Do an airline’s ramp workers qualify as “transportation workers” exempt from the Federal Arbitration Act (FAA)?
The U.S. Supreme Court has granted an airline’s petition for review to resolve this question. Southwest Airlines Co. v. Saxon, Docket No. 21-309.
The Court’s holding will determine whether the workers will be able to pursue their overtime collective action in federal court or, rather, must arbitrate their claims on an individual basis pursuant to an arbitration agreement with their employer.
The transportation worker exemption 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 exemption has emerged as one of the most significant issues in class action litigation, particularly as employers increasingly have adopted arbitration agreements with class and collective action waivers in an effort to rein in litigation costs and as wage and hour lawsuits have proliferated among employees and independent contractors who claim to fall within the exemption.
In the case at hand, a federal district court applied a narrow construction of the FAA exemption’s residual clause. It found the exemption did not apply to a cargo ramp supervisor at Chicago’s Midway Airport. The plaintiff alleged she regularly assisted her team of ramp agents in loading and unloading airplane cargo that was to be transported interstate. The district court held the...
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