FAA Does not Apply to Transportation Workers


All Employers with Interstate Transportation Workers


April 12, 2024


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Quick Look

  • Interstate transportation workers don’t have to be specifically working in the transportation industry for the FAA transportation exemption to apply.
  • Arbitration agreements may not be enforced against transportation workers under the FAA, but state laws may apply.


In Bissonnette v. LePage Bakeries Park St., LLC, the U.S. Supreme Court clarified that those working in interstate transportation qualify as exempt from the provisions of the Federal Arbitration Act (FAA). Specifically, the FAA generally enforces arbitration agreements where the parties to the agreement specify that disputes will be resolved through arbitration rather than litigation. However, the FAA exempts these protections for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

Here, the lower courts said that because the workers at issue were in the “bakery industry,” working for employers who produced, marketed, and delivered packaged bakery foods, they were not covered by the transportation exemption of the FAA. Even so, the workers had multiple duties, none of which required them to transport goods across state lines. The question then was whether the FAA transportation exemption applies only to those working in the transportation industry or more broadly to any employee providing interstate transportation work regardless of the business’s industry.

The Supreme Court answered by stating that interstate transportation workers don’t have to be specifically working in the transportation industry for the exemption to apply. “Instead, the language of [the statute] focuses on the performance of work rather than the industry of the employer.” Further, 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.’” That being said, the Court did not apply this standard to the facts of this case, so it remains unclear whether the workers here are considered transportation workers.

The effect of this decision is that employees engaging in interstate transportation work may escape enforcement of their arbitration agreements under the terms of the FAA. It also means that state arbitration rules may instead apply to their agreements, having other implications, such as whether or not the worker can waive class action claims in arbitration or litigation. Moreover, the broad description of a transportation worker will likely lead to more litigation to clarify the term.


Action Items

  1. Have arbitration agreements reviewed by legal counsel for updates.
  2. Revise job descriptions consistent with this ruling.


Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase