This Report summarizes opinions issued on June 6 and 8, 2022 (Part I); and cases granted review on June 6, 2022 (Part II).

Opinion: Southwest Airlines Co. v. Saxon, 21-309

Southwest Airlines Co. v. Saxon, 21-309. In an 8-0 opinion, the Court held that an employee who frequently loads and unloads airplane cargo is exempt from the Federal Arbitration Act because she is part of a “class of workers engaged in foreign or interstate commerce.” Southwest Airlines employs ramp agents who physically load and unload cargo. Ramp agents are trained and supervised by ramp supervisors who frequently load and unload cargo alongside the agents. In her employment contract as a ramp supervisor, respondent Latrice Saxon agreed to arbitrate wage disputes individually, but she nevertheless brought a putative class action against Southwest, alleging that the airline failed to pay proper overtime wages to ramp supervisors. Southwest sought to enforce the arbitration agreement under the FAA and dismiss the lawsuit. Saxon countered that the FAA does not apply to her because Section 1 exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The district court held that the exemption applied only to those involved in “actual transportation,” not the mere handling of goods. The Seventh Circuit reversed, holding that commerce includes loading cargo onto a vehicle to be transported. The Court affirmed the Seventh Circuit in an opinion by Justice Thomas. (Justice Barrett took no part in the consideration of the case.)

The Court first considered the relevant “class of workers” under the FAA. Noting that the term “seamen” does not include all workers in an industry, the Court rejected Saxon’s argument that virtually all airline employees are exempt from the Act’s coverage because the air transportation industry as a whole is engaged in interstate commerce. But the Court also rejected Southwest’s argument that only workers who physically cross borders are engaged in foreign or interstate commerce. The Court reasoned that the ambiguous term “railroad employees” shows that the exemption is not limited to workers who travel. Instead of adopting either party’s broadest view, the Court noted that the FAA uses the term “workers” (rather than “employees” or “servants”), which directs the reader’s attention to “the performance of work.” The Act also uses the word “engaged,” which emphasizes the actual work carried out by the class. Therefore, found the Court, Saxon is a member of a class of workers “based on what she does at Southwest, not what Southwest does generally.” Since Southwest did not meaningfully contest the type of work done by ramp supervisors, the Court accepted that Saxon belongs to a class of workers that frequently loads and unloads cargo. The Court noted that it did not consider whether supervision of cargo loading alone would suffice to exempt a class of workers from the FAA.

Next, the Court considered whether cargo loaders are “engaged in foreign or interstate commerce.” Looking to the dictionary, the Court noted that to be “engaged” means to be “occupied,” “employed,” or “involved” in something, and “commerce” includes “the transportation of . . . goods, both by land and by sea,” or the “exchange of merchandise on a large scale between different places or communities.” Accordingly, the statutory exemption applies to any class of workers “directly involved in transporting goods across state or international borders.” The Court found that airplane cargo loaders fit this description because they are “intimately involved with the commerce (e.g., transportation) of that cargo.” The Court cautioned that, depending on how far removed from interstate or international commerce a class of workers is, the answer will not always be so plain.