, “Drivers who manage to hang on to their jobs sometimes end up owing money to their employers – essentially working for free.”

The truth is, even when employers raise the pay to $80,000, the number of applicants is dismal at best. Perhaps the reason could be that the actual pay is really much lower. Washington Post tells us that even if they earn $100,000 per year, they actually only take home around $50,000. In fact, the Post tells us that the government statistics regarding median pay for a trucker is only $42,000 on top of a lot of time away from family and friends. Truckers have scoffed at the bonuses that companies offer, too, saying that there are basically “too many strings attached.” Another worker shared that companies are often requiring their truckers to perform certain duties that break federal laws. In addition, trucking companies have taken measures so that they can pay even less to their workers, such as cutting corners by hiring independent contractors.

For these reasons, it is important for transportation workers to be mindful when they receive anything that they are required to sign. Read the fine print. If you feel that you have been asked to sign an agreement from your employer to give up your right to take them to court for poor pay or poor treatment, perhaps it is time to make some serious decisions. If you are unsure about what you are being required to sign for employment, it could serve you well to consult an employment lawyer.

Legal Support for Workers Can Make the Difference

A large part of what helped Oliveira to get so far in his legal battle is the fact that he has had dedicated lawyers working for him. Even if you find yourself going into arbitration, it is wise to have legal guidance from a qualified lawyer to help you get a fair deal. Don’t miss your chance to get what deserve. If you are being poorly treated by your employer, contact an employment lawyer in your area now.


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