Washington Update – June 2026

June 10, 2026

Supreme Court Rules on Arbitration for Interstate Transportation Workers

New Jersey Tightens Worker Classification Rules

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Supreme Court FAA Arbitration Decision Carries Implications for Independent Contractors

What the Supreme Court's Latest Ruling Means for Owner-Operators

The Supreme Court just issued a ruling that could affect whether you have the right to sue your company in court — or whether you're stuck taking disputes to a private arbitrator instead.

Here's what you need to know.

The basics

Many trucking contracts include an arbitration clause — language that says if you have a dispute with the company, you have to go through a private arbitration process rather than filing a lawsuit. The Federal Arbitration Act (FAA) generally makes those clauses enforceable, but there's an exception for transportation workers involved in interstate commerce.

On May 28, the Supreme Court ruled unanimously on who qualifies for that exception.

The good news

If you're delivering goods that started their journey in another state — even if your own run stays entirely within one state — you may qualify for the exception. That means an arbitration clause in your contract might not be enforceable against you, and you could have the right to sue in court, potentially alongside other drivers in a class action.

The catch

The Court also signaled that many independent contractors and owner-operators may not qualify — particularly if you operate through your own company, or if you purchase the goods yourself and resell them rather than hauling them for someone else. Those arrangements are common in trucking, and the Court suggested they may put you outside the exception's protection.

Bottom line

This ruling cuts both ways. It knocks down one argument companies were using to keep drivers out of court, but it also points to ways companies can argue you're still bound by your arbitration agreement. How this plays out will depend heavily on how lower courts apply the ruling going forward.

If you have an arbitration clause in your contract, it's worth understanding what it says and how this decision might affect you. TIE will continue tracking court decisions as they develop and keep you informed.

New Jersey Adopts ABC Test, Effective October 1

New Jersey has locked in regulations imposing the ABC test, a stringent standard that presumes a worker is an employee unless the hiring business can satisfy every one of its three prongs: that the worker operates free of the company’s control, performs work outside the company’s usual business, and maintains an independently established trade or business. Because all three must be met, the test makes independent contractor status difficult to establish and pulls many workers into employee classification by default.The rules take effect October 1.

The state, under Gov. Mikie Sherrill and originally advanced under Phil Murphy, defends the rule as a fairness measure, but it was adopted over substantial objections from business organizations, gig workers, and freelancers, who warned that it strips away workplace flexibility and drives up costs for the companies that engage independent workers. The New Jersey Business and Industry Association has signaled it will keep pressing for changes.

The ABC test is a far tougher gateway to independent contractor status than the federal economic-realities test and is widely viewed as incompatible with the owner-operator trucking model, which depends on independent contractor classification, running counter to the more flexible federal DOL proposal covered in our last update. New Jersey has pushed this position aggressively before, extracting settlements from Uber ($100 million in 2022) and Lyft ($19.4million last year) over driver classification.

We will continue to monitor.

TruckersIntegral to Our Economy is a 501©4 dedicated to the preservation of theindependent contractor model in the trucking industry. For more information,contact Scott Brenner @ sbrenner@crshq.com or www.truckerchoice.org.  

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