Second Circuit – Federal Arbitration Act: Silva v. Schmidt Baking Distribution LLC

Listen to this article

United States Court of Appeals for the Second Circuit

Federal Arbitration Act — Incorporated entities — Contracts of employment

Silva v. Schmidt Baking Distribution LLC

24-2103-cv

Judges Chin, Nardini, and Kahn

Background: Commercial truck drivers filed a putative class action alleging violations of wage and hour laws. The defendant removed the action to federal court, which granted its motion to compel arbitration. The drivers appeal arguing that they are exempt from arbitration.

Ruling: The Second Circuit vacated and remanded. The court noted that the truck drivers were required to create corporations and execute distributor agreements in their capacities as presidents of the new corporate entities. The companies they were required to create are mere instrumentalities incorporated at the defendant’s behest through which the parties have contracted for the performance of work by workers. Thus, the distributor agreements are contracts of employment.

Harold L. Lichten, of Lichten & Leiss-Riordan, for the plaintiffs-appellants; Robert F. Friedman, of Littler Mendelson, for the defendants-appellees.

Oral argument audio