Readers of this blog will know that attorneys at Spitz, The Employee’s Law Firm have their concerns with the Federal Arbitration Act, or the “FAA” for short. (See Step 1: House Passes Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act; US Supreme Further Limits Employer’s Arbitration Rights; The United States Supreme Court Re-Affirms Its Preference for Arbitration In Employment Discrimination Cases; ). Those issues are well-founded: employers often wield the FAA and its supposed “strong policy favoring arbitration” to fashion arbitration agreements that stack the deck against employees.
How so? Well . . . employers craft agreements that force employees to waive their jury rights and bring any claims they may have against the company to an arbitrator. Those arbitrators are often themselves lawyers who have experience representing companies—not employees—in civil-rights cases. And unlike a public trial, arbitration proceeds in private and usually limits the right to appeal a bad decision. And because the FAA makes arbitration agreements as enforceable as other contracts, most employees have no real choice when a company makes agreeing to arbitration a requirement to get the job.
But just because the FAA allows employers to do this to most employees, it does not apply to all employees. Section 1 of the FAA excludes certain employees from the Act’s coverage. Specifically, the FAA 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. Those first two categories seem straightforward. “Seamen” and “railroad employees” are fairly specific classes of employees. On the other hand, a “class of workers engaged in foreign or interstate commerce” is a fairly broad category.
How do I know whether I am within the “class of workers” not covered by the FAA?
Best Employment Lawyer Answer: The Supreme Court of the United States examined that question in Southwest Airlines Co. v. Saxon, which held that employees “who load cargo on and off airplanes” are within the “class of workers” exempted from the FAA. 2022 WL 1914099, *6 (U.S. June 6, 2022).
Some context helps: Latrice Saxon worked as a ramp supervisor for Southwest Airlines at Midway International Airport in Chicago. In that role, Saxon had two main responsibilities. First, she trained and supervised “ramp agents,” the employees who mainly “physically load and unload baggage, airmail, and freight.” Id. at *3. Second, ramp supervisors often assist ramp agents by “step[ping] in to load and unload cargo.” Id.
Saxon’s lawsuit began when she suspected that Southwest violated the Fair Labor Standards Act of 1938 by failing to pay her and other ramp supervisors proper overtime wages. (See also What Can I Do If I’m Not Paid For All My Hours?; Are Outside Salespeople Exempt Form Overtime Pay Under The FLSA?) In response, Southwest moved to dismiss the lawsuit, arguing that Saxon agreed to arbitrate wage disputes when she signed her employment contract. Saxon countered by arguing that the arbitration agreement was invalid because she fell within the “class of workers engaged in foreign or interstate commerce” excluded from the FAA. After Saxon appealed the trial court’s decision, the United States Court of Appeals for the Seventh Circuit held that the FAA’s exemption applied, disagreeing with a Fifth Circuit opinion that came out the opposite way.
The Supreme Court of the United States took Saxon’s case to resolve that split. In doing so, the unanimous Court held that “airplane cargo loaders,” including ramp supervisors like Saxon, are within the exempted “class of workers” under the FAA. Central to this holding, the Court analyzed its past decisions the addressed the text and history of the FAA. Those decisions had defined the exempted “class of workers” as “transportation worker[s].” Id. (quoting Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119, 121 S.Ct. 1302, 1311, 149 L.Ed.2d 234 (2001)). And even though the Court did not completely define “transportation worker,” it held that those workers must “play a direct and ‘necessary role in the free flow of goods’ across borders.” Id. In other words, the FAA does not apply to workers “actively ‘engaged in transportation’ of *** goods across borders via the channels of foreign or interstate commerce.” Id.
Put more plainly: employees who are “directly” responsible for shipping or receiving goods are exempt from the FAA.
So, are all airline employees exempt from the FAA?
No. The Saxon decision makes that much clear: the Court rejected the “argument that [the FAA] exempts virtually all employees of major transportation providers.” 2022 WL 1914099 at *7.
So what are the key takeaways?
There are two:
First, the appropriate focus is not the employer’s line of business, but the employee’s job responsibilities. Under that approach, a graphic designer or janitor for an airline likely cannot escape an otherwise valid arbitration agreement. At the same time, Saxon clarifies that the exemption applies to more than just those employees who “physically move goods or people across foreign or international boundaries.” Id. In other words, the exemption applies to ramp loaders whose job is limited to one city just as it applies to “pilots, ship crews, locomotive engineers,” and boat captains who traverse state lines. Id.
Second, the Court’s decision applies to the FAA, which is federal law. But some states have their own “Arbitration Act” that may differ. For example, the Ohio Arbitration Act, R.C. 2711.01 et seq., generally follows the FAA, but contains some important differences. Relevant here, the Ohio Arbitration Act does not exempt transportation workers like the FAA. See R.C. 2711.01. As a result, employees like Latrice Saxon may have a harder time fighting arbitration agreements under the Ohio Arbitration Act than they would under the FAA.
How do I sue my employer without going to arbitration?
Best Employment Lawyer Answer: Each case will be different and your best bet to avoid arbitration is to hire an attorney that focuses on employment issues and has a history of fighting arbitration agreements. If you are searching “I need a lawyer because I have been wrongfully fired or terminated;” or “I have been discriminated against or harassed based on my …” race, national origin, gender, age, religion or disability; or even think that you might need an employment lawyer, then it would be best to call the right attorney to schedule a free and confidential consultation. (Read: What is the Spitz No Fee Guarantee?) Call our lawyers in Cleveland, Columbus, Detroit, Toledo, Raleigh and Cincinnati to get help now. Spitz, The Employee’s Law Firm and its experienced attorneys are dedicated to protecting employees’ rights and solving employment disputes.
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