The Transportation Worker Exemption: What it is, why it matters, and what we can learn from two 2024 cases addressing it.

In recent years, many employers have sought to shield themselves from class actions, as well as individual claims of all sorts, by requiring their workers to sign arbitration agreements. These agreements usually bar any kind of collective action. They also require workers to proceed in arbitration forums rather than in court. The reason for this development is clear: Employers want to avoid class actions. They also want to avoid being accountable to a jury and/or a judge. Instead, they would rather have any claims made against them decided by an arbitrator whom they pay for.

One of the main reasons that employers can get away with this tactic is that the Federal Arbitration Act (FAA) provides generally that arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. § 2. This clause largely prevents states from limiting the scope of arbitration agreements. See, e.g., Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 360 (holding that Gentry v. Superior Court (2007) 42 Cal.4th 443 was abrogated by United States Supreme Court precedent interpreting the FAA).

However, due to historical reasons not explored here, the FAA provides that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U. S. C. § 1. This is known as the transportation worker exemption. Generally speaking, workers who fall within the scope of that exemption are not required to arbitrate claims against their employers.

Over twenty years ago, the U.S. Supreme Court limited the scope of the transportation worker exemption in a case called Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001). In that case, the plaintiff had argued that section 1 of the FAA exempts all contracts of employment, regardless of what a worker does. The Supreme Court rejected that argument, holding instead that  the general phrase “class of workers engaged in … commerce” is “controlled and defined by reference to” the specific categories “seamen” and “railroad employees” that precede it. 532 U.S. at 115.

In other words, the transportation worker exception must be interpreted narrowly, limiting its applicability to the contracts of workers who are similar to “seamen” and “railroad employees.”

More recently, however, this tide seems to have turned a bit in favor of workers. In 2019, the Supreme Court held that the exemption’s reference to “contracts of employment” applies both to employer-employee agreements and to agreements with independent contractors. See New Prime Inc. v. Oliveira (2019) 586 U.S. 105, 116. Then, in 2022, the Supreme Court held that the transportation worker exemption applied to a worker who loaded and unloaded cargo from airplanes that travelled in interstate commerce. Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 463.

2024 has brought more good news for workers regarding the exemption, both from the Supreme Court and from the Ninth Circuit Court of Appeals.

Ortiz v. Randstad

First, in Ortiz v. Randstad Inhouse Services, LLC (9th Cir. 2024) 95 F.4th 1152, 1161–1162, the Ninth Circuit applied the test set forth in Saxon and concluded that a worker who performed warehouse work in California was covered by the exemption. In that case, the plaintiff’s job duties included exclusively warehouse work: transporting packages to and from storage racks, helping other employees in obtaining packages so they could be shipped, and assisting another department with preparing packages for their subsequent shipment. The court noted that the plaintiff was not involved in unloading shipping containers upon their arrival or loading them into trucks when they left the warehouse.

Turning to Saxon‘s second step, the Ninth Circuit found that the district court had correctly concluded that the plaintiff’s class of workers “play[ed] a direct and ‘necessary role in the free flow of goods’ across borders” and “actively ‘engaged in transportation’ ” of such goods. The plaintiff handled Adidas products near the very heart of their supply chain. In each case, the relevant goods were still moving in interstate commerce when the employee interacted with them, and each employee played a necessary part in facilitating their continued movement.

Accordingly, the Ninth Circuit concluded that the plaintiff’s job description met all three benchmarks laid out in Saxon: he fulfilled a small but nevertheless “direct and necessary” role in the interstate commerce of goods by ensuring that goods would reach their final destination by processing and storing them while they awaited further interstate transport. He was also “actively engaged” and “intimately involved with” transportation: he handled goods as they went through the process of entering, temporarily occupying, and subsequently leaving the warehouse—a necessary step in their ongoing interstate journey to their final destination.

He was therefore actively engaged in the interstate commerce of goods. So the exemption applied and he was free to bring his class action claims against the defendant.

Bissonnette v. LePage Bakeries Park St., LLC

Then, in April 2024, a unanimous Supreme Court clarified that a transportation worker does not have to work for a company in the transportation industry to be exempt under section 1 of the FAA. Bissonnette v. LePage Bakeries Park St., LLC (2024) 601 U.S. –, 144 S.Ct. 905, 909. In that case, the plaintiffs delivered baked goods made by Flowers Foods (which makes Wonder Bread, among other things). The Second District Court of Appeals held that the plaintiffs were in the “bakery industry” not the transportation industry. The Supreme Court rejected that analysis, holding instead that what mattered was what the plaintiffs actually did.

These cases help to clarify which types of workers are exempt from the FAA which, as discussed above, would generally allow them to bring class actions and other types of claims in court. If you have questions about your rights at work, please feel free to contact Hunter Pyle Law and to make use of our free and confidential intake process. We can be reached at (510) 444-4400, or at inquire@hunterpylelaw.com.

California Supreme Court Rules that Whistleblower Protections Apply to Employees Who Disclose Illegal Conduct Already Known to an Employer

In 1984, the Legislature enacted California Labor Code section 1102.5 in order to protect whistleblowers from retaliation against their employers.  The law was amended in 2003 and again in 2013, to add protections afforded to employees.  In 2013, specifically, the Legislature amended section 1102.5(b), so that an employee’s disclosure “to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or non-compliance” was deemed protected activity.  On May 22, 2023, the California Supreme Court addressed whether reporting a violation that is already known to an employer or agency constitutes a protected disclosure under Labor Code section 1102.5(b) in People ex. Rel. Lilia Garcia-Brower v. Kolla’s, Inc., S269456. (more…)

Liability of Companies for Outsourced Workers under California Law

Some businesses in California use other companies to provide their workers. The company that provides the workers is sometimes referred to as a “Labor Contractor.” Unfortunately, Labor Contractors may, for a number of reasons, stop paying their workers. The question then is whether the workers can sue the business that used the Labor Contractor for their unpaid wages.

In 2014, California enacted a statute to address this situation: Labor Code section 2810.3.  (more…)

Meal Breaks for Public Sector and UC Health Care Workers

California law now guarantees meal breaks and rest periods to public sector and UC workers who provide or support direct patient care in a hospital, clinic, or public health setting.

Private sector nurses have been guaranteed meal breaks and rest periods for some time. However, public sector nurses have not enjoyed these basic protections, even though they perform the same job duties. (more…)

California Law Protects Employees with Potential or Perceived Disabilities

While California law protects employees who are disabled, it also protects workers whose employers perceive them to have a physical or mental impairment that is disabling, potentially disabling, or perceived as disabling or potentially disabling. See Cal. Gov’t Code § 12926.1(b). In other words, California law protects workers from adverse employment actions because their employer “erroneously or mistakenly believed” them to have or have had a disability. See Cal. Gov’t Code § 12926.1(d).

For example, in one case, Moore v. Regents of Univ. of Cal,. 248 Cal.App.4th 216 (2016), an employee had a heart condition and wore a “LifeVest” to work that served as an external defibrillator. While she assured her employer that she would be able to carry out her job duties, in response, her employer stated that she was a “liability to the department.” Thereafter, her employer terminated her employment. The Court found that the employer’s “liability to the department” statement could be viewed as evidence of discriminatory animus of a perceived disability.

Moreover, in another case, Soria v. Univision Radio L. A., Inc., 5 Cal.App.5th 570 (2016), an employee had a tumor that was ultimately determined to be malignant. It was undisputed that the tumor did not interfere with her ability to perform her job duties. However, she was eventually terminated. The Court found that the employee still qualified as disabled because when she was terminated, her tumor had the potential to be or become malignant or could continue to grow to limit a major life activity. The Court reasoned: “The Legislature intended to protect employees from adverse employment action by employers concerned about what may happen in the future.”

If you believe your employer is taking an adverse employment action against you because of a potential or perceived disability please feel free to call the experienced workers’ rights attorneys at Hunter Pyle Law, and to make use of our free and confidential initial intake process.  We can be reached at (510) 444-4400, or at inquire@hunterpylelaw.com.

An Employer’s Duty to Provide a Reasonable Accommodation

Under the Fair Employment and Housing Act (FEHA), an employee must generally provide an employer notice of the need for a reasonable accommodation for his or her disability.  Achal v. Gate Gourmet, Inc., N.D. Cal. 2015, 114 F.Supp.3d 781.  There is no one set way to request an accommodation, but an employer is not required to provide a reasonable accommodation until it is aware of the employee or applicant’s disability and physical limitations. (more…)

An Employer’s Duty to Provide a Reasonable Accommodation

Under the California Fair Employment and Housing Act (FEHA), an employer must make a reasonable accommodation for the known disability of an employee.  Cal. Gov. Code §12940(m); Department of Fair Employment and Housing v. Lucent Technologies, Inc. (9th Cir. 2011) 642 F.3d 728, 743. Failure to reasonably accommodate a disabled employee or applicant is a violation of the FEHA in and of itself.  Brown v. Los Angeles Unified School District (2021) 60 Cal. App. 5th 1092, 1107;  Furtado v. State Personnel Bd. (2013) 212 Cal.App.4th 729, 745. (more…)

Disability Discrimination at Work is Illegal under California Law

California’s Fair Employment and Housing Act (“FEHA”) makes it unlawful to refuse to hire, discharge, or discriminate against a person because of their physical or mental disability or medical condition.[1] Courts have interpreted the term “to discriminate” as used in that context to mean “to treat differently.”[2] An employer “has treated an employee differently ‘because of’ a disability when the disability is a substantial motivating reason for the employer’s decision to subject the employee to an adverse employment action.”[3] (more…)

Retaliation against Employees for Requesting Disability Accommodations: Your Rights under California Law

Section 12940(h) of California’s Fair Employment and Housing Act (FEHA) provides that it is illegal for an employer to retaliate against an employee who has opposed any practices that violated the FEHA. Section 12940(m)(2), enacted in 2015, further provides that it is illegal for an employer to retaliate or otherwise discriminate against a person for requesting accommodation for a disability.[1] That protection applies regardless of whether the request for accommodation was granted or not.

Pursuant to these sections, employers violate California law if they retaliate against an employee who requests an accommodation. That is true both in cases where the employer grants the accommodation and in cases where the accommodation is denied. If the employee has a reasonable belief that the way in which her request for accommodation was handled was unlawful, and complains about it, and is retaliated against for doing so, that is also a violation of the FEHA.

The interplay between these sections was explored in Martinez v. Costco Wholesale Corporation (S.D. Cal. 2020) 481 F.Supp.3d 1076. There, the plaintiff had requested accommodations involving her work-related travel to Mexico. The employer denied her requests, which she opposed. The employer then allegedly retaliated against her for requesting the accommodations and for complaining when her requests were denied. The court concluded that the plaintiff had sufficiently alleged that she had engaged in a protected activity under the FEHA and denied the defendant’s motion for summary adjudication on the plaintiff’s claim for retaliation.

In Moore v. Regents of University of California (2016) 248 Cal.App.4th 216, the court considered the related question of whether notifying an employer of a medical condition, without more, constituted a protected activity under the FEHA. There, the plaintiff had notified the University of California, her employer, that she had a heart condition. The court found that merely providing such notice was not protected activity under the retaliation provisions of the FEHA because it did not involve engaging in opposition to any practices forbidden under the FEHA. Nor did it involve the filing of a complaint, testifying, or assisting in any proceeding under the FEHA.

To be clear, however, while such notification may not constitute protected activity for the purposes of a retaliation claim, it may trigger a duty on the part of the employer to engage in an interactive process in order to determine whether there are reasonable accommodations available that could assist the employee. See Govt. Code § 12940(n). The duty to engage in that process will be explored further in other posts on this blog.

Finally, in Dinslage v. City and County of San Francisco (2016) 5 Cal.App.5th 368, the court addressed the question of whether a plaintiff’s support for the rights of the disabled community, as well as his opposition to the elimination of a program that benefitted that community, were protected activities under the FEHA. The court found that the actions that the plaintiff opposed were not violations of the FEHA, which was fatal to his claim: “That [plaintiff] opposed what he viewed as unwise or even improper actions by the Department is not enough to make his opposition a protected activity.”   5 Cal.App.5th at 382.

If you have questions about reasonable accommodations or retaliation in the workplace, please feel free to contact the attorneys at Hunter Pyle Law. We can be reached at (510) 444-4400 or at inquire@hunterpylelaw.com.

[1] Prior to that amendment, courts had held that the FEHA did not prohibit retaliation against employees for requesting accommodations. See Rope v. Auto–Chlor System of Washington, Inc. (2013) 220 Cal.App.4th 635, 652–653 (Under FEHA and related regulations, “a mere request—or even repeated requests—for an accommodation, without more,” was not protected activity.)

Disability Harassment in California — Your Rights at Work

California’s Fair Employment and Housing Act (FEHA) prohibits employers[1] from harassing employees, applicants, unpaid interns, and volunteers because of their “physical disability, mental disability, medical condition, [or] genetic information,” among other things. Gov. Code, § 12940(j)(1). It separately provides that employers are liable when they fail to take all reasonable steps necessary to prevent harassment from occurring. Gov. Code, § 12940(k).

Employers are strictly liable for disability harassment committed by their agents or supervisors.[2] State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1034. Employers may be liable for harassment committed by employees who are not agents or supervisors if the employer, or its agents or supervisors, knows or should have known about the conduct and failed to take “immediate and appropriate corrective action.” Gov. Code, § 12940(j)(1). Employers are also responsible for the acts of nonemployees who engage in disability harassment when the employers, or its agents or supervisors, know or should have known of the conduct and failed to take immediate and appropriate corrective action. Ibid.

Employees who commit disability harassment are personally liable for that harassment. Gov. Code, § 12940(j)(3). Liability on the part of the harasser lies regardless of whether the employer knew or should have known about the conduct. Ibid.

In order to prevail on a claim for disability harassment, a plaintiff must show that the conduct was “severe enough or sufficiently pervasive to alter the conditions of employment and create a work environment that qualifies as hostile or abusive to employees” because of their disability. Hope v. California Youth Authority (2005) 134 Cal.App.4th 577, 588. However, the McDonnell Douglas burden-shifting framework does not apply to such claims because “there is no possible justification for harassment in the workplace.” Phan v. CSK Auto, Inc. (N.D. Cal., Aug. 27, 2012, No. 11-CV-02327 YGR, 2012 WL 3727305, at *10, fn. 11. Therefore, an employer cannot offer a legitimate nondiscriminatory reason for it.

The parameters of a disability harassment claim were explored in Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908. The plaintiff in that case was a severely obese woman who had worked at the Berkeley Tennis Club for more than 15 years.[3] After she was terminated, she brought suit, including claims for disability harassment based upon comments that had been made about her weight. These comments included the following:

1. After the plaintiff indicated that it might be a problem to get a properly sized uniform for her because she shopped in specialty stores, the club’s general manager responded by laughing and mockingly saying, “Oh yeah, that’s right.”
2. In November 2012, the club’s general manager asked the plaintiff whether she had thought about having weight-loss surgery.
3. The plaintiff heard the general manager tell the kitchen staff on one occasion not to give her extra food because she did not need it.

In addition, the plaintiff alleged that the defendant had ordered shirts that were too small for her and then disciplined her for resisting the uniform policy. She further alleged that she was paid less than other employees and denied extra hours and other positions within the company.

The trial court granted summary adjudication of the plaintiffs’ claim for disability harassment, among other claims. On appeal, the First District Court of Appeal reversed, finding that there was a triable issue of material fact as to the cause of action for disability harassment. The court noted that the comments mentioned above were not sufficiently severe nor sufficiently pervasive enough to support a FEHA harassment claim. However, viewed in context with other actions taken by the club, and while it was a “close call,” there was sufficient evidence to reverse the grant of summary adjudication. 18 Cal.App.5th at 940–941.

Furthermore, and in addition to prohibiting disability-based harassment, the FEHA also prohibits harassment based upon associating with individuals with a disability. See Govt. Code section 12926(o).[4] That was the conclusion in the unreported decision of O’brien v. California Department of Corrections and Rehabilitation (Cal. Ct. App., May 10, 2021) 2021 A.D. Cases 172611. In O’brien, the court considered the type of association necessary to support such a claim and declined to limit it to situations in which the plaintiff had a personal relationship with the disabled individual.

The attorneys at Hunter Pyle Law have handled a wide variety of disability-related cases. If you think your employer may have violated your rights, please feel free to contact us at (510) 444-4400, or at inquire@hunterpylelaw.com.

[1] Government Code section 12940(j)(4)(A) provides that for purposes of section 12940(j) only, “employer” means any person regularly employing one or more persons or regularly receiving the services of one or more persons providing services pursuant to a contract, or any person acting as an agent of an employer, directly or indirectly, the state, or any political or civil subdivision of the state, and cities. However, the term “employer” does not include a religious association or corporation not organized for private profit, except as provided in Government Code section 12926.2.

[2] State Dept. of Health Services further held that the avoidable consequences doctrine applies to damage claims under the FEHA. 31 Cal.4th at 1034. Under that doctrine plaintiffs are unable to recover damages that the plaintiff could have avoided with reasonable effort and without undue risk, expense, or humiliation. Ibid.

[3] The opinion notes that the plaintiff’s weight interfered with several daily life functions, including bathing, walking, and using transportation. Furthermore, she was unable stand for more than an hour, could not walk more than a mile at a time, and often experienced significant shortness of breath from engaging in basic activities. Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908, 919.

[4] Government Code section 12926(o) provides in relevant part as follows: “’[P]hysical disability, mental disability’…includes a perception that the person is associated with a person who has, or is perceived to have, any of those characteristics.”