US Supreme Court to decide scope of arbitration exemption for transpor…

US Supreme Court to decide scope of arbitration exemption for transpor…

A delivery worker is pictured in New York City, New York, U.S., September 23, 2021. REUTERS/David ‘Dee’ Delgado Acquire Licensing Rights

  • High court to decide if exemption applies outside transportation industry
  • Case involves delivery workers for a bakery
  • Scope of exemption has been litigated extensively

Sept 29 (Reuters) – The U.S. Supreme Court on Friday said it would decide whether an exemption from mandatory arbitration of employment-related legal claims for transportation workers is limited only to employees of companies in the transportation industry.

The court granted a petition by Neal Bissonnette, a former delivery driver for LePage Bakeries Park St. LLC, for review of an appeals court ruling that said an exemption in the Federal Arbitration Act (FAA) did not apply to him because he worked in the bakery industry.

The question, which has divided appeals courts, could have major consequences for companies such as retailers and manufacturers that employ many truck drivers and other delivery workers but do not make money from providing transportation services.

Workers who sign agreements to arbitrate legal claims generally cannot file or join class action lawsuits, and individual claims brought under wage laws are often too small to be worth pursuing. More than half of private-sector U.S. workers have signed arbitration agreements.

Lawyers for Bissonnette and LePage, a subsidiary of Georgia-based Flowers Foods, did not immediately respond to requests for comment.

The FAA requires arbitration agreements to be enforced according to their terms, but includes an exception for employment contracts “of seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce.” In a 2001 ruling, the Supreme Court said the exemption applied only to transportation workers.

In the LePage case, Bissonnette claims the company misclassified delivery drivers as independent contractors and violated various wage laws.

The 2nd U.S. Circuit Court of Appeals last year said drivers had to bring those claims in individual arbitration. The court said that in order for workers to qualify for the FAA exemption, they must be employed in the transportation industry.

The 11th Circuit has come to a similar conclusion. But the 1st and 7th Circuits in cases involving a retailer and a cement company have held that the FAA exemption applies to any class of workers engaged in interstate commerce.

The scope of the FAA exemption has been litigated extensively in recent years, including its application to “gig economy” companies like Uber Technologies Inc. Last year, the Supreme Court in a case involving Southwest Airlines baggage handler supervisors said the exemption applies to workers who help move goods across state lines, even if they never do so themselves.

Meanwhile, the high court has twice refused to review rulings that said Amazon.com Inc drivers who make local deliveries are involved in interstate commerce and exempt from the FAA.

The case is Bissonnette v. LePage Bakeries Park St. LLC, U.S. Supreme Court, No. 23-51.

For Bissonnette: Jennifer Bennett of Gupta Wessler

For LePage: Traci Lovitt of Jones Day

Read more:

Amazon again loses bid for SCOTUS review on FAA exemption

U.S. Supreme Court rules Southwest Airlines cannot force wage suit into arbitration

Uber drivers are not interstate workers exempt from arbitration, US court rules

Reporting by Daniel Wiessner

Our Standards: The Thomson Reuters Trust Principles.

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Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at [email protected].