Duane Morris Class Action Review - 2023 - Report - Page 16
A.
Southwest Airlines Co. v. Saxon, et al., 142 S.Ct. 1783 (2022)
In the first and arguably the largest door-opener to the courthouse for the plaintiffs’ class
action bar during 2022, the Supreme Court narrowed the application of the Federal
Arbitration Act by expanding its so-called “transportation worker exemption.”
The plaintiff, a ramp supervisor, brought a collective action lawsuit against Southwest
for alleged failure to pay overtime. Id. at 1787. Southwest moved to enforce its
workplace arbitration agreement under the Federal Arbitration Act (FAA). In response,
the plaintiff claimed that she belonged to a class of workers engaged in foreign or
interstate commerce and, therefore, fell within §1 of the FAA, which exempts “contracts
of employment of seamen, railroad employees, or any other class of workers engaged
in foreign or interstate commerce.” Id. The plaintiff filed an “uncontroverted declaration”
stating that, as a ramp supervisor, she “frequently” stepped in to load and unload cargo
on and off airplanes traveling across state lines. Id. at 1787-88.
The district court rejected the plaintiff’s argument and granted Southwest’s motion. It
held that only those involved in “actual transportation,” and not those merely “handling
goods” fall within the exemption. Id. at 1787. The U.S. Court of Appeals for the Seventh
Circuit reversed and the U.S. Supreme Court granted review. As an initial matter, the
Supreme Court noted that Southwest did not “meaningfully contest” that ramp
supervisors like the plaintiff “frequently load and unload cargo.” Thus, it accepted the
premise that the plaintiff “belongs to a class of workers who physically load and unload
cargo on and off airplanes on a frequent basis.” Id. at 1788.
The Supreme Court went on to hold that “any class of workers directly involved in
transporting goods across state or international borders” falls within the exemption. Id.
at 1789. It had no problem finding the plaintiff part of such a class: “We have said that it
is ‘too plain to require discussion that the loading or unloading of an interstate shipment
by the employees of a carrier is so closely related to interstate transportation as to be
practically a part of it.’ . . . We think it equally plain that airline employees who physically
load and unload cargo on and off planes traveling in interstate commerce are, as a
practical matter, part of the interstate transportation of goods.” Id. (citation omitted).
The Supreme Court interpreted the §1 exemption in a way such that contracts with
workers who engage in the process of transportation across state lines are not
enforceable under the FAA. Thus, employers will need to turn to state law to attempt to
enforce those agreements.
B.
Morgan, et al. v. Sundance Inc., 142 S.Ct. 1708 (2022)
In a second door-opener for the plaintiffs’ class action bar during 2022, the U.S.
Supreme Court broadened the circumstances that may give rise to a defendant’s waiver
of the arbitration defense.
The plaintiff, an hourly employee at a Taco Bell franchise, brought a nationwide
collective action lawsuit alleging that Sundance violated the FLSA by failing to pay
overtime. When applying for her job, the plaintiff signed an agreement to use
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Duane Morris Class Action Review – 2023