Dissecting Bissonnette: Exploring its Implications and Impact on Employment Disputes

Dissecting Bissonnette

Recent Supreme Court decisions have brought both clarity and complexity to arbitration agreements in employment disputes. While periodically emphasizing the equal treatment of arbitration agreements with other contracts, the Court has historically moved away from permitting judicial resolution of disputes towards arbitration. Cases like Saxon clarified the application of the Federal Arbitration Act (FAA) in certain employment disputes, particularly regarding an exemption for transportation workers engaged in interstate commerce.

However, the Supreme Court’s recent Bissonnette decision introduced new nuances in how this exemption applies. In Bissonnette, franchisees and distributors argued for an arbitration exemption based on their distribution activities, challenging interpretations of the FAA’s exemption clause. While the Court clarified that transportation workers need not be directly in the transportation industry in order to fall under§ 1 of the FAA , questions remain about the extent of workers’ involvement in interstate commerce necessary for this exemption’s application. These developments underscore an evolving arbitration landscape and leave practitioners grappling with the future trajectory of arbitration disputes.

As we explore the details of Bissonnette, provided by employment attorney Engram Wilkinson, we aim to unpack its implications and illuminate ongoing discussions surrounding forced arbitration in employment disputes.

Bissonnette and Forced Arbitration: Where do we go from here?

When it comes to arbitration, the Supreme Court recently—and unanimously—made clear: The Federal Arbitration Act’s “policy favoring arbitration” is meant to make arbitration agreements “as enforceable as other contractions, but not more so.” Morgan v. Sundance, Inc., 596 U.S. 411, 418 (2022) (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, 404, n.12 (1967)). Practitioners may welcome the clarification. For years, the Supreme Court seemed headed in the opposite direction.

Notwithstanding its buried remarks that arbitration agreements create general contract disputes, see, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011), the practical effect of the Supreme Court’s arbitration jurisprudence created what some feared was a “super statute.” See, e.g., Priyanka Kasnavia, When Courts Turn Arbitration into Arbitrary: How FAA Precedent Inhibits Federal and State Prohibitions on Employment Discrimination, 58 Hous. L. Rev. 1173 (2021); Epic Sys. Corp. v. Lewis, 584 U.S. 497, 527 (2018) (“The Court today subordinates employee-protective labor legislation to the Arbitration Act.”) (Ginsburg, J., dissenting).

But people—and things—change. If Morgan signaled such change, other recent cases have seemingly effectuated it, resituating the Arbitration Act within employment disputes. See Southwest Airlines Company v. Saxon¸ 596 U.S. 450, 454 (2022). Saxon considered a Southwest Airlines ramp supervisor’s putative collective action under the Fair Labor Standards Act, asking whether Ms. Saxon fell under the Arbitration Act’s “transportation worker” exemption. See id. (“Saxon invoked § 1 of the FAA, which exempts from the statute’s ambit ‘contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.’” (quoting 9 U.S.C. § 1)). The Supreme Court answered—again, unanimously—that “text and context point to the same place: Workers, like Saxon, who load cargo on and off airplanes belong to a class of workers in foreign or interstate commerce.” Id. at 459.

To reach this conclusion, the Supreme Court provided obvious instruction for how courts should deal with arbitration disputes and § 1. See, e.g, Brock v. Flowers Food, Inc., 673 F. Supp. 3d 1180, 1185 (D. Colo. 2023) (“[T]he Court applies Saxon’s clearly established legal framework, asking: (1) to what class of workers did [the plaintiff] belong, and (2) was that class of workers in engaged in foreign or interstate commerce?”) (citing Saxon, 596 U.S. at 455).

To many, Saxon’s instruction closed the door it opened. For some, this proved not to be the case. Enter Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. —-, No. 23-51, 2024 WL 1588708 (U.S. Apr. 12, 2024), the Supreme Court’s latest take on arbitration. In Bissonette, plaintiff-petitioners worked as franchisees and distributors for “Flower Foods, Inc., a multibillion-dollar producer and marketer of baked goods.” Id. at *1.[1] They argued they fell within § 1’s exemption because they “picked up and distributed” Flowers’ bread and buns to “local shops” after Flowers “sent them to a warehouse.” Id. at *2. Flowers saw the world differently, urging an interpretation of § 1 that would require plaintiffs to work in “transportation industries”—not, for instance, the “bakery” industry. See id. at *5. The Second Circuit agreed, only to find its flawed interpretation of § 1 unanimously vacated:

A transportation worker need not work in the transportation industry to fall within the exemption from the FAA provided by § 1 of the Act. The Second Circuit accordingly erred in compelling arbitration on the basis that petitioners work in the bakery industry.

See Bissonnette, 2024 WL 1588708, at *6.

But where does Bissonnette leave us? For practitioners who find themselves disputing cases’ arbitrability, perhaps in a narrowing dispute over whether workers’ tasks and locations give rise to “engage[ment] in foreign or interstate commerce.” § 1. Bisonnette certainly kept that door open, declining to decide whether plaintiffs were “transportation workers” under § 1 “because they deliver[ed] baked goods only in Connecticut.” Bissonnette, 2024 WL 1588708, at *6. And then-Judge Barett of the Seventh Circuit provides some insight into her thinking on the issue: “[T]o fall within the exemption, the workers must be connected not simply to the goods, but to the act of moving those goods across state or national borders.” Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 802 (7th Cir. 2020). Perhaps the Court’s recent arbitration unanimity is short-lived, an exception proving a rule.

At the very least, while Bissonette was clear in its sound rejection of the Second Circuit’s reasoning about the industries in which plaintiffs must (or mustn’t) work, it provided scant guidance on what to do with where plaintiffs work, and the extent to which they must move goods “across state or national borders.” Id. Time will tell, for purposes of determining where workers now fit under the Arbitration Act, which industries demand tasks that overcome the hurdles these borders impose on plaintiffs seeking to avoid forced arbitration—regardless of whether they work in the bakery, transportation, or any other industry. In any event, it seems safe to say the Arbitration Act will once again find itself before the Supreme Court.

About the Author

Attorney Engram Wilkinson specializes in employment law. He graduated top of his class from the University of California College of Law, San Francisco. He honed his skills through clerkships with federal judges in the Northern District of California, the Tenth Circuit, and the District of Colorado before joining Ogborn Mihm, LLP. With a track record of success at prominent employment law firms and as an Employee Advocacy Fellow with the National Employment Lawyers Association, Engram is dedicated to championing workers’ rights. In Denver, his involvement in various employment law cases underscores his commitment to fairness and justice in the workplace. He further solidifies his authority in the field through his contributions, including writing on employment law topics.

[1] Notably, Flowers was the same defendant in Brock, the Colorado federal district court case that applied Saxon and reached Bissonette’s same essential conclusion: “The cramped requirement that a worker must belong to a class of workers in the ‘transportation industry’ is . . . inconsistent with § 1.” Brock¸673 F. Supp. 3d at 1188 n.7 (citation omitted).