It is a common practice for employers to include arbitration clause in employment agreement with their employees or include such provisions in employee handbooks requiring employees to arbitrate any and all of their employment related dispute instead of filing lawsuits in courts. When employers use independent contractors instead of employees, however, the arbitrability of dispute was not so cleared. In Performance Team Freight Systems v. Aleman, a second district court of appeal case, (B259146) the court answered the question. The case involved individual truck drivers who entered into “Independent Contractor Agreements” with their employer. After the individual truck drivers filed wage claims against their employer, the employer petitioned with the trial court to compel arbitration based on arbitration provisions in the agreements. The trial court denied the petition, ruling that the agreements were exempt from the Federal Arbitration Act (9 U.S.C. § 1 et seq.) (FAA) because the individual truck drivers were transportation workers and therefore they were exempted from application of FAA, and arbitration was not compelled under California law. The trial court also found that the arbitration provisions did not apply to the individual truck drivers’ claims.
The employer appealed and court of appeal agreed with the employer by reversing the trial court ruling. The court of appeal held that truck drivers presented no evidence supporting their argument that the agreements were exempt from the FAA, and the court of appeal found that the arbitration provisions were broad enough to cover the claims asserted by them. Moreover, the court of appeal held that truck drivers failed to submit any evidence in support of their additional argument that the agreements were unconscionable. The trial court, therefore, erred by denying employer’s petition to compel arbitration.