The Federal Arbitration Act (9 U.S.C. sec. 1 et. seq.)(the “Act”) sets forth federal policy favoring arbitration of disputes. Many employers require that their employees arbitrate employment disputes. However, the Act exempts “workers engaged in foreign or interstate commerce” and such workers may not be compelled to arbitrate disputes with their employers.
In Saxon v. Southwest Airlines (993 F. 2nd 492) the Seventh Circuit Court reviewed a lower court decision holding that a Southwest Airlines worker was required to arbitrate her employment dispute with the airline. The female employee was a ramp supervisor who managed workers loading and unloading cargo for Southwest Airlines. Southwest required that she abide by an arbitration requirement in her employment contract. The issue was whether she qualified as a “transportation worker engaged in interstate and foreign commerce” and therefore could not be compelled under the Act to arbitrate her employment dispute.
After much consideration, the circuit court concluded that airplane cargo loaders are a class of workers engaged in interstate and foreign commerce and that the ramp supervisor was a member of that class. Therefore, she qualified as a transportation worker whose contract of employment was exempt from the Federal Arbitration Act. The above decision of the Seventh Circuit Court is now up for review by the United States Supreme Court. If the Circuit Court’s ruling is upheld it will result in a large class of employees having the right to try their employment disputes in court regardless of employment contracts requiring arbitration.
To learn more about how the FAA impacts your arbitration agreements with your employees contact the Attorneys at Chauvel & Glatt.
This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500 for legal assistance near you. (Photo Credit depositphoto.com.)