The U.S. Supreme Court will hear oral arguments on March 28 in a case involving Southwest Airlines over whether airline cargo handlers are transportation workers who are not required to arbitrate employment-related disputes.
The Federal Arbitration Act (FAA) generally requires enforcement of private agreements, but exempts seamen, railroad employees or other workers engaged in foreign or interstate commerce from arbitration to limit labor strife that prevents goods movement critical to the economy. In 2001 the Supreme Court held that the exemption applies only to “transportation workers.”
The question before the court in Southwest Airlines v. Saxon is when employees don’t physically transport goods, are they engaged in commerce and exempt from arbitration?
In recent years, the Supreme Court has tended to side more often with the business community, especially with the growth of the conservative majority, court watchers say.
Latrice Saxon is a Southwest Airlines (NYSE: LUV) ramp supervisor who manages and assists workers who load and unload cargo at Chicago Midway Airport. She sued the company for failing to pay for overtime work under the Fair Labor Standards Act. She also claimed that ramp managers frequently filled in as line workers processing cargo. Unlike ramp agents, supervisors aren’t covered by a collective bargaining agreement and instead are required to arbitrate wage disputes, under their employment contract.
Saxon argued the Arbitration Act didn’t apply to her...
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