Squire Patton Boggs’ Summer Associate Addyson Fry discusses a recent United States Supreme Court decision addressing the exemption under the Federal Arbitration Act applicable to transportation workers engaged in interstate commerce.
For decades, employers have relied on arbitration agreements to manage workplace disputes efficiently and predictably. But recent United States Supreme Court decisions have steadily narrowed when those agreements can be enforced under the Federal Arbitration Act (“FAA”).
Section 1 of the FAA exempts certain “transportation workers” engaged in interstate commerce from mandatory arbitration. Once viewed as a limited carveout, through a trio of cases decided over the past few years, the Court has expanded who qualifies for this exemption, allowing more workers to bypass arbitration and bring their claims in court, raising litigation risk and costs for employers.
First, in 2019, the Court in New Prime Inc. v. Oliveira extended the exemption beyond employees to apply also to transportation workers engaged as independent contractors. Next, in 2022, the Court in Southwest Airlines Co. v. Saxon held an airline ramp worker whose job entailed only loading and unloading cargo from an airplane within a single state nonetheless qualified as a transportation worker engaged in interstate commerce for purposes of the exemption. Then, in 2024, the Court in Bissonnette v. LePage Bakeries held a worker falls under the exemption so long as their work plays a...
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