April 13, 2024 - OAKLAND — California Attorney General Rob Bonta on Friday issued the following statement on a unanimous decision by the U.S. Supreme Court  in Bissonnette v. LePage Bakeries Park St., LLC, et al., reversing the Court of Appeals for the Second Circuit and holding that transportation workers do not need to work in the transportation industry to be exempt from the Federal Arbitration Act’s (FAA) arbitration requirements. The case presented the question of whether the FAA’s arbitration exemption for “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” covers only workers employed in the “transportation industry,” or instead, more broadly covers transportation workers, such as truck drivers who deliver products for employers in a variety of industries. In November, Attorney General Bonta joined a multistate coalition led by Illinois, supporting the petitioners in Bissonnette — truck drivers who deliver baked goods to restaurants and stores for baking conglomerate Flowers Foods, Inc.— and asking the Supreme Court to reverse the lower court’s ruling. Today’s decision by the Supreme Court reversed the lower court opinion and held that transportation workers do not need to be employed in the transportation industry to be exempt from the FAA’s arbitration mandates.  

“The Supreme Court got this one right, recognizing today that transportation workers are not required to arbitrate their employment-related grievances," said Attorney General Bonta. “California is home to more than 1.5 million transportation workers, and today’s decision ensures that they will not be forced into arbitration agreements that are detrimental to their interests. My office will continue to fight for the rights and dignity of all workers.”

The FAA was passed in 1925 as a response to judicial hostility towards arbitration agreements. However, while Section 2 of the FAA widely compels enforcement of arbitration agreements, until recently, arbitration was only applied to a limited range of commercial disputes. It was not until the 1980s that the Supreme Court steadily expanded the scope of the FAA. As a result of this expansion, workers have been increasingly forced to sign arbitration agreements as a condition of finding work, leading to the abandonment of claims and less enforcement of workers’ rights. In California alone, employers annually pocket a staggering $851 million from low-wage workers due to arbitration agreements discouraging the filing of claims.

California is home to over 1.5 million transportation workers. Of these workers, about 312,080 are truck drivers in a variety of industries, and many of these workers are directly related to the movement of goods, even if they do not directly work for a trucking company. For the many California transportation workers, today’s decision clarifying the scope of the exemption under the FAA will safeguard their access to the courts, reducing the risk that they will be erroneously diverted to arbitration and abandon their claims.

In November, Attorney General Bonta joined the attorneys general of Illinois, Colorado, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia in an amicus brief that argued that transportation workers are exempt from the FAA.

The copy of the court decision is here. 
Source: CA. DOJ