“The text and history of FAA § 1 establish that it covers only workers who actively transport bulk goods across borders.”
—Cory L. Andrews, WLF General Counsel & Vice President of Litigation
Click here for WLF’s brief
(Washington, DC)—Earlier today, the U.S. Supreme Court agreed to review a Seventh Circuit decision that refused to read section 1 of the Federal Arbitration Act (FAA), known as the “transportation worker exemption,” in line with its text and context. The decision was a victory for Washington Legal Foundation (WLF), which filed one of only two amicus briefs supporting the petition.
The FAA establishes a federal policy favoring arbitration. It requires, in section 2, that most people comply with their arbitration agreements. It contains a discrete exception, in section 1, for “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The district court ruled that the plaintiff, a Ramp Agent Supervisor who does not physically transport goods interstate or even supervise others who do, does not fit within this exemption. The Seventh Circuit disagreed, holding that the plaintiff need not physically cross state lines to be “engaged in foreign or interstate commerce” under section 1.
In its brief successfully urging review, WLF explained that section 1 is not the product of a legislative intent to excuse transportation workers—and, for some peculiar reason, them alone—from honoring arbitration agreements. Section 1 exists, rather, because Congress expected a few discrete classes of workers to engage in arbitration or pursue remedies governed by other federal laws. And because section 1 fulfills this singular purpose, there is no principled way to stretch its application. Although some judge-made tests purport to expand the exception beyond the national and international transportation of goods, WLF argued that these contrived standards defy statutory text and context, produce inconsistent results, and serve no end set forth by Congress.
Celebrating its 44th year as America’s premier public-interest law firm and policy center, WLF advocates for free-market principles, limited government, individual liberty, and the rule of law.