Local Law Blogs

Statutory Prohibition Against Arbitration of Labor Contracts

by Linda Perez Clark

Louisiana law prohibits arbitration clauses in “contracts of employment of labor.” In Wright v. 3P Delivery, LLC, 2007-683 (La.App. 3 Cir. 10/31/07) --- So.2d ----, the court was asked to consider whether an arbitration clause in a contract requiring the plaintiff, an individual, to provide transportation services along with handling, loading and unloading of shipments for defendant, fell within this prohibition. The issue to be decided was whether the contract was one wherein the plaintiff provided service(s) to the defendant, thus making the arbitration clause valid, or was the contact one wherein the plaintiff provided labor to the defendant, thus rendering the clause invalid.

The court held that because physical labor was required for plaintiff to provide all of the services under the contract, the contract was one for labor, not services. “Loading, unloading and handling of shipments and equipment clearly require the application of ‘physical force, or brawn and muscle.’ Hence, we find the contract at issue was a contract for labor excluded from binding arbitration…” Id. The court’s analysis suggests that had the contract required “performance of mental tasks, or the services of those recognized generally as professional men or women,” it would have reached a different result. 

Many service contracts require the provision of only physical labor (e.g., maintenance contracts). This case decision now begs the question of whether arbitration clauses in those contracts are enforceable. Perhaps the court was influenced by the fact that the service provider was an individual versus an entity. In any case, this decision seems to depart from the trend of readily enforcing arbitration clauses in commercial contracts.

Full post as published by Louisiana Law Blog on November 12, 2007 (boomark / email).