Missouri Federal Court Denies New Prime Motion to Compel Arbitration

A federal court in Missouri recently ruled that the trucking company New Prime, Inc., could not compel one of its drivers to private arbitration under the Missouri Uniform Arbitration Act (MUAA).

In August 2021, Fair Work filed a class and collective action lawsuit in federal court against New Prime asserting a variety of wage violations under the Fair Labor Standards Act and the Missouri Minimum Wage Law. The plaintiff in that case alleged that New Prime had failed to pay new drivers at least the full minimum wage for their hours worked, including for participating in New Prime's orientation program.New Prime moved to compel the case to arbitration. Arbitration is a private process that many companies have started using over the past 20 years in order to avoid the burden, expense, and outcomes associated with individuals bringing their claims in court. In 2015, the New York Times ran a series of articles on arbitration, reporting that:

By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, companies [have] devised a way to circumvent the courts and bar people from joining together in class-action lawsuits, realistically the only tool citizens have to fight illegal or deceitful business practices.

New Prime's argument was that the plaintiff digitally "signed" an agreement to arbitrate as part of his on-boarding process with the company. Therefore, the company argued, he could not pursue his claims in court. The federal court for the Western District of Missouri disagreed. On May 5, 2022, the court denied New Prime's motion to compel arbitration.In her decision, Chief Judge Beth Phillips found that New Prime had failed to demonstrate that it had a valid agreement to arbitrate with the plaintiff because there was no evidence that he assented to the arbitration clause. As Judge Phillips explained:

Plaintiff did not put his signature on the Arbitration Clause; the computerized module took it from another location and put it on the Arbitration Clause. And the place where Plaintiff applied his signature did not ask him if he assented to the Arbitration Clause or even tell him that his signature was being placed on the Arbitration Clause; Plaintiff was only told that by signing in that separate location he was acknowledging that his electronic signature was legally binding, but his acknowledgment of this fact did not mean that he assented to the Arbitration Clause. And, because Plaintiff may not have even seen much less signed the Contract at the time he reviewed the Arbitration Clause, there is no basis for concluding that anything he did with respect to the Arbitration Clause (which does not reference the Contract) demonstrated that he agreed to arbitrate disputes arising from the Contract.

Judge Phillips also found that New Prime's arbitration agreement did not comply with the MUAA's requirements for contract generally. Specifically, the contract did not include a disclaimer stating that it included a binding arbitration provision adjacent to, or above, the signature line. Moreover, Judge Phillips agreed with the plaintiff that he had "opted out" of arbitration because that agreement stated that he could do so within one year by submitting a written communication to the company – which he did by filing the lawsuit.You can read the court's decision here. If you are a current or former driver for New Prime, or participated in New Prime's driver orientation program, and have any questions about the case, please contact Hillary Schwab by phone or email; she attempts to get back to everyone within 24 hours.