The National Federation of Independent Business (NFIB) has filed an amicus brief in the case Jose Madrigal v. Ferguson Enterprises, LLC at the U.S. Court of Appeals for the Ninth Circuit, urging the court to overturn a lower court ruling that expanded the Federal Arbitration Act’s exemption for transportation workers.
NFIB filed the brief in partnership with the National Association of Wholesaler-Distributors and the U.S. Chamber of Commerce. The coalition argues that the district court’s decision improperly broadened the exemption, which was originally designed for workers engaged in foreign or interstate commerce. The brief asks the appeals court to clarify that workers making in‑state deliveries of goods—after those goods have already come to rest at in‑state warehouses—should not be exempt from the Federal Arbitration Act.
“Small businesses nationwide rely on consistent and efficient supply chains in order to provide goods to their customers, and distributors are an integral part of that supply chain,” said Beth Milito, Vice President and Executive Director of NFIB’s Small Business Legal Center. “Expanding this exemption puts this supply chain at risk. By eliminating the option of arbitration, countless small businesses and the drivers they employ will be pushed into costly and time‑consuming litigation any time there is a dispute. This will lead to higher costs for businesses, employees, and ultimately consumers.”
NFIB warns that if the district court’s decision is allowed to stand, it could significantly increase litigation costs and operational challenges for small businesses across the country. Arbitration agreements, the organization emphasized, are a critical tool for small business owners to resolve disputes efficiently and without the expense of drawn‑out court proceedings.
NFIB’s Small Business Legal Center is currently active in more than 40 cases in federal and state courts nationwide and at the U.S. Supreme Court, continuing its mission to protect the legal rights of small business owners.