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As it appeared in Law360 Employment Authority
A bakery urged a Connecticut federal judge to deny two food distributors’ bid for a quick appeal of an order directing them to arbitrate their independent contractor misclassification claims, saying the request “falls woefully short” of the standards for an appeal.
Schmidt Baking Co. Inc. and Schmidt Baking Distribution LLC in a memorandum filed Monday opposed Nathaniel Silva and Phil Rothkugel’s motion for an interlocutory appeal to the Second Circuit in their misclassification suit, saying at best the appeal would merely shift who decides arbitrability and could still result in arbitration.
In order to prove that the appeals court should reconsider the May ruling granting Schmidt’s bid to send the suit into arbitration, the workers need to meet three criteria, but Schmidt said their request “falls woefully short” and that they can’t satisfy any of the prongs.
The workers haven’t presented a pure legal question that can be decided without resorting to the factual record, identified an intra-circuit split on the issue, or showed that an interlocutory appeal would ultimately hasten the end of the litigation, the bakery said.
They are seeking to appeal a ruling sending their claims into arbitration because they don’t fall under a Federal Arbitration Act exemption for seamen, railroad employees or any other workers engaged in foreign or interstate commerce.
However, Schmidt said their appeal lodges new arguments that come too late in the litigation and includes too many factual disputes to be “quickly and cleanly” resolved by an appeals court. It would ultimately be faster and easier to continue the disputes in separate individual arbitration proceedings for Silva and Rothkugel, the bakery told the court.
Silva and Rothkugel brought their suit in state court, and Schmidt removed it to federal court in December, records show. The workers alleged their misclassification as independent contractors resulted in their being cheated out of wages. Independent contractors lack protections such as minimum wage and overtime pay that are required for full employees.
The court’s May 2 ruling compelling arbitration said the two workers signed valid arbitration agreements with Schmidt when they created their own corporate entities to work for the company, agreeing with the company’s January motion.
The workers had argued the U.S. Supreme Court’s 2019 decision in New Prime Inc. v. Oliveira fully addressed the issues at stake in their case; in that ruling, the justices held courts should interpret FAA exemption based on the “ordinary meaning” Congress imbued it with when it was enacted.
However, that ruling, the judge said in May and Schmidt repeated in Monday’s opposition to appeal, did not speak to whether a contract between two business entities was an employment contract covered by the FAA transportation worker exemption.
Zachary L. Rubin of Seppinni Law PLLC, who is representing the workers, said they disagree with Schmidt’s arguments and will be filing a reply brief to explain why the appeals court should reconsider the underlying legal issues in the case.
Representatives of Schmidt did not immediately respond to requests for comment Tuesday.
Silva and Rothkugel are represented by Zachary L. Rubin of Seppinni Law PLLC.
Schmidt Baking is represented by William J. Anthony, Joshua B. Waxman and Michael McIntosh of Littler Mendelson PC.
The case is Silva et al. v. Schmidt Baking Distribution LLC et al., case number 3:23-cv-01695, in the U.S. District Court for the District of Connecticut.
–Additional reporting by Irene Spezzamonte. Editing by Bruce Goldman.
