Bissonnette v. LePage Bakeries (Federal Arbitration Act)

Flowers makes baked goods that are then distributed across the country.  Bissonnette owned the distribution rights in a certain part of the country.  Their contract subjected them to the F.A.A..  After Bissonnette sued under Labor (wage) laws, Flowers moved to compel arbitration.  Bissonnette said they're exempt because the F.A.A. exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  The District Court dismissed the case, sending it to Arbitration.  The Second City affirmed, finding that the exemption only applied to workers in the transportation industry, but these were workers in the bakery industry. 

Held: A transportation worker need not work in the transportation industry to be exempt from coverage under §1 of the FAA.

(a) The Court has long recognized that the exemption in §1 is limited to transportation workers. See Circuit City Stores, Inc. v. Adams. Applying the ejusdem generis canon of statutory interpretation to §1, the Court in Circuit City read the general phrase “class of workers engaged in . . . commerce” to be “controlled and defined by reference to” the specific categories “seamen” and “railroad employees” that precede it. The Court concluded that the “linkage” between “seamen” and “railroad employees” is that they are both transportation workers, and the Court thus interpreted the class of workers in the residual clause of §1 to be limited in the same way. The Court again considered the scope of the residual clause in Southwest Airlines Co. v. Saxon and declined to adopt an industrywide approach to §1, rejecting the employee’s claim that she was a member of a “class of workers engaged in foreign or interstate commerce” simply because she worked for an airline and carried out its customary work. Instead, the language of §1—referring to “ ‘workers’ ” who are “engaged” in commerce—focuses on the performance of work rather than the industry of the employer. The relevant question was what the employee does at the airline, not what the airline does generally. Saxon. Here the Second Circuit fashioned its transportation-industry requirement without any guide in the text of §1 or this Court’s precedents. The Second Circuit decided that an entity would be considered within the transportation industry if it “pegs its charges chiefly to the movement of goods or passengers” and its “predominant source of commercial revenue is generated by that movement.” But that test would often turn on arcane riddles about the nature of a company’s services. For example, does a pizza delivery company derive its revenue mainly from pizza or delivery? Extensive discovery might be necessary before deciding a motion to compel arbitration, adding expense and delay to every FAA case. That “complexity and uncertainty” would “‘breed[] litigation from a statute that seeks to avoid it.’ ” 

(b) Flowers argues that the §1 exemption would sweep too broadly without an implied transportation-industry requirement. Because “virtually all products move in interstate commerce,” Flowers warns that nearly all workers who load or unload goods would be exempt from arbitration. But §1 does not define the class of exempt workers in such limitless terms. Instead, as the Court held in Saxon, a transportation worker is one who is “actively” “ ‘engaged in transportation’ of . . . goods across borders via the channels of foreign or interstate commerce.” In other words, a transportation worker “must at least play a direct and ‘necessary role in the free flow of goods’ across borders.” 596 U. S., at 458. These requirements “undermine[] any attempt to give the provision a sweeping, open-ended construction,” instead limiting §1 to its appropriately “narrow” scope. Id., vacated and remanded.