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Oliveira v. New Prime, Inc.

United States District Court, D. Massachusetts

December 9, 2019

DOMINIC OLIVEIRA, Plaintiff,
v.
NEW PRIME, INC., Defendant.

          MEMORANDUM AND ORDER

          Hon. Patti B. Saris Chief United States District Judge.

         This case involves a pay dispute between a trucking corporation and former truck drivers. Plaintiff Dominic Oliveira brought this proposed class and collective action in March 2015, alleging that Defendant New Prime, Inc. (“New Prime”) violated the Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b), and the Missouri Minimum Wage Law, Mo. Rev. Stat. § 290, by failing to pay its truck drivers minimum wage. Docket. Nos. 1, 33.

         In June 2015, New Prime moved to compel arbitration of Oliveira's claims under the Federal Arbitration Act (FAA), but did not press its claim under Missouri law. See Docket No. 3 at 4-8. This Court denied New Prime's motion without prejudice and ordered limited discovery on the applicability of the FAA to this case. Docket No. 60. New Prime appealed to the First Circuit, lost, and then appealed to the Supreme Court, and lost again. Now it wants a fourth bite of the arbitration apple.

         Now, three and a half years after this case was filed, New Prime moves under Missouri law to compel arbitration of the claims of several plaintiffs who recently opted into this case pursuant to the FLSA. New Prime argues that (1) it has not waived its right to arbitration under Missouri law with respect to the new opt-in plaintiffs (2) any state-law challenges to its arbitration agreements[1] with the opt-in plaintiffs must be resolved by an arbitrator, rather than this Court. Plaintiff contests both assertions.

         After hearing, the Court DENIES Defendant's motion to compel arbitration of the opt-in plaintiffs' claims (Docket No. 161) because it has waived its right under Missouri law.

         BACKGROUND

         The following facts are taken from the First Amended Complaint and attached exhibits, Docket No. 33, as well as this Court's previous opinion in this case, Oliveira v. New Prime, Inc., 141 F.Supp.3d 125 (D. Mass. 2015).

         In March 2013, Oliveira entered New Prime's “Paid Apprenticeship” training program, which is advertised as an on- the-job training program for new truck drivers. Docket No. 33-2, Docket No. 33-3. Apprentices obtain a Missouri Commercial Driver's License (CDL) permit, shadow New Prime drivers for three to four weeks, take a CDL exam, drive 30, 000 miles as a New Prime company driver trainee, and attend an additional week of orientation classes. Oliveira, 141 F.Supp.3d at 128. The drivers then choose to be classified as either company drivers or independent contractors. Id.

         In May 2013, when Oliveira returned from his trainee driving, New Prime told Oliveira that he could make more money if he became an independent contractor. Id. Oliveira then signed a document titled “INDEPENDENT CONTRACTOR OPERATING AGREEMENT.” Dkt. No. 36-1. The document contained an arbitration provision that delegated questions of arbitrability to the arbitrator.[2]

         During his time as an independent contractor and later as a New Prime company driver, New Prime made regular deductions from Oliveira's paycheck. Oliveira, 141 F.Supp.3d at 129. These deductions were ostensibly due to an advance of $200 per week given to Oliveira during the apprentice program, lease payments on Oliveira's truck, and payments for other tools that New Prime instructed Oliveira to buy. Id. at 128-29. On multiple occasions, Oliveira's weekly pay was negative after spending dozens of hours on the road. Id. at 129.

         Oliveira brought this class action in March 2015, arguing that he and other New Prime drivers were not paid the minimum wage under federal and state law. Docket No. 1. Oliveira proposed the following definition for both a 216(b) collective action under the FLSA and a Rule 23(b) class under Missouri law:

All current and former employees that drove for the defendant, whether or not catagorized [sic] as employees, trainees, or independent contractors who were not compensated for all training time, paid by the mile without regard to hours worked and/or had improper deductions taken from their paychecks.

Docket No. 33 at 13-14.[3] In June 2015, New Prime filed a motion to compel arbitration of Oliveira's claims, or in the alternative, to dismiss the suit for failure to state a claim. Docket No. 24, Docket No. 35. New Prime's arbitration-related arguments were based entirely on federal law. See Docket No. 36 at 4-8. This Court denied New Prime's motion in October 2015. Oliveira, 141 F.Supp.3d at 135. New Prime appealed the decision to the First Circuit shortly thereafter. Docket No. 67.

         The First Circuit affirmed this Court's decision in May 2017. Docket No. 73; Oliveira v. New Prime, Inc., 857 F.3d 7, 24 (1st Cir. 2017). The First Circuit held that (1) the “applicability of the FAA is a threshold question for the court to determine before compelling arbitration under the Act, ” and (2) the provision of the FAA that exempts “contracts of employment” of transportation workers from the Act's coverage applies to an agreement “that establishes or purports to establish an independent-contractor relationship.” Id. at 9. Thus, New Prime could not rely on the FAA to compel arbitration of Oliveira's claims.

         New Prime appealed the First Circuit's decision to the U.S. Supreme Court in November 2017. Docket No. 110. While its petition for certiorari was pending, New Prime moved in January 2018 to deny certification of Oliveira's putative class. Docket No. 118. In its motion, New Prime asserted that it had “not waived its right to compel arbitration of the claims of putative class members” under Missouri law, even if it had waived that right with regard to Oliveira individually. Id. at 8. Once the Supreme Court granted certiorari in February 2018, Docket No. 134, the district court proceeding was stayed prior to resolution of the class certification issue. In January 2019, the Supreme Court affirmed the First Circuit on both of its holdings. New Prime Inc. v. Oliveira, 139 S.Ct. 532, 544 (2019).

         Oliveira subsequently filed consent forms for ten opt-in plaintiffs (“Plaintiffs”), pursuant to 29 U.S.C. § 216(b), in April 2019 (Docket No. 154, Docket No. 155), and June 2019 (Docket No. 159, 160). The opt-in plaintiffs had each signed Operating Agreements with arbitration provisions similar to that signed by Oliveira. Docket. Nos. 163-1 to 163-10. Many of the contracts were signed at the end of the driver training period, after each ...


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