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New Prime Inc v Oliveira: An Illustration of Justice Gorsuch's Textualist Style

Updated: Jan 21, 2019

Yesterday Justice Gorsuch issued the Court's opinion in New Prime Inc v. Oliveira, which he authored for a unanimous SCOTUS. The decision gives an interesting glimpse into his textualist style of legal analysis, which is reminiscent of (and in my opinion, even a further development of) the textual style of his predecessor and former boss, Justice Scalia.

For the purpose of this article, I'll focus on the only significant issue in the case: Are independent contractors covered under the Federal Arbitration Act's exemption for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce"?


In approaching this question, Justice Gorsuch invoked the plain meaning canon of statutory construction as follows:

[I]t’s a ‘fundamental canon of statutory construction’ that words generally should be ‘interpreted as taking their ordinary . . . meaning . . . at the time Congress enacted the statute.’” Wisconsin Central Ltd. v. United States, 585 U. S. ___, ___ (2018) (slip op., at 9) (quoting Perrin v. United States, 444 U. S. 37, 42 (1979)

Justice Gorsuch then acknowledged the plain meaning "employment" as it would be understood by lawyers today:


"To many lawyerly ears today, the term “contracts of employment” might call to mind only agreements between employers and employees (or what the common law sometimes called masters and servants)."

… As well as current dictionary definitions of the term:

"Suggestively, at least one recently published law dictionary defines the word 'employment' to mean 'the relationship between master and servant.' Black’s Law Dictionary 641 (10th ed. 2014)."

Justice Gorsuch then turned his analysis to the meaning of the term at the time of the Federal Arbitration Act's adoption in 1925:


"But this modern intuition isn’t easily squared with evidence of the term’s meaning at the time of the Act’s adoption in 1925. At that time, a 'contract of employment' usually meant nothing more than an agreement to perform work. As a result, most people then would have understood §1 [of the Federal Arbitration Act] to exclude not only agreements between employers and employees but also agreements that require independent contractors to perform work."

Then began an exhaustive analysis of the commonly understood meaning of the term in 1925:

What’s the evidence to support this conclusion? It turns out that in 1925 the term “contract of employment” wasn’t defined in any of the (many) popular or legal dictionaries the parties cite to us. And surely that’s a first hint the phrase wasn’t then a term of art bearing some specialized meaning. It turns out, too, that the dictionaries of the era consistently afforded the word “employment” a broad construction, broader than may be often found in dictionaries today. Back then, dictionaries tended to treat “employment” more or less as a synonym for “work.” Nor did they distinguish between different kinds of work or workers: All work was treated as employment, whether or not the common law criteria for a master-servant relationship happened to be satisfied."

After considering the commonly understood meaning, Justice Gorsuch turned to the use of the term in contemporaneous (1925) legal authorities including USSC cases, federal statutes, state court cases, state statutes, concluding: "We see here no evidence that a “contract of employment” necessarily signaled a formal employer-employee or master-servant relationship. "


Justice Gorsuch next invoked the Noscitur a sociis (It is recognized by its friends) canon of statutory construction:

"More confirmation yet comes from a neighboring term in the statutory text. Recall that the Act excludes from its coverage 'contracts of employment of . . . any . . . class of workers engaged in foreign or interstate commerce.' 9 U. S. C. §1 (emphasis added). Notice Congress didn’t use the word 'employees' or 'servants,' the natural choices if the term 'contracts of employment' addressed them alone. Instead, Congress spoke of 'workers,' a term that everyone agrees easily embraces independent contractors. That word choice may not mean everything, but it does supply further evidence still that Congress used the term 'contracts of employment' in a broad sense to capture any contract for the performance of work by workers."

It further seems as if the parties were instructed to exhaustively consider the meaning of the term as it was commonly understood in 1925 as Justice Gorsuch then considered at length the arguments of the parties on these points:

"New Prime argues that, by 1925, the words “employee” and “independent contractor” had already assumed these distinct meanings...Unsurprisingly, Mr. Oliveira disagrees. He replies that, while the term “employment” dates back many centuries, the word “employee” only made its first appearance in English in the 1800s....

But if the parties’ extended etymological debate persuades us of anything, it is that care is called for. The words “employee” and “employment” may share a common root and an intertwined history. But they also developed at different times and in at least some different ways. The only question in this case concerns the meaning of the term “contracts of employment” in 1925. And, whatever the word “employee” may have meant at that time, and however it may have later influenced the meaning of “employment,” the evidence before us remains that, as dominantly understood in 1925, a contract of employment did not necessarily imply the existence of an employer-employee or master-servant relationship."

In perhaps the most satisfyingly clear explanation of his reasoning, Justice Gorsuch states:

"No one doubts that employer-employee agreements to perform work qualified as 'contracts of employment' in 1925—and documenting that fact does nothing to negate the possibility that 'contracts of employment' also embraced agreements by independent contractors to perform work."

Interestingly, Justice Gorsuch confronted contemporaneous evidence of a narrowing of the term "contracts of employment" before dismissing this evidence as exceptional:

"Coming a bit closer to the mark, New Prime eventually cites a handful of early 20th-century legal materials that seem to use the term 'contracts of employment' to refer exclusively to employer-employee agreements. But from the record amassed before us, these authorities appear to represent at most the vanguard, not the main body, of contemporaneous usage."


Justice Gorsuch went deeper in invoking the In pari materia canon of statutory construction to consider the use of the terms in other contemporaneous statutes:

"In 1922, for example, the Railroad Labor Board interpreted the word 'employee' in the Transportation Act of 1920 to refer to anyone 'engaged in the customary work directly contributory to the operation of the railroads.' And the Erdman Act, a statute enacted to address disruptive railroad strikes at the end of the 19th century, seems to evince an equally broad understanding of 'railroad employees.'"

As a final parting blow to non-textualists, Justice Gorsuch noted and then dismissed New Prime's appeals to the presumed policy goals of the statute:

"This Court has said that Congress adopted the Arbitration Act in an effort to counteract judicial hostility to arbitration and establish 'a liberal federal policy favoring arbitration agreements.' Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24 (1983). To abide that policy, New Prime suggests, we must order arbitration according to the terms of the parties’ agreement."


"If courts felt free to pave over bumpy statutory texts in the name of more expeditiously advancing a policy goal, we would risk failing to 'tak[e] . . . account of ' legislative compromises essential to a law’s passage and, in that way, thwart rather than honor “the effectuation of congressional intent.” Ibid. By respecting the qualifications of §1 today, we 'respect the limits up to which Congress was prepared' to go when adopting the Arbitration Act. United States v. Sisson, 399 U. S. 267, 298 (1970)."

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