On June 6, 2022, a unanimous United States Supreme Court issued another key decision interpreting the Federal Arbitration Act (“FAA”) that will have a significant impact on certain employers going forward. In Southwest Airlines Co. v Saxon, the Court held that the airline’s cargo ramp supervisors were exempt from the FAA as they were a “class of workers engaged in foreign or interstate commerce.”
The FAA exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from coverage. 9 U.S.C. § 1. The Supreme Court previously held that the phrase “any other class of workers engaged in foreign or interstate commerce” applies only to “transportation workers.” Circuit City Stores v. Adams, 532 U.S. 105, 119 (2001).
Plaintiff Latrice Saxon worked as cargo ramp supervisor and brought a putative collective action against her employer for allegedly unpaid overtime wages. Saxon’s employment contract contained a provision in which she agreed to arbitrate any wage disputes on an individual basis. When the airline sought to compel arbitration of her claim, Saxon contended that the agreement was unenforceable because she was exempt from FAA coverage as a “transportation worker.” Specifically, Saxon alleged that cargo ramp supervisors frequently physically loaded and unloaded cargo on and off airplanes.
In reversing the district court, the U.S. Court of Appeals for the Seventh Circuit held that Saxon’s...
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