Second Circuit Again Considers If Bakery Goods Drivers Are Excluded Under The FAA Because They Are "Transportation Workers". The Saga Continues . . .

• Published date: 07 October 2022
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Contract of Employment, Employee Benefits & Compensation, Arbitration & Dispute Resolution, Class Actions
• Law Firm: BakerHostetler
• Author: Mr John Lewis

While the Supreme Court's opinion in Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022), brought needed clarity to the analysis of the class of workers excluded as "transportation workers" by the residual clause of the Federal Arbitration Act (FAA), many questions remain. We blogged about the Saxon decision on June 8, 2022.

The plaintiffs-appellants in Bissonnette v. LePage Bakeries Park St. LLC., No. 20-1681 (Amended Sept. 26, 2022), who deliver baked goods to stores and restaurants in Connecticut, brought a putative class action against the company and its subsidiaries that manufacture the goods they deliver. The plaintiffs claimed entitlement to unpaid or withheld wages, overtime wages and unjust enrichment under the Fair Labor Standards Act (FLSA) and Connecticut wage laws. The district court initially granted the defendants' motion to compel arbitration and dismissed the case. In an initial appeal, the Second Circuit panel concluded plaintiffs were not "transportation workers". See 33 F.4th 650 (2d Cir. 2022). But after Saxon was issued, the panel withdrew the opinion, on May 5, 2022. Yet, after further analysis, the panel majority again concluded that the plaintiffs were not "transportation workers," regardless of the fact that they drove trucks, because of the industry they were in - the bakery industry, not transportation.

The Legal Issues

The FAA, which provides the federal courts with the authority to enforce arbitration agreements, has an exclusion for contracts with "seamen, railroad employees, [and] any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. ' 1. This exclusion has been held to apply to "transportation workers". See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001). And an independent contractor can be a transportation worker, as recognized in New Prime Inc. v. Oliveira, 139 S. Ct. 532, 543-44 (2019).

The plaintiffs worked in accordance with a distributor agreement to pick up baked goods from warehouses and deliver them to stores and restaurants in their territories. The plaintiffs generally earned the difference between the price for which they secured the bakery goods and that paid by the stores and restaurants that bought them. Plaintiffs could seek to enhance their profits by increasing sales and also could sell noncompetitive items. The applicable distributor agreement contains a binding arbitration provision providing it is "governed by the FAA and Connecticut law to the extent...