June 10, 2022

Supreme Court Rules Airline Baggage Handlers Cannot Be Forced Into Arbitration

You've Reached Your
Free Article Limit This Month
Register for free to get unlimited access to all OnPractice content.
Register Now

Key Takeaways

  • The Supreme Court ruled earlier this week that airline baggage handlers cannot be compelled to arbitrate employment disputes under the Federal Arbitration Act.
  • Employees may seize on the decision in an attempt to avoid mandatory arbitration provisions in the transportation industry, including gig economy workers.
  • Learn how this decision impacts employers.

The United States Supreme Court ruled on Monday that airline baggage handlers cannot be compelled to arbitrate employment disputes under the Federal Arbitration Act (FAA). Although the ruling is narrow in scope, employees may seize on it in an attempt to avoid mandatory arbitration provisions in the transportation industry, including gig economy workers. 

Summary of the Supreme Court's Decision

In Southwest Airlines Co. v. Saxon, No. 21-309 (June 6, 2022), a Southwest Airlines ramp supervisor, Latrice Saxon (Saxon), filed a putative class action in federal court alleging that the airline failed to pay proper overtime wages to her and other ramp supervisors. The airline sought to enforce its arbitration agreement with Saxon and moved to dismiss the complaint under the FAA. In response, Saxon invoked § 1 of the FAA, which exempts from the statute's ambit "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Saxon argued that ramp supervisors were an exempt "class of workers engaged in foreign or interstate commerce." The District Court disagreed, holding that only those involved in actual transportation, and not the mere handling of goods, fell within the exemption. The Seventh Circuit Court of Appeals reversed. It concluded that the act of loading cargo onto a vehicle to be transported interstate is itself commerce. Since it was undisputed that ramp supervisors load and unload cargo, they fell within the exemption. The Seventh Circuit's decision conflicted with an earlier Fifth Circuit decision.

The Supreme Court, in a unanimous opinion written by Justice Thomas, affirmed the Seventh Circuit's decision. It held that since Saxon "frequently loads and unloads cargo on and off airplanes that travel in interstate commerce," she "belongs to a ‘class of workers engaged in foreign or interstate commerce'" to which the arbitration exemption in § 1 of the FAA applies. Consequently, Saxon was not required to comply with her arbitration agreement and could instead pursue her claim in federal court. In reaching this conclusion, the Court rejected the interpretations both Saxon and the airline offered. Saxon argued that the exemption covered all employees of major transportation providers; the airline argued that the exemption covered only workers who physically move goods or people across boundaries (e.g., pilots). The Supreme Court instead explained that any worker involved in transporting goods across state or international borders falls within the exemption.


Although the Court confirmed that the FAA's arbitration exemption does not apply to all airline workers, it left open difficult questions regarding which class of airline workers are included, as well as questions about what other industries might be subject to § 1's exemption. It's clear, however, that the exemption is unlikely to apply to workers who are not facilitating the transportation of goods across state lines or crossing those lines themselves. Furthermore, the decision does not appear to strike a retreat from the Court's commitment to enforcing mandatory arbitration provisions in employment agreements as a general matter. And employers can still compel workers to arbitrate their claims under most state arbitration laws.   

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

More From Buchanan Ingersoll & Rooney

Ninth Circuit Refuses to Boot FLSA Claims: Time Spent Logging On is Compensable

By Christian Antkowiak Buchanan Ingersoll & Rooney November 10 , 2022

Is an employer obligated to pay employees for the time spent booting up and signing into their computers prior to clocking in?

Protecting Your Brand - Amazon's Brand Registry Program

By Bassam N. Ibrahim Buchanan Ingersoll & Rooney November 09 , 2022

Trademarks are a useful tool for brand protection.

SEC Adopts Final Incentive Compensation Clawback Rules

By Jennifer R. Minter Buchanan Ingersoll & Rooney November 04 , 2022

On October 26, 2022, the Securities and Exchange Commission (SEC) adopted final rules that will require listed companies to disclose and implement policies to “claw back” or recover incentive compensation paid as a result of erroneously reported financial information that is subject to a required accounting restatement.

More From Labor Law

The End of AB 51?

By Charles O. Thompson Greenberg Traurig May 18 , 2023

On Feb. 15, 2023, the Ninth Circuit in Chamber of Commerce v. Bonta issued its ruling on the ongoing question of Assembly Bill (AB) 51’s enforceability in relation to arbitration agreements, where the court once again affirmed that the Federal Arbitration Act (FAA) preempts AB 51.

Top Five Labor Law Developments for April 2023

By Jonathan J. Spitz Jackson Lewis P.C. May 10 , 2023

The National Labor Relations Board returned to its prior standard for analyzing the legality of disciplining employee misconduct related to protected concerted activity.

California Supreme Court to Have 'Last Word' on Viking River

By Lindsay E. Hutner Greenberg Traurig May 04 , 2023

The California Supreme Court will soon hear oral argument on the much-anticipated Adolph (Erik) v. Uber Technologies, Inc., (Uber), accepting Justice Sotomayor’s invitation in Viking River Cruises to have the “last word” on whether an employee forced to arbitrate their individual Private Attorneys General Act (PAGA) claims maintains statutory standing to pursue PAGA claims on a representative basis within the court system, based on violations other employees suffered.

Featured Stories