95 F.4th 1152
9th Cir.2024Background
- Adan Ortiz was employed as a warehouse worker at a California facility operated by GXO Logistics, processing Adidas products as they moved through an interstate supply chain.
- Ortiz signed an arbitration agreement governed by the Federal Arbitration Act (FAA), which the employers moved to enforce after Ortiz sued for violations of California labor law.
- The core dispute is whether Ortiz qualifies for the FAA's transportation worker exemption, which would prevent arbitration under federal law.
- The district court held that Ortiz was exempt under the FAA, denying the motion to compel arbitration; the employers appealed.
- The Ninth Circuit reviewed the case de novo, focusing exclusively on the applicability of the FAA transportation worker exemption and not on alternative state law bases.
- The precise work performed by Ortiz did not involve personally transporting or loading/unloading goods from shipping containers but included essential warehouse processing for goods in ongoing interstate commerce.
Issues
| Issue | Ortiz's Argument | Employers' Argument | Held |
|---|---|---|---|
| Applicability of FAA’s transportation worker exemption | Ortiz is a transportation worker under § 1 because his work was essential to goods moving in interstate commerce | Ortiz did not transport goods across state lines or work in the transportation industry and his work was purely intrastate warehouse work | Ortiz qualifies for the exemption; his role was directly connected to the interstate flow of goods |
| Relevance of job duties versus employer industry | Exemption should focus on the nature of the work performed (handling goods in transit), not the industry of the employer | Only employees in the transportation industry performing interstate work qualify | The nature of work controls, not employer’s industry; warehouse workers integral to the supply chain may qualify |
| Whether distance or geographic boundaries matter | Physical crossing of state lines is unnecessary; work must be an integral part of ongoing interstate transportation | Only work involving physical interstate transportation should qualify | Exemption is based on connection to interstate commerce, regardless of geographic limits |
| Scope of case law and Supreme Court precedent | Similar to Saxon; actively handling goods during their interstate journey | Saxon and other precedents do not cover warehouse workers like Ortiz who do not load/unload containers or drive trucks | Saxon’s standard applies; active, direct involvement in moving goods in the supply chain suffices |
Key Cases Cited
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (Supreme Court case interpreting the narrow scope of the FAA's transportation worker exemption)
- Southwest Airlines Co. v. Saxon, 596 U.S. 450 (Supreme Court case adopting a functional approach to defining "transportation workers" under the FAA)
- Rittmann v. Amazon.com, Inc., 971 F.3d 904 (Ninth Circuit case holding last-mile delivery drivers engaged in interstate commerce are exempt from FAA)
- Capriole v. Uber Technologies, Inc., 7 F.4th 854 (Ninth Circuit case distinguishing Uber drivers from those qualifying for exemption under Rittmann)