ORTIZ V. RANDSTAD INHOUSE SERVICES, LLC, No. 23-55147 (9th Cir. 2024)
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The plaintiff, Adan Ortiz, worked for two companies, GXO Logistics Supply Chain, Inc., and Randstad Inhouse Services, LLC, both of which were his former employers. Ortiz's role involved handling goods in a California warehouse facility operated by GXO. The goods, primarily Adidas products, were received from mostly international locations and stored at the warehouse for several days to a few weeks before being shipped to customers and retailers in various states.
Ortiz filed a class action lawsuit against his former employers alleging various violations of California labor law. The defendants moved to compel arbitration pursuant to an arbitration agreement in Ortiz's employment contract. Ortiz opposed this on the grounds that the agreement could not be enforced under federal or state law.
The United States Court of Appeals for the Ninth Circuit affirmed in part the district court's order denying the appellants' motion to compel arbitration. It concluded that Ortiz belonged to a class of workers engaged in foreign or interstate commerce and was therefore exempted from the Federal Arbitration Act (FAA). The court reasoned that although Ortiz's duties were performed entirely within one state's borders, his role facilitated the continued travel of goods through an interstate supply chain, making him a necessary part of the flow of goods in interstate commerce. The court also rejected the argument that an employee must necessarily be employed by a transportation industry company to qualify for the transportation worker exemption.
Court Description: Arbitration. In this consolidated interlocutory appeal, the panel affirmed in part the district court’s order denying appellants’ motion to compel arbitration, insofar as it concluded that the transportation worker exemption precluded the application of the Federal Arbitration Act (“FAA”) to the parties’ arbitration agreement.
Plaintiff sued his former employers, appellants Randstad Inhouse Services, LLC, and GXO Logistics Supply Chain, Inc., and appellants moved to compel arbitration pursuant to an arbitration agreement in the employment contract. During the pertinent period of employment, plaintiff worked at a California warehouse facility operated by GXO, which received Adidas watches, apparel, and shoes from mostly international locations. The district court declined to compel arbitration. Appellants contend that the arbitration agreement is enforceable under the FAA.
The panel held that plaintiff belonged to a class of workers engaged in foreign or interstate commerce and was therefore exempted from the FAA. The panel considered the two-step analysis in Saxon v. Southwest Airlines Co., 596 U.S. 450, 455-59 (2022). Applying Saxon’s first step, the panel considered plaintiff’s job description and held that the district court properly concluded that plaintiff’s job duties included exclusively warehouse work. Applying Saxon’s second step, the panel upheld the district court’s conclusion that plaintiff belonged to a class of workers who played a direct and necessary role in the free flow of goods across borders and actively engaged in the transportation of such goods. Plaintiff’s job description met all the benchmarks laid out in Saxon for plaintiff to qualify as an exempt transportation worker.
The panel rejected appellants’ arguments to the contrary. An employee is not categorically excluded from the transportation worker exemption simply because he performs duties on a purely local basis. Though plaintiff moved goods only a short distance across the warehouse floor and onto storage racks, he nevertheless moved them, and with the direct purpose of facilitating their continued travel through an interstate supply chain. Finally, the panel held that an employee need not necessarily be employed by an employer in the transportation industry to qualify for the transportation worker exemption.
The panel addressed state law issues in a concurrently filed memorandum disposition.
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