Are airline cargo loaders engaged in interstate commerce? The answer has high stakes for forced arbitration.


man watches as suitcases move up conveyor belt into the body of airplane

An airline employee hundreds baggage onto a airplane. (Bjoern Wylezich through Shutterstock)

Like many instances involving the Federal Arbitration Act, Southwest Airlines Co. v. Saxon started with an employment dispute: Southwest worker Latrice Saxon believed she was owed extra time pay. On behalf of herself and her fellow ramp-agent supervisors, Saxon filed a grievance beneath federal wage-and-hour legislation in federal court docket. Southwest responded that Saxon’s case ought to be dismissed as a result of she was sure by an arbitration settlement, which was enforceable beneath the FAA. Similar arguments routinely succeed in employment instances – however Saxon argued that her case was totally different as a result of the FAA doesn’t apply to interstate transportation staff.

The U.S. Court of Appeals for the seventh Circuit agreed that Saxon’s job fell throughout the exception, and on Monday, the Supreme Court will hear oral argument in the case. If the justices affirm the seventh Circuit, Saxon will be capable to pursue her extra time declare in court docket. And the eventual determination could have penalties far past airline workers like Saxon. Companies like Amazon and Uber are intently watching the case for the way it will have an effect on different parts of the American workforce engaged in transferring items and other people.

The Federal Arbitration Act usually requires courts to implement arbitration agreements, however Section 1 of the statute exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Saxon is neither a seaman nor a railroad worker – she works at Chicago Midway Airport, the place she supervises ramp brokers as they load and unload baggage and different cargo onto planes, and in addition hundreds and unloads cargo herself. Therefore, the query in this case is whether or not Saxon’s job places her in a “class of workers” who’re “engaged in … interstate commerce.”

Southwest argues that solely staff who “participate directly in the cross-border transportation of goods or people” qualify for the transportation-worker exemption. That definition, the corporate causes, excludes ramp supervisors like Saxon, who don’t accompany cargo on its interstate journey. In distinction, Saxon argues that the transportation-worker exemption reaches all airline workers, or, alternatively, that it no less than reaches staff who begin items on their interstate journey by loading them onto automobiles, or who unload them at their locations.

 “[A]ny other class of workers engaged in foreign or interstate commerce” – language typically known as the residual class – sounds fairly broad. But in its 2001 determination in Circuit City Stores, Inc. v. Adams, the court docket concluded that the class covers solely interstate transportation staff. Circuit City rested in half on a canon of statutory interpretation often known as ejusdem generis, which signifies that when a statute comprises a listing of comparable phrases after which a catch-all or residual time period, the latter ought to be construed to incorporate solely objects which might be much like the previous. Applying that rule, the court docket concluded that the residual class encompassed solely lessons of staff who have been much like seamen and railroad workers in that that they labored in interstate commerce.

In addition to Circuit City, the court docket has interpreted the transportation-worker exception in one different case, New Prime Inc. v. Oliveira. In New Prime, the court docket unanimously determined that unbiased contractors who labored in interstate commerce have been coated by the exception. Key to the choice was the court docket’s view that the phrase “contracts of employment” would have been understood comparatively broadly when Congress enacted the FAA in 1925 – to succeed in all contracts for the efficiency of labor, whether or not or not the contracting events had an employer-employee relationship.

In line with Circuit City and New Prime, each events make arguments primarily based on the bizarre that means of “engaged in interstate commerce” as it could have been understood in 1925, and on ejusdem generis. Southwest begins with dictionaries and case legislation from the related time interval to argue that the clause meant “employment in transporting goods or people from state to state”; it additionally argues that individuals wouldn’t generally use the time period “transportation” to confer with the act of loading cargo. Saxon factors to the FAA itself: Section 1 refers to “agreements relating to wharfage … or any other matters in foreign commerce.” “Wharfage” is the cargo loading or unloading price paid to a dock proprietor, and Saxon argues which means that the FAA’s drafters understood cargo loading to be “in foreign commerce.” It then stands to cause, she continues, that somebody engaged in cargo loading was engaged in international or interstate commerce. In addition, Saxon depends on different period-appropriate sources to argue that “interstate commerce” encompassed a bundle’s complete journey, from drop-off for transport by way of supply at its closing vacation spot, together with loading onto a ship or railcar.

Both events commit vital consideration to the that means of the primary two classes listed in the transportation-worker exemption: railroad workers and seamen. Southwest argues that the 2 teams have in frequent frequent border-crossing, and subsequently the identical ought to be true of staff coated beneath the “any other class of workers” language. In explicit, Southwest argues that in 1925, “seamen” referred solely to individuals who labored on board ships, and didn’t embody stevedores who labored loading and unloading ships. On the opposite hand, Southwest concedes that “railroad employees” may in principle imply everybody employed by a railroad, but it surely urges {that a} comparatively slim studying of that time period makes extra sense in statutory context.

Saxon disagrees about who counted as seamen or railroad workers in 1925, arguing that turn-of-the-century sources interpreted these phrases to succeed in anybody who facilitated transport or railway transportation – together with cargo loaders. Therefore, she places otherwise the important thing commonality between seamen and railroad workers: They are “necessary to the free flow of goods” by sea and rail, simply as airline workers are essential to the free movement of products by air. She additionally factors to a cause for the transportation-worker exception – that Congress didn’t wish to disrupt different labor-dispute decision programs that coated transportation staff, particularly railroad staff – and notes that the Railway Labor Act broadly covers workers of railways and airways.

Finally, Southwest makes a coverage argument that may sound acquainted to many readers: The FAA was enacted to beat judicial hostility to arbitration, together with in the context of employment disputes. But Saxon responds that, according to New Prime, the court docket mustn’t artificially slim the transportation-worker exception, relying in half on legislative historical past that implies the exception was added to reassure the seamen’s union that the FAA wouldn’t cowl stevedores.

The stakes in this case are evident from the amicus briefs. Southwest’s supporters embody Uber, Lyft, and Amazon – all corporations whose workforces contain transportation of products or passengers. The ride-hail corporations usually urge the court docket to resolve the case in a means that may rule their drivers out from the transportation-worker exemption, however the truth that drivers typically cross state traces, or transport passengers and baggage firstly or finish of interstate journeys. Amazon’s concern is native supply drivers who carry items on the final legs of their interstate journeys, and whom two courts of appeals have concluded fall throughout the transportation-worker exception.

The final time the Supreme Court interpreted the transportation-worker exception, in New Prime in 2019, it delivered a unanimous determination in favor of staff who have been opposing arbitration – a shocking consequence when one considers the court docket’s latest string of pro-arbitration selections. Whether this case will ship an analogous consequence will seemingly activate how the justices learn the hundred-year-old file as as to if land-based staff like stevedores have been engaged in interstate commerce.


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