Tuesday saw justices of the U.S. Supreme Court presenting doubts about the argument raised by Wonder Bread maker Flowers Foods subsidiary. The subsidiary claimed that a federal law providing exemptions from mandatory legal dispute arbitration to only workers of transportation companies involved in interstate commerce was applicable. The case was brought forth by Neal Bissonnette, an ex-delivery driver for LePage Bakeries Park Street, a Flowers unit, who appealed against a 2nd U.S. Circuit Court of Appeals verdict.
Revisiting Misclassified Drivers Case
Bissonnette is attempting to resuscitate a suggested class action where LePage is accused of wrongly categorizing drivers who delivered baked goods to retailers as independent contractors instead of employees. This allegation was made despite his agreement to resolve needful legal disputes in arbitration.
Potential Impacts on Various Industries
If the court rules in favor of Bissonnette, it could make a range of industries, such as retail, food distribution, and manufacturing, susceptible to a surge in lawsuits brought by transportation and delivery workers. It has become a common practice with several companies to mandate the signing of arbitration agreements by their workers, arguing that individual arbitration is more effective and efficient than court dispute resolutions.
Dissecting the Federal Arbitration Act (FAA)
Under the FAA enacted in 1925, arbitration agreements must be enforced according to the stipulated terms, but with a provision that exempts some workers' employment contracts from the act. The exempted workers include "seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce."
The 2001 ruling by the Supreme Court appropriately applied the exemption to only transportation workers. However, courts of appeal have since been divided on interpreting this ruling- does this mean every worker who transports goods or only those employed by companies that provide transportation services?
The Exemption Debate
Tuesday's arguments, lasting an hour, pivoted more on whether Congress singled out seamen and railroad workers in the FAA because they were transportation industry workers or based on the nature of their duties. Jennifer Bennett, who represented Bissonnette, argued that Congress's decision to list specific worker groups as opposed to cargo companies and railroads indicates the potential applicability of the exemption across any industry.
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Drawing the Thin Line
Several justices, including the court's conservative members, doubted LePage's arguments. Justice Samuel Alito opined that centering on what an employer does instead of a worker's job duties could precipitate confusion. He added that the ambiguity would make it difficult to establish whether a company like Amazon.com falls under the transportation industry.
In another twist to the argument, the Supreme Court is mulling over whether to look into whether Amazon's local delivery drivers are protected under the FAA exemption. This follows the Supreme Court's recent rejection of two related cases involving the online retail giant.
Keeping Job Duties as Key Indicator
The court's unanimous ruling in the 2022 case, Saxon v. Southwest Airlines, reaffirmed that the FAA exemption applied to baggage handler supervisors, emphasizing that workers' job duties were significant in the determination. "We have looked at the workers' performance in Saxon, and wouldn't it complicate matters now to look at the entire industry? I thought we foreclosed that in Saxon," Justice Clarence Thomas pointed out.
In response, Lovitt stated that LePage is not planning to replace the test described in Saxon. Instead, the intent would be to supplement it with a preliminary inquiry into whether a transportation company employs a worker. The Supreme Court's final ruling is greatly anticipated, considering its far-reaching implications on the FAA exemptions and the future landscape of transportation and delivery worker litigation.
