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Sunday, October 11, 2026

Supreme Court Addresses Federal Arbitration Act’s Residual Clause, But Circuit Split Remains Regarding Personal Jurisdiction in FLSA Cases - JD Supra

On June 6, 2022, the Supreme Court addressed two cases involving employment law issues. The Court’s significant opinion in Southwest Airlines Co. v. Saxon regarding the scope of the residual clause contained in Section 1 of the Federal Arbitration Act (FAA) garnered most of the headlines. But the Court also rejected a petition for review filed by Day & Zimmermann involving personal jurisdiction in federal question cases arising under the Fair Labor Standards Act (FLSA), leaving intact a ruling from the First Circuit that could have a significant impact on employer’s faced with FLSA lawsuits filed in that jurisdiction.

Southwest Airlines Co. v. Saxon

Employers often include arbitration clauses in their employment agreements. Such a clause limits an employee’s ability to pursue claims in court and before a jury, and that clause is often accompanied by a waiver of the right to pursue a collective action in a wage and hour lawsuit. Even so, an employer’s right to compel arbitration under federal law is restricted by the reach of the FAA, which does not “apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.

The question in Saxon was whether employees who do not physically cross state lines but are involved in the loading and unloading of cargo that has been shipped in foreign or interstate commerce belong to a “class of workers engaged in foreign or interstate commerce” and,...



Read Full Story: https://www.jdsupra.com/legalnews/supreme-court-addresses-federal-4691537/