Case preview

Like many cases involving the Federal Arbitration Act, Southwest Airlines v. Saxon It started with an employment dispute: Southwest Airlines employee Latrice Saxon thinks she’s owed overtime pay. Saxon filed a lawsuit in federal court under federal wage and hour laws on behalf of herself and her fellow ramp acting supervisor. Southwest responded that Saxon’s case should be dismissed because she is bound by an arbitration agreement that is enforceable under the FAA. Similar arguments usually succeed in employment cases — but Saxon argues her case is different because the FAA doesn’t apply to interstate transportation workers.

The U.S. Court of Appeals for the Seventh Circuit agreed that Saxon jobs were an exception, and the Supreme Court will hear oral arguments in the case on Monday. If a judge confirms the Seventh Circuit, Saxon will be able to file her overtime claim in court. The final decision could have implications far beyond airline employees like Saxon. Companies like Amazon and Uber are closely watching how this affects the rest of the U.S. workforce that moves goods and people.

The Federal Arbitration Act generally requires a court to enforce an arbitration agreement, but Section 1 The statute exempts “contracts of employment for seafarers, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Saxon was neither a seaman nor a railroad employee—she worked at Chicago’s Midway Airport, overseeing the loading and unloading of luggage and other cargo on planes by tarmac workers, as well as loading and unloading cargo herself. The question in this case, therefore, is whether the Saxon’s work placed her in the “working class” who “engaged in . . . interstate commerce.”

Southwest believes that only workers who are “directly involved in the transport of goods or people across borders” are eligible for the transport worker exemption. The company argues that the definition doesn’t include ramp supervisors like Saxons who don’t accompany cargo on interstate trips. By contrast, the Saxons argue that the transport worker exemption applies to all airline employees, or, at least, it applies to workers who travel interstate by loading goods onto vehicles or unloading them at their destination.

“[A]any other category of workers engaged in foreign or interstate commerce”—sometimes called the residual category—sounds fairly broad. But in the 2001 decision Circuit City Stores, Inc. v. Adamsthe court concluded that this category only covers interstate transport workers. circuit city relies in part on norms known as statutory interpretations same species, which means that when a statute contains a list of similar terms followed by an all-inclusive or residual term, the latter should be interpreted to include only items similar to the former. Applying the rule, the court concluded that the remaining categories only included categories of workers similar to seafarers and railroad employees because they worked in interstate commerce.

also circuit citythe court explained the transport worker exception in a separate case, The new premier company five.Oliveira. exist new prime minister, the court unanimously ruled that independent contractors working in interstate commerce were exceptional. Key to the decision was the Court’s view that when Congress enacted the FAA in 1925, the term “employment contract” was understood relatively broadly—applying to all employment contracts, regardless of whether the parties had an employer-employee relationship.

conform to circuit city and new prime ministerThe parties debated on the ordinary meaning of “to engage in interstate commerce” as understood in 1925, and based on the same species. Southwest began arguing from dictionaries and case law of the relevant period that the term meant “the work of transporting goods or persons from state to state”; it also argued that people would not normally use the word “transport” to refer to The act of loading goods on behalf of them. Saxon points to the FAA itself: Section 1 refers to “a terminal-related agreement…or any other foreign trade matter.” A “terminal” is a cargo handling fee paid to the terminal’s owner, which the Saxons believe means the FAA The drafters of the article understood cargo handling as “foreign trade”. She then went on to say that it makes sense for people who do cargo loading to engage in foreign or interstate commerce. In addition, the Saxons relied on other period-appropriate sources to believe that “interstate commerce” covered the entire journey of a package, from delivery to final destination, including loading onto ships or railcars.

Both sides are very concerned about the meaning of the first two categories listed in the transport worker exemption: railroad employees and seafarers. Southwest believes that what the two groups have in common is frequent transit, and so should workers covered by the “any other class of worker” language. In particular, Southwest Airlines pointed out that in 1925, “seafarers” only meant people who worked on ships and did not include stevedores engaged in loading and unloading ships. Southwest, on the other hand, acknowledged that “railway employee” could theoretically refer to everyone employed by the railroad, but it urged a relatively narrow reading of the term to make more sense in a statutory context.

The Saxons disagreed on who counted as a seaman or railroad employee in 1925, arguing that turn-of-the-century sources interpreted the terms to apply to anyone who facilitated shipping or railroading—including cargo loaders. As such, she offers a different view of the key commonalities between seafarers and rail workers: they are “necessary for the free flow of goods” by sea and rail, just as airline workers are for the free flow of air freight. She also pointed to one reason for the transportation worker exception — Congress didn’t want to undermine other labor dispute resolution systems that cover transportation workers, especially railroad workers — and noted that the Railroad Labor Act broadly covers railroad and airline employees.

In conclusion, Southwest makes a policy argument familiar to many readers: The FAA was enacted to overcome judicial hostility to arbitration, including in the context of employment disputes.But the Saxons responded that with new prime ministerthat courts should not artificially narrow the scope of the transport worker exception, relying in part on legislative history that the exception was added to assure seafarers’ unions that the FAA would not cover stevedores.

The stakes in this case are evident from the amicus brief. Southwest’s backers include Uber, Lyft and Amazon — all of which have employees involved in the transportation of goods or passengers. Although drivers sometimes cross state lines or deliver passengers and luggage at the beginning or end, ride-hailing companies have typically urged courts to rule the case in a way that excludes their drivers from the transport worker exemption. Interstate travel. Amazon’s concern is for local delivery drivers, who deliver goods on the last leg of interstate trips, and two appeals courts have ruled that they fall under the transport worker exception.

The last time the Supreme Court explained the transport worker exception was in new prime minister In 2019, it made a unanimous decision in favor of workers opposed to arbitration — a surprising result when one considers the court’s recent string of pro-arbitration decisions. Whether the case will yield a similar outcome will likely depend on how the justices interpret the century-old record on whether land-based workers such as stevedores engage in interstate commerce.