California Mediation and Arbitration

FAA, Interstate Transportation Workers: 9th Circuit Affirms Airline Fuel Technician Falls Within FAA Transportation Worker Exception

Interstate Transportation Workers Are Exempted From Arbitration Under The Federal Arbitration Act.

        We have been remiss reporting on 9th Circuit cases since mid-July 2024. Now, we're doing a little catch-up.

        An airline fuel technician qualifies as a transportation worker engaged in foreign or interstate commerce, and thus he is exempt from the FAA's arbitration requirements under Section 1. Danny Lopez v. Aircraft Service, Int'l, Inc., and Menzies Aviation (USA), Inc. , No. 23-55015 (9th Cir. 7/19/24) (Rawlinson, Melloy, Thomas). The case reinforces the FAA's exemption for transportation workers, emphasizing the functional role of such workers in facilitating interstate and international commerce.

        COMMENT. What is the rationale behind the FAA exemption for seamen and interstate transportation workers? In 1925, when the FAA was enacted, maritime and railroad workers already had developed specialized labor dispute resolution procedures, and perhaps Congress did not want to interfere. Such workers are essential to the flow of commerce, perhaps too explaining their special treatment.

Arbitration, FAA, Transportation Workers: SCOTUS Holds Transportation Worker Exemption Applies To What Workers Do, Not Who They Work For

A 9-0 Opinion Authored By Justice John Roberts.

Wonder Bread Store, B-80, Rock Springs, Wyoming. Photographer: John Margolies. 2004. Library of Congress. No known restrictions.

        The Supreme Court, in a unanimous decision, holds: "A transportation worker need not work in the transportation industry to fall within the exemption from the FAA provided by §1 of the Act." Bissonnette v. LePage Bakeries, 23-51_6647 (Sup. Ct. 4/12/24) (Roberts, J.). 

        Section 1 of the FAA exempts transportation workers from mandatory arbitration. The issue in Bissonnette was whether transportation workers are workers who work for employers in the transportation industry, as the District Court majority and the Second Circuit had ruled, or whether transportation workers are defined by what they do. Justice Roberts explains that transportation workers are defined by what they do.

        We have written about the FAA exemption for transportation workers before. See our sidebar category Transportation Workers.

        BONUS: Baby Boomers may remember advertisements for Wonder Bread, the white bread that made you grow 12 ways. Wonder Bread is one of the "flagship products" of defendant/respondent Flower Foods, Inc., "which it promotes with a 95-foot-tall hot air balloon and a parade float called The Wondership."

FAA, Transportation Workers: Domino's Pizza Drivers Involved In "Last-Leg" Of Interstate Commerce Are Exempt From Arbitration

Ninth Circuit Explains Drivers Inside California May Be Engaged In Interstate Commerce.

        The ingredients for Domino's pizzas are delivered from out-of-state to warehouses in California where they are weighed, redistributed, packaged, and delivered by truck drivers in California to Domino's Pizza franchisees located in California. Do the California drivers qualify as a class of transportation workers exempt from the Federal Arbitration Act under 9 USC § 1? That is the question addressed in Edmond Carmona, et al. v. Domino's Pizza, LLC, 21-55009 (9th Cir.  7/21/23) (Hurwitz, Wardlaw, Parker, Jr.).

        Yes, answers Judge Andrew D. Hurwitz, who authored the panel's opinion. So long as the so-called "last-leg" driver is engaged in an unbroken stream of interstate commerce, the driver qualifies as a transportation worker exempt from the coverage of the FAA. It doesn't matter here that the pizza ingredients are repackaged in the California warehouse and ordered by the California franchisees, because the ingredients are unaltered and travel through a continuous stream of interstate commerce. Judge Hurwitz relies on Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), which he does not find to be incompatible with the Supreme Court's opinion in Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022). In Saxon, the Supreme Court, focusing on the actual work performed by the class of workers, exempted from the FAA “workers who physically load and unload cargo on and off airplanes.”

Arbitration, FAA, Transportation Workers: SCOTUS Holds FAA Transportation Worker Exemption Applies To Airline Workers Who Load Cargo

The FAA Exempts Interstate-Transportation Workers And Others Like Them From Arbitration.

        On June 6, 2022, in an 8-0 opinion authored by Justice Clarence Thomas, SCOTUS held that Latrice Saxon, a ramp supervisor for Southwest Airlines, was exempted by the Federal Arbitration Act from having to arbitrate. Southwest Airlines v. Saxon, No. 21-309 (S. Ct. 6/6/22). A catchall-phrase in the FAA, exempting from arbitration "any other class of workers engaged in foreign or interstate commerce” covered Saxon. 

        COMMENT: Saxon brought a putative class action for wage and hour violations. How helpful the ruling will be for class actions involving workers engaged in foreign or interstate commerce is uncertain, because SCOTUS did not accept Saxon's argument that the exemption applied broadly to all airline workers. At the same time, SCOTUS did not accept Southwest Airlines' argument that the exemption applied  narrowly to workers who actually transported goods across state lines. In future cases, the courts will have to look closely at the specific facts to determine the scope of the exemption. 

Arbitration, FAA, Transportation: 9th Circuit Agrees Domino's Drivers Transporting Pizza Ingredients To Franchisees Intrastate Are Engaged In Interstate Commerce

Engaged In Interstate Commerce, Domino's Drivers Delivering Pizza Ingredients Intrastate Are Exempt From Requirements of Federal Arbitration Act. 9 U.S.C § 1.

 

 

How Domino's Makes Its Pizza ↑

Downtown LA Pizza. Carol Highsmith, photographer. 2012. Library of Congress. ↑

Jon Stewart Deep Dish Pizza Rant. ↓

 

                                                                                 

        In an opinion penned by Judge Hurwitz, the 9th Circuit affirmed a  district court  decision denying Domino 's motion to compel arbitration in a labor law lawsuit brought by drivers who delivered pizza ingredients from a central distribution center to Domino's franchisees. Carmona v. Domino's Pizza, No. 21-55009 (9th Cir.  12/23/21) (Hurwitz, McLane, Parker).     

        The Federal Arbitration Act exempts transportation workers engaged in interstate commerce from the requirements of the FAA. The drivers working for  Domino's work in-state, but when they deliver pizza ingredients to Domino's franchisees, they are acting as  workers engaged in a “single, unbroken stream of interstate commerce” that renders interstate commerce a “central part” of their job description. Judge Hurwitz relied on a similar 9th Circuit case involving Amazon delivery drivers, Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020). See our earlier 8/31/20 post on Rittmann. 

        Judge Hurwitz writes that there are distinctions between the Amazon and Domino's Pizza cases: "The customers to whom the Amazon drivers delivered the interstate goods in Rittmann initiated the purchases online with Amazon . . .  while the Domino’s franchisees order the goods from the Supply Center in California only after Domino’s has already purchased them. But this is a distinction without a difference." In the end, the drivers are still participating in a single, unbroken stream of interstate commerce.