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Air cargo shippers are exempt under the FAA

Earlier this month, the United States Supreme Court in Southwest Airlines Co. vs. Saxon ruled unanimously that a ramp supervisor who frequently handled cargo for an interstate airline was exempt from coverage under the Federal Arbitration Act (FAA) because she belonged to a “category of workers engaged in foreign or interstate commerce”. 9 USC § 1.

In arriving at this conclusion, the Court’s analysis was twofold. First, he defined the “working class” by looking at “the actual work that members of the class, as a whole, usually do.[ied] outside.” In this regard, the Court defined the category of workers as persons who physically load and unload goods into and out of aircraft on a frequent basis.

Next, the Court considered whether this category of workers was “engaged in foreign or interstate commerce”. The Court held that this was the case because airline employees who physically loaded and unloaded goods on and off planes traveling in interstate commerce were “intimately involved” in cross-border commerce.

Although both parties argued for a broader or narrower application of the exemption, the Court was not persuaded. The tarmac supervisor argued that the “class of worker” should be defined broadly to include all employees who performed the “usual work” of the airline, rather than cargo loaders more specifically. The Court rejected this industry-wide or company-wide approach, which would exempt “virtually all employees of major transportation providers” – from freight loaders to shift planners to those who design the site. Airline web.

The Court also rejected the airline’s argument that only workers who physically move goods or people across foreign or international borders – such as pilots, ship’s crew and locomotive engineers – were ” engaged in foreign or interstate commerce”. Unlike other cases where the Court has found no necessary connection to interstate commerce – such as in the intrastate sale of asphalt for use on highways or the provision of localized janitorial services to a company engaged in interstate commerce – here the case law was clear that aircraft cargo loaders were clearly engaged in activities in the flow of interstate commerce. The Supreme Court ruling clarified the analysis to determine whether a worker qualifies for the FAA’s transportation worker exemption. However, the scope of this exemption will continue to be hotly debated in cases involving other types of workers such as, for example, ‘last leg’ delivery drivers and food delivery drivers, where, as the Court noted, “the answer will not always be so clear.

Copyright © 2022, Hunter Andrews Kurth LLP. All rights reserved.National Law Review, Volume XII, Number 172

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