This Report summarizes an opinion issued on December 10, 2021 (Part I); and cases granted review on December 10 and 15, 2021 (Part II).
Cases Granted Review: Southwest Airlines Co. v. Saxon, 21-309
Southwest Airlines Co. v. Saxon, 21-309. Section 1 of the Federal Arbitration Act provides that the FAA does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” At issue is “[w]hether workers who load or unload goods from vehicles that travel in interstate commerce, but do not physically transport such goods themselves, are interstate ‘transportation workers’ exempt from the Federal Arbitration Act.” Latrice Saxon is a Ramp Agent Supervisor for Southwest Airlines who occasionally loads and unloads passenger baggage from airplanes. She filed a putative collective action against Southwest under the Fair Labor Standards Act, seeking allegedly unpaid overtime. Southwest moved to compel arbitration, pointing to the arbitration provision in Saxon’s employment contract. Saxon responded by claiming that she fits within the FAA §1 exemption. The district court held that airline employees who load and unload interstate cargo are not exempt from the Federal Arbitration Act. The Seventh Circuit reversed. 993 F.3d 492.
The Seventh Circuit stated that to be “engaged in foreign or interstate commerce”― in the words of the §1 exemption―is to be “actively occupied in the enterprise of moving goods across interstate lines.” And although this line may not always “be easy to draw,” the court held that “[w]herever the line may be, . . . ramp supervisors fall on the transportation-worker side of it.” By loading and unloading interstate cargo, ramp supervisors “are actually engaged in the movement of goods in interstate commerce.” “Actual transportation,” the court said, “is not limited to the precise moment either goods or the people accompanying them cross state lines.” To the contrary, “[l]oading and unloading cargo onto a vehicle so that it may be moved interstate, too, is actual transportation.” “[A]nd those who performed that work were recognized in 1925,” when the Federal Arbitration Act was passed, “to be engaged in commerce.” The court found “further support[]” for its conclusion by examining “the enumerated categories of seamen and railroad employees in §1.” The court concluded that, historically, both categories included cargo loaders. In fact, the court pointed out, just a year before the Act was passed, the Court had held that it was “too plain to require discussion that” railroad employees responsible for “the loading or unloading of an interstate shipment” are engaged in commerce.
Southwest argues in its petition that the Fifth Circuit reached the opposite conclusion in a near-identical case. And in its view, the Fifth Circuit was correct. Southwest says that, “[b]ecause the FAA is a statute seeking to promote arbitration agreements and overcome judicial hostility to arbitration, this Court has ‘afforded a narrow construction’ to the Section 1 exemption” (citing Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 118 (2001)). “Accordingly,” claims Southwest, “the Court limits the narrow exemption to workers who take an ‘active’ role in the movement of goods across state lines. Id. at 115-16.” As the Fifth Circuit put it, the §1 exemption covers only those workers “actually engaged in the movement of goods in interstate commerce―in the same way that seamen and railroad workers are.”
[Editor’s note: Some of the language in the background section of the summary above was taken from the petition for writ of certiorari and brief in opposition.]
