Drivers Land New Shot at Transport Worker Arbitration Carveout

Schmidt Baking delivery drivers secured another chance to use an arbitration exemption for transportation workers to keep their wage claims in court, a federal appeals panel said Monday.

The drivers formed their own corporate entities to deliver products for Baltimore-based Schmidt Baking Co. and Schmidt Baking Distribution LLC. Their LLCs’ distribution agreements with Schmidt count as “contracts of employment” for Federal Arbitration Act exemption purposes, the US Court of Appeals for the Second Circuit said, causing a circuit split as other appeals courts have ruled business-to-business contracts don’t fit within the carveout.

“We decline to allow employers to circumvent Congress’s ...