The Federal Arbitration Act (the “FAA”) makes arbitration agreements in most commercial contracts enforceable,[1] however it exempts from its coverage arbitration agreements in employment contracts for “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”[2] In Bisonette v. LePage Bakeries Park St., decided on April 12, 2024, the Court unanimously ruled that the exemption provision of the FAA generally applied to employment contracts for “transportation workers,” regardless of the non-transportation nature of their employers’ businesses.
Comment: The plaintiffs in this case sued the baking company for which they worked as “distributors,” claiming to be entitled to the rights of employees for the company. Whether they were employees or independent contractors did not affect their character as “transportation workers” like “seamen” or many “railroad employees.” The defendant wanted to submit the employment issues between the parties to arbitration pursuant to their “distributorship” agreements, which contained mandatory arbitration clauses. The plaintiffs, claiming to be employees, wanted a jury to decide those issues. The Court correctly decided that the issue over arbitration did not depend on the nature of the alleged employer’s business but depended instead on the nature of the alleged employees’ actual work. To that limited extent, the Court’s unanimous decision was correct and necessary. The lower courts may still have to decide if these particular “transportation workers” were really “engaged in” “interstate commerce,” since their business trips never took them across state lines.
Dan Rhea
[1] 9 U.S.C. § 2.
[2] 9 U.S.C. § 1.
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