Individuals employed as ramp workers who frequently handle cargo for an airline are “transportation workers” exempt from the Federal Arbitration Act (FAA), the U.S. Supreme Court has held. Southwest Airlines Co. v. Saxon, No. 21-309 (June 6, 2022). Therefore, the employees are not required to arbitrate their wage-hour claims under the FAA, but may still be subject to arbitration under state law.
The FAA’s transportation worker exception excludes from FAA coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. In recent years, the scope of the exception has emerged as a significant issue in class action litigation. In this case, the narrow question the Supreme Court addressed to resolve a circuit split was “[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.” The Supreme Court made clear that, when determining whether workers qualify for the FAA’s transportation worker exception, the analysis turns on the specific duties those workers perform and not the company or industry in which the workers are engaged.
A more detailed analysis of the Supreme Court’s decision can be found here.