Supreme Court backs Southwest Baggage worker on arbitration (2)

The United States Supreme Court sided with a Southwest Airlines Co. baggage handling supervisor seeking to avoid having to go to arbitration over his overtime pay claim, ruling in a case with possible implications for Uber drivers and Amazon warehouse workers.

The justices unanimously ruled Monday that the supervisor was not covered by a 1925 federal law that requires enforcement of agreements to take claims to arbitration rather than to court. The majority said the employee qualified for an exception in that law for workers engaged in foreign or interstate commerce.

The case was being watched closely because of the potential impact on other jobs in the transportation and shipping industries. Uber Technologies Inc., Lyft Inc. and Amazon.com Inc. all filed briefs supporting Southwest, urging the court not to interpret the federal arbitration law exception as covering their workers.

The decision did not explicitly say how workers in these industries will be affected. Write for the court, Justice Clarence Thomas appeals dismissed to exempt virtually all employees of major transport providers. But he also said some workers are exempt from the arbitration law even if they don’t physically cross a border.

“Air freight loaders are obviously performing activities in the flow of interstate commerce when handling goods traveling in interstate and foreign commerce, either to load them for air transport or to unload them upon arrival”, wrote Thomas.

Justice Amy Coney Barrett did not participate. Although Barrett gave no explanation, she served on the federal appeals court which decided the case.

The ruling sends the case to a lower court, where Southwest continues to make a different argument, based on Illinois state law, to refer the suit to arbitration.

The case involved Latrice Saxon, who works at Chicago’s Midway International Airport as a ramp agent supervisor, overseeing the loading and unloading of baggage onto and off planes. As a condition of his employment with Southwest, Saxon signed an agreement to take any pay disputes to arbitration, rather than filing a lawsuit. She is seeking to sue on behalf of ramp agent supervisors nationwide.

Southwest said the impact on the business will be “minimal,” in part because its arbitration program only applies to non-union employees.

“Because non-union employees rarely handle merchandise on a regular basis, Southwest will continue to rely on federal arbitration law to enforce its arbitration program going forward,” Southwest said in a statement sent by email.

The Supreme Court has upheld arbitration in a series of past cases, pointing to the 1925 law and its requirement that arbitration agreements be enforced like any other contract. The tribunal ruled in 2018 that companies can generally enforce employee arbitration agreements even if they prohibit group claims.

But the court said on Monday that Saxon had an exemption in that law for “seafarers, railway employees or any other class of workers engaged in foreign or interstate commerce.”

The case is Southwest Airlines v. Saxon, 21-309.

(Updates with Southwest’s reaction to the ninth and tenth paragraphs.)

–With the help of Marie Schlangenstein.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story:
Elisabeth Wasserman to ewasserman2@bloomberg.net

© 2022 Bloomberg LP All rights reserved. Used with permission.

Leave a Reply