In a recent development, the Federal Arbitration Act’s (FAA) “Transportation Worker” exemption has not been deemed applicable to contracts between businesses. According to a report published on JD Supra, this results from a dispute that occurred between Amazon and one of its “delivery service partners.”
Amazon, post this dispute, sought to compel arbitration following an arbitration agreement in the companies’ contract. Consequentially, the district court commanded the parties to arbitrate. This decision was, however, appealed to the Fourth Circuit Court of Appeals by the delivery service partner. They contended that arbitration was not mandatory due to the FAA’s exemption for “contracts of employment” with “transportation workers.” Nonetheless, the Fourth Circuit upheld the district court’s order, holding firm on arbitration.
Legal professionals, particularly those engaged with corporate contractual relationships, may do well to monitor developments in this matter, and take heed of the court’s view on arbitration. It’s clear that this interpretation of the FAA’s “Transportation Worker” exemption could have lasting impacts on business-to-business agreements, particularly within the transportation sector.
This case serves as a significant precedent for understanding the limitations of the FAA’s “Transportation Worker” exemption within the parameters of business-to-business contracts. Further insights on this case can be found here.