US Supreme Court seems unlikely to limit FAA exemption to transportation companies

Flowers Foods

20/02/2024 20:25

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      Bakery claims drivers are not 'transportation workers' 
    

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      At stake is whether many workers can sue as a class in
court
    

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      Justices seemed uneasy with bid to limit exemption
    

  
    By Daniel Wiessner
       Feb 20 (Reuters) - Justices on the U.S. Supreme Court on
Tuesday sounded skeptical of claims by a subsidiary of Wonder
Bread maker Flowers Foods that a federal law exempting workers
involved in interstate commerce from mandatory arbitration of
legal disputes only applies to employees of transportation
companies. 
    The justices heard oral arguments in an appeal by Neal
Bissonnette, a former delivery driver for Flowers unit LePage
Bakeries Park Street, of a 2nd U.S. Circuit Court of Appeals
ruling that said an exemption in the Federal Arbitration Act
(FAA) did not apply to him because he worked in the bakery
industry.
    Bissonnette is seeking to revive a proposed class action
accusing LePage of misclassifying drivers who delivered baked
goods to retailers as independent contractors rather than
employees in court even though he signed an agreement to bring
legal disputes in arbitration. 
    A ruling for Bissonnette could expose companies in a range
of industries, including retail, food distribution and
manufacturing, to an increased number of lawsuits by
transportation and delivery workers. Many companies require
workers to sign arbitration agreements and claim individual
arbitration is quicker and more efficient than resolving
disputes in court.
    The FAA, adopted in 1925, requires arbitration agreements to
be enforced according to their terms but exempts employment
contracts "of seamen, railroad employees, and any other class of
workers engaged in foreign or interstate commerce.” 
    The Supreme Court in a 2001 ruling said the exemption
applied only to transportation workers, and since then appeals
courts have split over whether that means any worker who
transports goods or only those employed by companies that
provide transportation services. 
    Much of Tuesday's hour-long arguments focused on whether
Congress singled out seamen and railroad workers in the FAA
because they worked in the transportation industry, or because
of their job duties. 
    Jennifer Bennett, who argued for Bissonnette, told the court
that the fact that Congress named specific groups of workers,
rather than referencing shipping companies and railroads, showed
that the exemption could apply in any industry. But LePage's
lawyer, Traci Lovitt of Jones Day, said that in 1925 seamen and
railroad workers were understood to be involved in moving cargo
for third parties.
    Several justices, including members of the court's
conservative wing, signaled they were skeptical of LePage’s
arguments. Justice Samuel Alito said that focusing on what an
employer does, rather than a worker’s job duties, would create
confusion. 
    “It really imposes a difficult burden and it would seem to
me … you’d have a conflict among the lower courts in considering
how this applies,” Alito said, adding that, for example, it
would be difficult to determine whether Amazon.com was in the
transportation industry.
    The Supreme Court is currently considering whether to take
up the question of whether Amazon drivers who make local
deliveries are covered by the FAA exemption, after turning away
two similar cases involving the online retailer in recent years.
    Lovitt replied the inquiry was straightforward and depends
on whether a company is in the business of hauling goods for
third parties. Under that standard, she said, Amazon is clearly
a transportation company because it ships products made by other
companies.
    The justices also suggested that the court's unanimous 2022
ruling in Saxon v. Southwest Airlines that the FAA exemption
applied to baggage handler supervisors had already made clear
that workers' job duties were the key factor. 
    “We have looked at the performance of the workers in Saxon,
and wouldn’t it complicate matters now to look at the entire
industry? I thought we foreclosed that in Saxon,” Justice
Clarence Thomas said to Lovitt.
    Lovitt said LePage was not seeking to supplant the test laid
out in Saxon, but to supplement it with a threshold inquiry into
whether a worker is employed by a transportation company. 
    The case is Bissonnette v. LePage Bakeries Park St. LLC,
U.S. Supreme Court, No. 23-51.
    For Bissonnette: Jennifer Bennett of Gupta Wessler
    For LePage: Traci Lovitt of Jones Day
    
    Read more:
    US Supreme Court to decide scope of arbitration exemption
for transportation workers
    U.S. Supreme Court rules Southwest Airlines cannot force
wage suit into arbitration
    
  

 (Reporting by Daniel Wiessner in Albany, New York)
 ((daniel.wiessner@thomsonreuters.com))