Employment Arbitration: Recent Developments and Future Prospects

Abstract

This Article is the first to examine the impact of the Supreme Court’s latest Federal Arbitration ‎Act (FAA) decisions on the debate surrounding so-called “forced” employment arbitration. In ‎Southwest Airlines Co. v. Saxon, the Supreme Court held that airport cargo loaders were exempt ‎from arbitration under § 1 of the FAA, which excludes certain workers “engaged in interstate ‎commerce” from the scope of the Act. In Viking River Cruises, Inc. v. Moriana, the Court held ‎that the FAA did not preempt a judge-made rule prohibiting waivers of representative claims ‎brought by employees under California’s Labor Code Private Attorneys General Act. ‎

The Article argues that in both Southwest Airlines and Viking River the Supreme Court ‎placed—for the first time—subtle limits on the use of arbitration in the employment context. ‎These decisions may therefore alleviate some of the concerns surrounding employment arbitration ‎and may signal an emerging trend in the Supreme Court of restricting the FAA’s impact on ‎employment disputes. Notwithstanding these piecemeal developments in the Court’s ‎employment arbitration jurisprudence, the Article also shows that thus far neither Southwest ‎Airlines nor Viking River has put a serious dent in the FAA’s “pro-arbitration” policy as applied ‎by the lower courts in the employment context. Southwest Airlines has not resulted in any ‎substantial shift in lower courts’ approach to the scope of § 1’s exemption. Viking River, in turn, ‎has produced mostly jurisprudential disarray and only time will tell what its ultimate impact will ‎be on the enforcement of employment arbitration agreements waiving representative actions.‎

Keywords: Supreme Court, Federal Arbitration Act, Employment, Arbitration, Private Attorneys General Act, California, Transportation Worker

JEL Classification: K12, K39, K41