Airline supervisors exempt from Federal Arbitration Act, 7th Circuit finds

The Federal Arbitration Act (FAA) enforces voluntary arbitration agreements involving federal law, including some employment-related disputes. Section 1 of the Act exempts certain classes of workers from the arbitration requirement, however, including seamen, railroad workers, and workers engaged in foreign or interstate commerce. So, when employees don’t physically transport goods, can they be engaged in commerce and thus exempt from arbitration? The issue was recently addressed by the U.S. 7th Circuit Court of Appeals (which covers Wisconsin employers).

FAA refresher

In 1925, Congress enacted the FAA, favoring arbitration to resolve employment disputes by enforcing certain arbitration agreements. Congress also placed a limit on the Act, however, exempting seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce from arbitration.

In 2001, the U.S. Supreme Court held the FAA exemption applies only to “transportation workers.” Therefore, courts must determine if an employee qualifies as a transportation worker to know whether the Act applies.

Airline supervisor’s claims

Latrice Saxon, a Southwest Airlines ramp supervisor, filed a collective action against her employer for failing to pay ramp supervisors for overtime work under the Fair Labor Standards Act (FLSA). Her job included supervising, training, and assisting ramp agents who are responsible for loading and unloading commercial cargo from airplanes.