CASE NOTE: SOUTHWEST AIRLINES CO. V. SAXON.

• Author: Weaver, Lydia

1. Introduction 147 II. Part Two: Facts and Holding 147 III. Part Three: Background 149 IV. Part Four: The Court's Decision 150 V. Part Five: Analysis 152 VI. Part Six: Conclusion 153 I. INTRODUCTION

   In the United States, overtime wages are defined and enforced by the Fair Labor Standards Act (FLSA). However, the Federal Arbitration Act (FAA) can make it extremely difficult, or even impossible, for an employee to file an actionable claim against his or her employer if the employee has worked overtime hours without proper compensation. After an employee has signed an employment contract that includes an arbitration agreement, an employer can force the employee to settle all wage disputes privately without litigation. While there are some exceptions to the FAA, the language of the provision is complex and dated. The defendant in Southwest Airlines Co. v. Saxon challenged the interpretation of the provision exempting select employees from the confines of the FAA and sought the opportunity to try her class action lawsuit for lost overtime wages in court.

   Part Two of this note evaluates the facts and holding of Southwest Airlines Co. v. Saxon. Part Three evaluates the statutes at issue and methods the lower courts used to reach their holdings prior to the Supreme Court's opinion. Subsequently, Part Four reviews the United States Supreme Court decision in the Saxon case. Part Five analyzes the Saxon Court's opinion and discusses how the court could have strengthened its presentation of the facts. Finally, Part Six concludes with final remarks regarding the outcome of this case.

2. PART TWO: FACTS AND HOLDING

   The court in Southwest Airlines Co. v. Saxon (1) considered whether a ramp supervisor for Southwest Airlines was entitled to compensation for improper overtime wages under the Fair Labor Standards Act of 1938, 52 Stat. 1060 (FLSA) (2), because she belonged to a "class of workers engaged in foreign or interstate commerce" that is exempted from the Federal Arbitration Act (FAA). (3) Ms. Saxon, the defendant, was an employee of the plaintiff, Southwest Airlines, a company that transported more than 256 million pounds of passenger, commercial, and mail cargo to domestic and international destinations in 2019. (4) The defendant worked as a ramp supervisor at Chicago Midway International Airport, where she not only trained and supervised teams of ramp agents who physically load and unload cargo on and off airplanes but frequently handled cargo herself, alongside the ramp agents. (5)

   The Saxon case arose after the defendant realized she and other ramp supervisors were being under-compensated for overtime wages. (6) Despite her agreement to arbitrate wage disputes individually in her employment contract, the defendant filed a putative class action lawsuit against Southwest under the FLSA. (7) In response, Southwest tried to enforce its arbitration agreement under the FAA and dismiss the lawsuit. (8) In response to the motion to dismiss, the defendant raised [section] 1 of the FAA, which provides that the Act is inapplicable to "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." (9) The defendant claimed that ramp supervisors fell into this class of workers engaged in interstate or foreign commerce. (10) Primarily, the parties disagreed on the definition and application of the exemptions outlined in 9 U.S.C.A [section] 1 including the validity and enforceability of the defendant's putative class action lawsuit. (11)

   At trial, the District Court ruled in favor of Southwest, holding that only employees involved in the "actual transportation" of goods fell within the FAA's exemption. (12) Next, the Seventh Circuit Court of Appeals reversed the district court's decision based on the definition of "commerce" as it was understood when the FAA was enacted in 1925. (13) The Seventh Circuit held that loading cargo onto a vehicle to be transported between states fell within the original definition of commerce but questioned whether the supervision of cargo loading alone would also be exempted based on the same provision. (14) However, the Seventh Circuit's decision conflicted with an earlier decision from the Fifth Circuit, so the United States Supreme Court sought to resolve the disagreement. (15)

   The Supreme Court focused on two major issues in the Saxon case: (1) whether the defendant, as a ramp supervisor, fell into a "class of workers" as designated by [section] 1 of the FAA, and (2) whose duties are consistent with those exempted from the FAA's coverage. (16) The Court...