By

Hannah Chapple

Section 1 of the Federal Arbitration Act (FAA) exempts “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from the statute’s coverage.¹ In the case of Bissonnette v. Le-Page Bakeries, which, at the time of writing, the United States Supreme Court had just granted cert,² the Court is poised to squarely address if commercial truck drivers are “transportation workers.” In so answer, the Court will shed light on the entire Section 1 exception.

Neal Bissonnette, the name plaintiff, drives trucks for Le-Page Bakeries, the defendant, delivering goods through channels of interstate commerce. Despite this, the Second Circuit Court of Appeals held that these workers were not exempt under Section 1 of the FAA,³ as the Second Circuit found to be covered under such exemption requires that the worker be a “transportation worker” in a “transportation industry.”⁴ The Second Circuit considered the plaintiff part of the “baking industry” since the defendant hired the plaintiff directly, rather than by a trucking company.⁵

If the Supreme Court were to rule in favor of Le-Page Bakeries, there would be significant implications to the scope of the Section 1 exception, as well as in how employers would be able to categorize their employees to evade this exception.

In 2022, the Supreme Court in Southwest Airlines Co. v. Saxon,⁶ confronted the argument that when determining whether an employee falls within the scope of the FAA exemption, the courts analysis should focus on the industry involved, not simply on the work being performed by the employee. In Saxon, the plaintiff was a cargo loader for Southwest Airlines, and although she did not personally transport the cargo over state lines, the Court found that their focus should be on whether the workers play “a direct and ‘necessary role in the free flow of goods’ across borders.”⁷ The Court held that the nature of an employee’s work determines whether they are exempt from arbitration agreements in the employment contract.⁸ The Court expressly declined to limit the FAA’s exemption to workers who personally cross state lines because that is not rooted in the FAA’s express language.⁹ If the Court were to follow this route and say that the truck drivers of Bissonnette are not “transportation workers in a transportation industry,” it would weaken Saxon and open holes for abuse among other employer-employee/independent contractor/franchisee relationships.

Many workers who primarily transport goods across interstate commerce are not in the “transportation industry.” They instead operate under the umbrella of a different industry entirely, despite the nature of their work being exactly what the FAA sought to protect – that which dealt with interstate commerce. Bissonnette’s dissent notes this, stating, “the plaintiffs drive trucks; they are not bakers. And while they happen to be employed by the bakery whose bread they deliver, this is nothing new.”¹⁰

Additionally, the Supreme Court has revisited the FAA’s worker exception in New Prime, Inc. v. Oliveira, and held that Section 1’s exception applies to both an employer’s direct employees and independent contractors.¹¹ Le-Page hired Bissonnette as a compelled “franchised business,” rather than under their own employer-employee umbrella. In compelling their drivers to franchise, Le-Page Bakeries may evade the ruling of New Prime, which failed to differentiate between employees and independent contractors when determining whether a worker was exempted pursuant to FAA § 1.¹² Instead, Le-Page Bakeries has obligated its workers to become “Independent Distributors” by forming contracts with these employees as a condition for work. Under this theory, future arbitration between Le-Page and similarly situated plaintiffs would be framed as business-to-business commercial arbitration beyond the scope of FAA § 1.

If incorporated workers are found to be exempt from the protection granted to them in Section 1 of the FAA, then corporations could easily undermine the FAA’s protection by simply mandating incorporation as a precondition of work. This ruling would allow companies to enforce arbitration against transportation workers—including seamen and railroad workers—in clear circumvention of the statue’s plain meaning. This interpretation would clearly eat away at the FAA’s exception, diminish the meaning and power of the statute as a whole, and perpetuate an abusive relationship between these workers and their employers who are unable to adequately advocate for themselves as a business, as they are not truly operating as such.