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On June 6, 2022, the U.S. Supreme Court issued a unanimous decision holding that notwithstanding the arbitration clause in her employment contract, a ramp agent supervisor who was frequently required to load and unload cargo from airplanes for cross-country travel is a member of the “class of workers” engaged in interstate commerce so as to be exempt from the Federal Arbitration Act (“FAA”), and thus allowed to have her day in court.

The FAA typically requires courts to enforce agreements to arbitrate, but the Act carves out certain narrow exceptions. Relevant here, Section 1 of the FAA exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Earlier Supreme Court precedent made clear that to qualify for exemption under Section 1, an employee must be a “transportation worker,” but the Court declined to define the precise contours of that term.

Enter Latrice Saxon, a ramp agent supervisor for Southwest Airlines. Saxon brought a wage and hour collective action accusing Southwest Airlines of failing to pay overtime wages as required under the Fair Labor Standards Act. In response, Southwest invoked the FAA and sought to enforce the arbitration clause in Saxon’s employment agreement. Saxon countered that ramp supervisors are transportation workers exempt from the FAA. The District Court disagreed, but the Court of Appeals reversed.

On review, the Supreme Court sided with Saxon, concluding that, like seamen and railroad workers, 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.” As such, the FAA exemption for transportation workers applies.

While the decision may on first read seem a victory for employees, equally significant is what the Court declined to do. In particular, the Court refused to adopt an industry-wide approach to the interstate commerce exemption from the FAA. In other words, the mere fact that an employer is engaged in interstate commerce is not enough to vitiate an otherwise valid arbitration agreement. To qualify for exemption, the employee’s own day-to-day activities must include performance of “activities within the flow of interstate commerce.” So, not all employees of an airline will fit within the exemption … but Saxon did.