Saxon v. Sw. Airlines Co., No. 19-3226

• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)
• Writing for the Court: St. Eve, Circuit Judge.
• Citation: 993 F.3d 492
• Parties: Latrice SAXON, Plaintiff-Appellant, v. SOUTHWEST AIRLINES CO., Defendant-Appellee.
• Docket Number: No. 19-3226
• Decision Date: 31 March 2021

993 F.3d 492

Latrice SAXON, Plaintiff-Appellant,
v.
SOUTHWEST AIRLINES CO., Defendant-Appellee.

No. 19-3226

United States Court of Appeals, Seventh Circuit.

Argued March 3, 2021
Decided March 31, 2021

Jennifer Bennett, Attorney, Gupta Wessler, San Francisco, CA, Andrew C. Ficzko, Ryan F. Stephan, Attorneys, Stephan Zouras, LLP, Chicago, IL, for Plaintiff-Appellant.

Melissa A. Siebert, Jonathon Studer, Matthew C. Wolfe, Attorneys, Shook, Hardy & Bacon LLP, Chicago, IL, for Defendant-Appellee.

Before Manion, Wood, and St. Eve, Circuit Judges.

St. Eve, Circuit Judge.

The Federal Arbitration Act has, since 1925, established a federal policy favoring arbitration. But every policy has its limits. One of the limits Congress placed on the Arbitration Act is an exemption for "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1. The Supreme Court and the ejusdem generis canon of statutory construction tell us that the last category refers not to all contracts of employment, but only those belonging to "transportation workers." Beyond the two examples the statute provides—seamen and railroad employees—deciding who qualifies as a transportation worker is not always an easy task.

Latrice Saxon is a ramp supervisor who manages and assists workers loading and unloading airplane cargo for Southwest Airlines Company. After she brought a lawsuit against her employer, Southwest invoked the Arbitration Act. Saxon asserted that she was an exempt transportation worker, but the district court found her work too removed from interstate commerce and dismissed the case.

We reverse. The act of loading cargo onto a vehicle to be transported interstate is itself commerce, as that term was understood at the time of the Arbitration Act's enactment in 1925. Airplane cargo loaders, as a class, are engaged in that commerce, in much the way that seamen and railroad employees were, and Saxon and the ramp supervisors are members of that class. It therefore follows that they are transportation workers whose contracts of employment are exempted from the Arbitration Act.

I

As a ramp supervisor at Chicago Midway International Airport, Saxon supervises, trains, and assists a team of ramp agents—Southwest employees who physically load and unload planes with passenger and commercial cargo. Ostensibly her job is meant to be purely supervisory, but Saxon's uncontroverted declaration asserts that she and the other ramp supervisors at Midway frequently fill in as ramp agents when they are short on workers. Though the ramp agents are covered by a collective bargaining agreement, supervisors like Saxon are excluded. She, like other excluded Southwest employees, agreed annually as part of her contract of employment—not separately—to arbitrate wage disputes.

Believing that Southwest failed to pay ramp supervisors for overtime work, Saxon nevertheless filed a putative collective action against Southwest under the Fair Labor Standards Act, 29 U.S.C. §§ 201 – 219. Southwest moved to stay the suit

993 F.3d 495

pending arbitration, see 9 U.S.C. § 3, or to dismiss it for improper venue in light of Saxon's arbitration agreement, Fed. R. Civ. P. 12(b)(3) ; Cont'l Cas. Co. v. Am. Nat. Ins. Co. , 417 F.3d 727, 733 (7th Cir. 2005). Saxon responded that the Arbitration Act did not apply because she was a member of a "class of workers engaged in foreign or interstate commerce," and therefore exempted by § 1 of the Arbitration Act.

In Circuit City Stores v. Adams , 532 U.S. 105, 119, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001), the Supreme Court held that the exemption in § 1 applies only to "transportation workers." Relying on Lenz v. Yellow Transportation, Inc. , 431 F.3d 348, 352 (8th Cir. 2005), Saxon maintained that she was a transportation worker because Southwest was a transportation company, and she was responsible for loading and unloading goods for transportation. Southwest replied that Saxon fell outside the exemption because she did not personally move goods across state lines or manage those who do.

The district court agreed with Southwest. Surveying the limited caselaw, the court determined that the "linchpin" of the transportation-worker definition was "actual transportation, not merely handling goods .... at one end or the other" of a network. In support, it highlighted the exclusion for seamen—a term which it understood not to cover the longshoreman who loaded and unloaded ships—and extended that logic to warehousemen, stevedores, porters, and to Saxon's analogous role as a ramp supervisor. Saxon appealed.

II

We recently considered the framework of the Arbitration Act and the § 1 exemption in Wallace v. Grubhub Holdings, Inc. , 970 F.3d 798 (7th Cir. 2020). Congress passed the Act in 1925 in response to the general "hostility of American courts to the enforcement of arbitration agreements" and "sought to replace that ‘widespread judicial hostility’ with a ‘liberal federal policy favoring arbitration.’ " Id. at 799–800 (citing AT&T Mobility LLC v. Concepcion , 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) ). Section 1 of the Act represents an outer limit on Congress's favor toward arbitration. See New Prime Inc. v. Oliveira , ––– U.S. ––––, 139 S. Ct. 532, 543, 202 L.Ed.2d 536 (2019). It provides that "nothing" in the Act shall apply to "contracts of employment" for "seamen," "railroad employees," and a third, residual category, "any other class of workers engaged in foreign or interstate commerce." 9 U.S.C. § 1 ; Wallace , 970 F.3d at 799.

The parties do not dispute that Saxon's arbitration agreement is a contract of employment but only whether Saxon is one of the workers exempted. Like the plaintiff in Wallace , Saxon does not claim to be a seaman or railroad employee and argues only that she fits in the residual category.

To understand the scope of that category, we explained in Wallace , "our inquiry ‘begins with the text.’ " 970 F.3d at 800 (citing Ross v. Blake , ––– U.S. ––––, 136 S. Ct. 1850, 1856, 195 L.Ed.2d 117 (2016) ). We interpret the words of that text based on their "ordinary ... meaning ... at the time Congress enacted the statute." New Prime , 139 S. Ct. at 539 (quoting Wis. Cent. Ltd v. United States , ––– U.S. ––––, 138 S. Ct. 2067, 2074, 201 L.Ed.2d 490 (2018) ).

The first textual clue is the phrase "class of workers," which obligates us to focus on the broader occupation, not the individual worker. Wallace , 970 F.3d at 800. We therefore ask not whether Saxon is engaged in commerce, but whether a given class of workers is engaged in commerce

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and whether Saxon is a member of that class. Id. at 802.

The second clue is the two enumerated categories of seamen and railroad employees, which provide a gloss on what it means for a class of workers to be "engaged in commerce." Id. at 801. Standing alone, the phrase "engaged in commerce" is a term of art with a narrower scope than similar formulations like "involving commerce" or "affecting commerce," though its precise breadth often depends on "statutory context." Circuit City , 532 U.S. at 115–18, 121 S.Ct. 1302. Under the ejusdem generis canon of construction, general words are interpreted to reflect the "common characteristics" of the enumerated categories that precede them. Ctr. Video Indus. Co. v. Roadway Package Sys., Inc. , 90 F.3d 185, 187–88 (7th Cir. 1996) ; see Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 199 (2012). In Circuit City , the Supreme Court used this canon to reject the argument that § 1 exempted all employment contracts. 532 U.S. at 114–15, 121 S.Ct. 1302. Instead, the court limited the scope of the residual category to "transportation workers," id. at 119, 121 S.Ct. 1302, those who are "akin to ‘seamen’ and ‘railroad employees,’ " Wallace , 970 F.3d at 801. To be engaged in commerce for purposes of § 1, then, is to "perform[ ] work analogous to that of seamen and railroad employees, whose occupations are centered on the transport of goods in interstate and foreign commerce." Id. at 802.

III

Saxon argues on appeal that ramp supervisors, and cargo loaders more broadly, are transportation workers within the original meaning of § 1 at the time it was enacted in 1925. Almost a century ago, she insists, those who loaded cargo for interstate transport were recognized to be engaged in commerce. She also draws parallels between her job loading cargo as a ramp supervisor and the 1925 definitions of seamen and railroad employees, which in her view covered boat and train cargo loaders.

A

Southwest first raises a threshold objection to Saxon's argument: she never made it in the district court. She urged the district court only to follow the Eighth Circuit's Lenz decision, which did not emphasize the text of § 1, its original meaning in 1925, or the scope of the two enumerated categories. Southwest contends that Saxon therefore forfeited or waived her arguments, though Saxon insists she generally raised the relevant issues in the district court.

We need not resolve this dispute. Even if Saxon had waived her arguments by failing to...