Today, the Supreme Court settled a long-standing split among lower courts about which kinds of transportation workers qualify for a federal limit on forced arbitration—and, surprisingly, the justices voted unanimously to expand that class of workers. The case at hand involved an airplane cargo supervisor, Latrice Saxon, who took Southwest Airlines to court for overtime issues back in 2019. Southwest argued she couldn’t do that because she was bound by an arbitration agreement. Saxon’s lawyers argued she fell under a carveout in the Federal Arbitration Act for “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” That’s the argument that worked its way up to the country’s top court, which ruled that cargo workers like her do indeed qualify, expanding the size of that carveout at a time when employers have made increasing use of forced arbitration to quash employees’ power to file class-action lawsuits. A split over where to draw the line for that federal carveout has been open for years, resulting in contradictory court opinions for a whole host of industries—a big reason why the Supreme Court took the case. An earlier Supreme Court decision in 2001, one frequently criticized for being anti-worker, ruled that the federal carveout must be narrowly interpreted to apply to only “transportation workers,” without explaining what, exactly, a “transpiration worker” was. Complicating matters, a lower court in 2019 took the initiative to define “any other class of workers” to include not just employees, but contract workers, too. That caused employers in a number of transportation or transportation-adjacent industries—notably Amazon and Uber—to file amicus briefs arguing that this latest case, Southwest Airlines v. Saxon, would affect how courts ruled on similar lawsuits filed against them. (Some of those cases were even paused while the Supreme Court heard Saxon.) Ultimately it comes down to that federal carveout being passed in 1925, back when today’s transportation sector was unthinkable, and decades before the advent of the gig worker. Saxon was being closely watched for its effect on these newcomer gig-worker roles, particularly independent contractors who drive for Uber or deliver for Amazon. However, this opinion by the justices is said not to have ventured much beyond the scope of Saxon and Southwest’s situation, meaning they merely confirmed the federal carveout applies to airplane cargo loaders and unloaders. For the bigger question of how this impacts the broader gig economy and employers like Amazon and Uber, those issues have been punted to a later day.
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Rasmus Hougaard is the founder and managing partner of Potential Project. In 2019 he was nominated by Thinkers50 as one of the eight most important leadership thinkers in the world. He writes for&
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