Bissonnette v. LePage Bakeries Park St., LLC
601 U.S. 246 (2024)
Rule of Law:
The exemption for 'contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce' under Section 1 of the Federal Arbitration Act (FAA) applies to transportation workers regardless of whether their employer operates in the transportation industry.
Facts:
- Flowers Foods, Inc. is a major producer and marketer of baked goods that are distributed nationwide.
- Neal Bissonnette and Tyler Wojnarowski owned the rights to distribute Flowers products in certain parts of Connecticut.
- Bissonnette and Wojnarowski picked up baked goods from a Flowers warehouse in Waterbury and delivered them to local shops.
- Bissonnette and Wojnarowski's jobs also included finding new retail outlets, advertising, setting up promotional displays, and maintaining customer inventories.
- To purchase their distribution rights, Bissonnette and Wojnarowski entered into contracts with Flowers that contained agreements to arbitrate any disputes under the FAA.
- Bissonnette and Wojnarowski sued Flowers, alleging violations of state and federal wage laws due to unlawful deductions, unpaid overtime, and unjust enrichment.
Procedural Posture:
- Neal Bissonnette and Tyler Wojnarowski (petitioners) brought a putative class action against Flowers Foods, Inc. and its subsidiaries (respondents) in District Court.
- Flowers moved to dismiss the case or to compel arbitration under the FAA.
- The District Court dismissed the case in favor of arbitration, concluding that petitioners were not 'transportation workers' exempt under Section 1.
- The Second Circuit Court of Appeals affirmed, holding that the Section 1 exemption was available only to workers in the transportation industry, and petitioners were in the bakery industry.
- The Second Circuit granted panel rehearing in light of Southwest Airlines Co. v. Saxon but adhered to its prior decision, refining its test for what constitutes a 'transportation industry.'
- The Second Circuit denied rehearing en banc.
- The Supreme Court granted certiorari to resolve a conflict with decisions from the First Circuit.
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Issue:
Is a transportation worker required to work in the transportation industry to qualify for the Federal Arbitration Act's Section 1 exemption from mandatory arbitration?
Opinions:
Majority - Chief Justice Roberts
No, a transportation worker is not required to work in the transportation industry to qualify for the Federal Arbitration Act's Section 1 exemption. The Court reaffirmed its precedent in Circuit City Stores, Inc. v. Adams (2001) and Southwest Airlines Co. v. Saxon (2022), which established that the Section 1 exemption is limited to 'transportation workers' based on the canon of ejusdem generis, linking the general phrase 'class of workers engaged in...commerce' to the specific categories of 'seamen' and 'railroad employees.' Crucially, Saxon explicitly rejected an 'industry-wide' approach, emphasizing that the language of Section 1 focuses on 'the performance of work' by the individual, rather than the industry of the employer. The Second Circuit's 'transportation-industry' test, which hinged on whether an entity 'pegs its charges chiefly to the movement of goods or passengers' and derives its 'predominant source of commercial revenue' from such movement, was deemed to introduce 'arcane riddles' and 'complexity and uncertainty.' This approach would necessitate extensive discovery and 'mini-trials' merely to determine arbitrability, breeding litigation from a statute designed to avoid it. The Court further rejected Flowers' argument that without an industry requirement, the exemption would be too broad, reiterating that a transportation worker must 'actively' play a 'direct and necessary role in the free flow of goods across borders,' thus naturally limiting the provision's scope without an added industry test. Congress's explicit inclusion of industry-specific language in other statutes, but not in FAA Section 1, further supports interpreting the exemption based on the worker's function.
Analysis:
This decision significantly clarifies the scope of the FAA's Section 1 exemption, solidifying the 'performance of work' standard over an 'industry-based' analysis. It removes a potential barrier for workers in the gig economy or those employed by companies whose primary business is not transportation but who nonetheless perform critical interstate transportation duties. Future cases will likely focus more intently on the specifics of a worker's role in the flow of goods across state lines, rather than the employer's business model, potentially leading to more successful challenges to arbitration agreements by a wider range of workers.
