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Forced arbitration suit pushes high court to define transportation workers

With cases piling up and lower courts at odds, the justices look for a solution for an evolving transportation economy.

WASHINGTON (CN) — The Supreme Court heard an arbitration case on Monday concerning an airline worker fighting for overtime pay where the justices looked for a narrow ruling on a growing problem. 

As a ramp supervisor at Southwest Airlines, Latrice Saxon loads and unloads cargo from planes. Saxon claims Southwest didn’t properly compensate her and other employees for overtime they are due. In an attempt to recoup that lost money, Saxon sued Southwest on behalf of herself and other workers, but her suit was complicated by an arbitration clause that was a condition of her employment. 

The Federal Arbitration Act requires courts to enforce private arbitration agreements. However, section one of the statute exempts seamen, railroad employees or any other class of workers engaged in foreign or interstate commerce from these agreements. 

Southwest moved to dismiss the suit under the FAA because Saxon had signed an arbitration agreement, but Saxon argues the FAA does not apply because her job categorizes her among the workers who are exempt from arbitration agreements under the FAA. 

A district court found that airline employees who load and unload interstate cargo are not exempt from the FAA, but in a unanimous decision, the Seventh Circuit reversed, finding that ramp employees were engaged in foreign or interstate commerce. Southwest then appealed to the nation's high court. 

The question before the court is whether workers who load or unload goods from vehicles that travel in interstate commerce but do not physically transport such goods themselves are interstate transportation workers exempt from the FAA. 

The justices spent most of their time during oral arguments Monday parsing hypotheticals trying to drill down who exactly should be considered an interstate transportation worker. 

Much of the hearing was consumed by the court’s 2001 precedent in Circuit City v. Adams which held that most workers engaged in foreign or interstate commerce can be forced into arbitration, confining the section one exemption to transportation workers. 

Justice Brett Kavanaugh drilled down on the court’s conflict over how the court’s language in Circuit City applies in this case.

“The court has a precedent interpreting the language and the question is whether, I think, whether we should think that precedent makes sense with the exact or very similar language and another contemporaneous statute,” the Trump appointee said. 

Southwest claims Circuit City found that workers are only exempt if they engage in foreign or interstate transportation and that Congress specified that the exemption applies only to employees working on that transportation. Southwest compares Saxon’s situation to that of seamen and stevedores. 

“Congress excluded stevedores, who are land-based cargo loaders,” said Shay Dvoretzky, a Skadden Arps attorney representing Southwest. “Now Saxon says the exemption covers the entire airline industry. … Cargo loaders don't work on planes just as the stevedores didn't work on ships. They load cargo before other classes of workers like seamen and pilots do the foreign or interstate transportation. They may facilitate transportation, but that's not the test Circuit City requires.” 

Saxon claims that if Congress wanted to exclude workers who didn’t cross state lines but assisted in interstate commerce from the FAA then they would have done so. 

“If Congress wanted to exempt from the FAA just those workers aboard an instrumentality of commerce crossing state lines, it easily could have said so,” Jennifer Bennett, an attorney with Gupta Wessler representing Saxon, said. “Instead, it excluded the employment contracts of seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce.” 

Bennett argued transportation workers are a narrow class category of workers but Chief Justice John Roberts seemed to be skeptical of how the court’s ruling could affect large companies. 

“What about workers for a company like Amazon or something who are obviously shipping goods across state lines?” Roberts asked. “It doesn't sound like a narrow group to me.” 

Much of the justices' apprehension around the case concerns the ripple effects their decision could have on large portions of the American workforce that move goods and people. The possibility that their ruling could have implications for companies like Uber, Amazon, and Lyft — who all filed amicus briefs in the case — was not lost on the justices. 

In its brief, Amazon urged the high court to use the case to create a workable test for this kind of litigation, which it noted was becoming more common. 

“The Court can, and should, end it by adopting a workable test for separating the exempt from the non-exempt,” wrote David Salmons, an attorney with Morgan, Lewis & Bockius representing Amazon. “Without such a test, confusion and litigation over threshold arbitrability issues will continue indefinitely, as roles in the transportation sectors of our economy continue to evolve.” 

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