Workers have spent years arguing that the Federal Arbitration Act’s transportation worker exemption means their wage-based claims against companies such as Amazon.com Inc., Domino’s Pizza, and Uber Technologies Inc. should be heard in court, not behind closed doors.
A federal appellate court added a new obstacle in 2022 when it ruled that both the worker’s company and their type of work are relevant to the exemption. The US Supreme Court was slated to hear arguments on Tuesday about whether this exemption applies only to workers for companies specifically in the transportation industry. This debate is being brought forth by Flowers Foods Inc. and its bakery drivers. Regardless of the court’s ruling, legal experts anticipate increased litigation over this matter.
Legal scholar Barry Winograd believes that focusing on whether an employer is considered part of the transportation industry will result in years of litigation and distract from the workers’ original claims.
The current case gives the justices an opportunity to resolve the conflict between different circuits’ rulings on this exemption specific to workers involved in foreign or interstate commerce. The disagreement arises from separate wage and hour disputes involving Flowers Foods.
The interpretation of the FAA’s transportation worker exemption is still contentious, with Imre Szalai, a law professor at Loyola University New Orleans, highlighting arbitration’s role as a time-efficient dispute resolution which assists an already overstretched judiciary.
Arbitration’s popularity has skyrocketed with the growth of the gig economy and the resulting increase in employment classification and benefit-entitlement disputes. However, while employers favour arbitration for its behind-closed-doors nature, employees are often critical of its restrictive appeals process. Some lower court judges have similarly criticized the efficiency of mandatory arbitration, particularly in drawn-out cases like one that lasted for two and a half years before finally being sent to arbitration.
Many legal commentators have speculated on the potential impact of these proceedings. Angelo I. Amador, Director of the Restaurant Law Centre, notes that the exemption could also affect workers at smaller businesses, While Miriam Becker-Cohen, appellate counsel at the Constitutional Accountability Center, warns that adding a transportation-industry requirement could prompt lengthier court battles.
The case at hand, Bissonnette v. LePage Bakeries Park St. LLC, centers on bakers who allege they have been misclassified as independent contractors rather than employees entitled to full wage protections. The case has highlighted the divide in the courts, with the Second Circuit stating that the workers don’t qualify for the FAA exemption as Flowers Foods is in the “bakery industry, not a transportation industry”
If the Supreme Court opts for the Second Circuit’s approach, it could lead to cases where “people who plainly do transportation work like the truck drivers here, oddly enough, will not count as transportation workers” for exemption purposes, according to Becker-Cohen.
Big corporations such as Amazon and Walmart, which have large interstate transportation components, have shown interest in the case due to implications for their own workers and have filed amicus briefs in support of Flowers Foods.
Industry groups like the US Chamber of Commerce, the National Retail Federation, and the American Bakers Association are urging the high court to side with Flowers Foods. They are also focusing on the belief that rejecting an industry requirement, not adding it, would significantly increase litigation over when the FAA applies.