The El Paso Court of Appeals has affirmed a trial court’s denial of a trucking company’s motion to compel arbitration in an employment dispute with one of its drivers.
Arrow Freight Management, Inc. v. Ruben Contreras (No. 08-23-00082-CV; January 18, 2024) stemmed from a personal injury lawsuit brought by Contreras, a truck driver for Arrow, against his employer. Contreras alleges that when working in the course and scope of his employment on the premises of a third party, he slipped and fell on some ice and sustained injuries. He further alleged that Arrow negligently sent him to work without the proper training and equipment for the conditions of the premises on which he was injured. Arrow moved to compel arbitration, citing an employment agreement Contreras signed that contained an arbitration provision. Contreras responded that the FAA did not apply to this dispute because a statutory exception applied in this case. The trial court agreed and denied the motion to compel. Arrow appealed.
The court of appeals affirmed. The issue before the court was whether the FAA exemption from mandatory arbitration for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” covered Contreras, whom the company hired as a truck driver. Arrow argued that the arbitration agreement was not a “contract of employment” because the agreement stated as such and Contreras was an at-will employee. Pointing out that a transportation company could evade the FAA exemption simply by inserting a sentence into an arbitration provision disclaiming a contract of employment, the court rejected this argument, holding that the exemption applied to at-will employees (citations omitted). Moreover, the court held, Contreras had to choose between accepting the arbitration agreement (by working more than three days) or losing his job. The agreement thus constituted a condition of employment and, as such, a “contract of employment” under the FAA (citations omitted).
The next question was whether Contreras was a “transportation worker.” The court laid out the eight-part test established in Lenz v. Yellow Transp., Inc., 431 F.3d 348, 352 (8th Cir. 2005) but determined that it was not necessary to apply it because Contreras was a driver, not a non-driver employee (noting that the test has been applied to bring under the exemption a mechanic, an orientation instructor, and a customer-service representative). The question then became whether Contreras was engaged in interstate commerce. Arrow argued that because Contreras rarely drove outside the state, instead driving Texas routes, he was not so engaged. The court disagreed, noting that the question was whether Contreras was part of a “class” of worker engaged in interstate commerce, not whether the exemption applied to an individual driver. In other words, whether Contreras ever crossed state lines was irrelevant to the inquiry (citations omitted). Since Arrow, Contreras’s employer, was engaged in interstate commerce in 24 states, its drivers as a class satisfied the FAA exemption.