For the second time in the space of two weeks, the Supreme Court issued a narrow, but unanimous, decision against a company seeking arbitration. Today's decision in Southwest Airlines v. Saxon, like the one two weeks ago in Morgan v. Sundance, Inc., involved an employment arbitration agreement, not a consumer agreement. And the specific issue decided today, concerning the scope of the Federal Arbitration Act's exclusion of arbitration agreements involving transportation workers, arises only in employment cases, unlike the issue regarding waiver of arbitration decided in Morgan. But one important feature unites both cases: In both, the Supreme Court rejected the view that the FAA's "proarbitration purposes" provide a reason for courts to adopt special rules favoring arbitration when the statutory text does not provide for such favoritism. As the Court put it today, "we have no warrant to elevate vague invocations of statutory purpose over the words Congress chose." Similarly, in Morgan, the Court emphasized that "the FAA's 'policy favoring arbitration' does not authorize federal courts to invent special, arbitration-preferring procedural rules.'"
The Court's decisions under the FAA still give a lot of sway to arbitration agreements. But the decisions of the past two weeks show that the Court unanimously agrees that it can't just "make up" pro-arbitration rules, in the words of Justice Kagan's Morgan opinion.
(By the way, the holding in Saxon is that workers who help load and unload cargo from airplanes belong to a class of workers engaged in commerce within the meaning of the FAA's Section 1, which says that the Act does not apply to "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Saxon holds that workers whose typical duties directly involve them in transporting goods across state or international borders fall within the transportation-worker exception, and that loading and unloading interstate cargo is part of the interstate transportation of goods. The decision acknowledges that the "answer will not always be so plain" in other cases.)
