Voluntary arbitration agreements involving federal law are enforced under the Federal Arbitration Act (FAA). Section 1 of the FAA exempts certain classes of workers, however, from the enforcement of arbitration. The U.S. Supreme Court recently resolved a federal circuit court split over whether employees who load cargo for the transportation of goods are engaged in commerce and exempt from arbitration under Section 1.
FAA and Section 1 Exemption
The FAA, enacted in 1925, favors arbitration to resolve employment disputes. Congress limited the FAA under Section 1, exempting seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce from arbitration.
