Circuit Splits Cloud Transportation Worker Arbitration Carveout

The US Supreme Court’s recent decision not to opine on whether local delivery drivers are transportation workers exempt from mandatory arbitration agreements in employment disputes is forcing lower federal courts to grapple with the scope of the carveout.

The Federal Arbitration Act, which generally favors arbitration over litigation, contains an exemption for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

The justices in June decided Southwest Airlines Co. v. Saxon, which held that the exemption covers airplane cargo loaders, allowing them to pursue wage-and-hour lawsuits in court. But ...