Like many cases involving the Federal Arbitration Act, Southwest Airlines Co. v. Saxon began with an employment dispute: Southwest employee Latrice Saxon believed she was owed overtime pay. On behalf of herself and her fellow ramp-agent supervisors, Saxon filed a complaint under federal wage-and-hour law in federal court. Southwest responded that Saxon’s case should be dismissed because she was bound by an arbitration agreement, which was enforceable under the FAA. Similar arguments routinely succeed in employment cases – but Saxon argued that her case was different because the FAA does not apply to interstate transportation workers.
The U.S. Court of Appeals for the 7th Circuit agreed that Saxon’s job fell within the exception, and on Monday, the Supreme Court will hear oral argument in the case. If the justices affirm the 7th Circuit, Saxon will be able to pursue her overtime claim in court. And the eventual decision may have consequences far beyond airline employees like Saxon. Companies like Amazon and Uber are closely watching the case for how it will affect other portions of the American workforce engaged in moving goods and people.
The Federal Arbitration Act generally requires courts to enforce arbitration agreements, but 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 employee – she works at Chicago Midway...
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