The Implications of Bissonnette v. Flowers Foods, Inc.: Redefining the Scope of the FAA Exemption

Arbitration often serves as a primary mechanism for resolving disputes efficiently and privately in the legal landscape. The Federal Arbitration Act (FAA), which mandates the enforcement of arbitration agreements, includes a critical exemption under §1 regarding "employment agreements for sailors, railway staff, or any other category of laborers involved in international or interstate trade." The recent judgment by the Supreme Court in Bissonnette v. Flowers Foods, Inc. clarifies the extent of this exemption, which profoundly affects employees and employers in multiple sectors.

Background of the Case

Flowers Foods, Inc., a prominent producer and marketer of baked goods, operates a direct-store delivery system through franchisees. Two such franchisees in Connecticut, Neal Bissonnette and Tyler Wojnarowski, entered into contracts with Flowers to distribute its products. These contracts included arbitration agreements under the FAA.

After suing Flowers for violating state and federal wage laws, Flowers moved to compel arbitration. Bissonnette and Wojnarowski contended that they were exempt from arbitration under §1 the FAA because they were transportation workers. The District Court dismissed their case in favor of arbitration, asserting that the petitioners were not transportation workers. The Second Circuit affirmed this decision, concluding that the exemption applied only to workers in the transportation industry, not the bakery industry.

Supreme Court’s Decision

The Supreme Court, led by Chief Justice Roberts, reversed the Second Circuit's decision. The Court held that a transportation worker need not be employed in the transportation industry to be exempt under §1 of the FAA. This ruling is grounded in the interpretation of the term "transportation worker," focusing on the nature of the work performed rather than the industry in which the employer operates.

The Court relied on precedents such as Circuit City Stores, Inc. v. Adams and Southwest Airlines Co. v. Saxon to underline that the exemption applies to workers transporting goods or passengers across state or national borders. The focus is on the worker’s role in commerce, not the employer's primary business.

Key Points from the Ruling

• Ejusdem Generis Interpretation: The Court applied the ejusdem generis canon, interpreting the general phrase "class of workers engaged in commerce" by reference to the specific categories "seamen" and "railroad employees." This means the exemption includes transportation workers regardless of their employer's industry.
• Focus on Employer Contributions: The Court emphasized that the critical issue is the work performed by the worker. Not the employer who determines this view is consistent with the Court's decision in the Saxon case. Where attention turns to the officials' actions, it is not an airline operation.
• Industry-Centric Assessment Review: This is the second round of assessment, which requires an evaluation of provincial transport companies' primary income. This is considered impossible. This type of evaluation can result in a complex and expensive legal battle contrary to the FAA's goal of promoting effective prosecution.

Implications

The Supreme Court's decision broadens the scope of the FAA exemption to include any worker actively engaged in the transportation of goods across state or national borders, irrespective of their employer's industry.

• Business: Companies may need to reevaluate their arbitration agreements and classify their employees, especially those transporting goods.
• Workers: Employees who play a direct role in interstate commerce can be exempt from forced arbitration. It allows them to take legal action in court.

In conclusion, the Bissonnette v. Flowers Foods, Inc. decision underscores the importance of workers' roles in commerce over their employers' business nature. This ruling ensures that the FAA’s arbitration requirements are applied consistently, maintaining the balance intended by Congress when the Act was enacted.

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