Bakery, Drivers in Tussle Over Transport Worker Arbitration Rule

Schmidt baked goods delivery drivers are headed to the Second Circuit on Tuesday to make the case that their wage-and-hour claims belong before a judge, not an arbitrator.

Their dispute is part of the next front in the frequent battle over the extent of the Federal Arbitration Act’s transportation worker exemption.

Baltimore-based Schmidt Baking Co. and Schmidt Baking Distribution LLC say the individual drivers—who allege misclassification as independent contractors, depriving them of greater legal protections for employees—don’t qualify for the act’s carveout because the drivers formed their own corporate entities to work with the baked goods producer.

The district ...