Transportation workers, including baggage handlers, are exempt from the Federal Arbitration Act

The Federal Arbitration Act says that certain disputes must be arbitrated and cannot proceed in court if the parties sign an arbitration agreement. Many plaintiffs don't like arbitration, as they perceive court (and trial by jury) to be a more favorable forum than a single arbitrator. For this reason, many cases require the courts to first determine whether a claim is arbitrable in the first instance. The plaintiffs usually lose these cases, as courts favor arbitration, and the Supreme Court in particular commands that model of statutory interpretation. The plaintiff wins this dispute, however, because she falls within the transportation exception to the FAA's mandatory arbitration provision.

The case is Southwest Airlines v. Saxon, issued by the Supreme Court on June 6. Plaintiff was a ramp supervisor for Southwest, loading and unloading baggage, airmail, and commercial cargo on and off airplanes from around the country. She claims the company denied her proper overtime wages and therefore wants to bring a class action. Southwest says plaintiff cannot do this because she signed an arbitration agreement. At issue is whether plaintiff can involve Section 1 of the FAA, which exempts from its coverage "contracts of employment of seamen, railroad companies, or any other class of workers engaged in foreign or interstate commerce." We call this the transportation exception. 

The company says the transportation exception to mandatory arbitration does not apply because plaintiff is not engaged in interstate conduct by her day-to-day work. She simply works at the airport. Plaintiff says that because air transportation as an industry is engaged in interstate commerce, she can involve Section 1 and proceed to court. 

The Court unanimously agrees with plaintiff, stating that "any class of workers directly involved in transporting goods across state or international borders falls within Section 1's exception." That includes airplane cargo loaders, holding that "airline employees who physically load and unload cargo on and off planes traveling in interstate commerce are, as a practical matter, part of the interstate transportation of goods." After reviewing settled legal principles in this area, Justice Thomas writes:

These canons showed that §1 exempted only contracts with transportation workers, rather than all employees, from the FAA. And, while we did  not  provide  a  complete  definition  of  “transportation worker,” we indicated that any such worker must at least play a direct and “necessary role in the free flow of goods” across borders. Put another way, transportation workers must be actively “engaged in transportation” of those goods across borders via the channels of foreign or interstate commerce. Cargo loaders exhibit this central feature of a transportation worker."