Airline Baggage Handlers Arbitration Contract Requirement Unenforceable under Federal Arbitration Act
Southwest Airlines Co. v. Saxon, U.S. Sup.Ct. No.21-309, 2022 U.S. LEXIS 2815 *, 2022 WL 1914099 (June 6, 2022)
For the second time in three years, the U.S. Supreme Court has addressed the breadth of the “transportation workers” exception to the Federal Arbitration Act. In New Prime, Inc. v. Oliveira,1 the Supreme Court held that an arbitration clause in a contract with an independent contractor truck driver engaged in interstate commerce was unenforceable under the transportation worker exception to the FAA.
The Court in the Saxon case granted writs to resolve the conflict between the Fifth Circuit2 and Seventh Circuit.3 The Fifth Circuit held that the interstate transportation exception did not apply to employees who load or unload cargo; rather they must be engaged in the “aircraft's actual movement in interstate commerce.”4 The Seventh Circuit took a broader view and held that the inquiry is the employee’s “relationship with interstate or foreign commerce.”5
The Supreme Court unanimously rejected the approach of the Fifth Circuit that the employee must be actually engaged in the movement of the aircraft in interstate commerce. The Court also rejected the proposition of the employee that the class of workers includes all employees in the air transportation industry. Justice Thomas, as author of the opinion, applied two well-settled canons of statutory interpretation: (1) the meaningful variation cannon and (2) the ejusdem generis cannon.6 Both canons lead to the conclusion that only transportation workers “actively 'engaged in transportation’ of those goods across borders via the channels of foreign or interstate commerce”7 fall within the exception of the FAA. As the employee loaded and unloaded cargo on airplanes engaged in interstate commerce, the arbitration provision is unenforceable. The Court affirmed the Seventh Circuit.8
A PDF copy of the slip opinion from the Supreme Court is attached.
1 139 S.Ct. 532 (2019)
2 Eastus v. ISS Facility Servs., 960 F.3d 207 (5th Cir. 2020)
3 Saxon v. Southwest Airlines, Co., 993 F.3d 492 (7th Cir. 2021)
4 960 F.3d at 212
5 993 F.3d at 502
6 2022 U.S. LEXIS 2815 at *12 (ejusdem generis: “of like kind”)
7 Id. at *13
8 Id. at *20-21
