Seventh Circuit: Cargo Loading is Interstate Commerce, Exempt from Arbitration under FAA
The Seventh Circuit Court of AppealsFN1 recently held that a ramp supervisor’s cargo loading duties qualified as engaging in commerce under the Federal Arbitration Act (“FAA”), exempting her from Arbitration under the FAA.FN2 The FAA generally requires courts to enforce arbitration agreements, but has an exemption for railroad workers, seamen and "any other class of workers engaged in foreign or interstate commerce."FN3 The Seventh Circuit reversed a district court decision which agreed with Defendant Southwest Airlines Co. that loading and unloading cargo was not enough to qualify a worker as engaging in commerce because the phrase refers only to “actual transportation.” The Seventh Circuit concluded that "[a]ctual transportation is not limited to the precise moment either goods or the people accompanying them cross state lines. Loading and unloading cargo onto a vehicle so that it may be moved interstate, too, is actual transportation, and those who performed that work were recognized in 1925 to be engaged in commerce."FN4
Takeaway
This decision broadens the scope of potential job positions that are exempt from the FAA, and employers should determine whether their employees may qualify for this exemption before entering into arbitration agreements with them. Please contact the attorneys at Campbell Litigation if you have any questions regarding arbitration agreements and possible exempt employees under the FAA.
FN1 – The Seventh Circuit has federal appellate jurisdiction over district courts in Illinois, Indiana, and Wisconsin.
FN2 – See Latrice Saxon v. Southwest Airlines Co., Case No. 19-3226 (7th Cir. March 3, 2021), available at http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2021/D03-31/C:19-3226:J:St__Eve:aut:T:fnOp:N:2682695:S:0
FN3 – See 9 U.S.C. § 1 (2020).
FN4 – See FN2.