Carrie Hoffman Quoted on Federal Arbitration Act's Transportation Exemption

Foley & Lardner LLP partner Carrie Hoffman commented on recent judicial interpretation of the Federal Arbitration Act (FAA) in the Law360 article, “Arbitration Act’s Transportation Exemption At Inflection Point.”

Hoffman, chair of Foley’s Labor & Employment Practice, said that based on analysis of the 2022 U.S. Supreme Court case Southwest Airlines v. Saxon, local delivery drivers who operate intrastate would be exempt under Section 1 of the FAA.

“[The employee is] touching a good, if you will, that moved across state lines and getting it to its final place, and therefore affects interstate commerce and would be exempt,” she explained.

Hoffman noted that she could see a court saying that 5% of a workers’ duties involving interstate commerce would be enough to trigger the exemption, if those duties are regular and recurring.

“That’s where the gray area is going to keep getting pushed, if you will, from employers who obviously want their employees to be subject to arbitration agreements,” she added.

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