Heidi Eastus v. ISS Facility Services, Inc. ( 2020 )

Case: 19-20258 Document: 00515429429 Page: 1 Date Filed: 05/27/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 19-20258
Fifth Circuit
FILED
May 27, 2020
HEIDI EASTUS, Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
ISS FACILITY SERVICES, INCORPORATED; LUFTHANSA SYSTEMS
AMERICAS, INCORPORATED; DEUTSCHE LUFTHANSA, A.G.,
INCORPORATED, doing business as Lufthansa German Airlines,
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Texas
Before OWEN, Chief Judge, and SOUTHWICK and OLDHAM, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
Heidi Eastus appeals an order compelling arbitration. She concedes that
she signed an arbitration agreement in her employment contract. The sole
question here is whether Eastus is exempt from the Federal Arbitration Act
under the Transportation Worker Exemption. She is not. We AFFIRM.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Heidi Eastus’ claims relate to her employment with ISS Facility
Services, Inc. Her complaint states that she primarily “supervised 25 part-
time and 2 full-time ticketing and gate agents” at the George Bush
Intercontinental Airport in Houston, Texas. Her employer ISS assigned her to
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be an account manager for one of its clients at the airport, Deutsche Lufthansa,
A.G., Inc., which did business under the name of Lufthansa German Airlines.
The agents Eastus supervised “ticketed passengers, accepted or rejected
baggage and goods, issued tags for all baggage and goods, and placed baggage
and goods on conveyor belts to transport for additional security screening and
loading.” As needed, Eastus would herself handle passengers’ luggage.
Eastus brought employment-discrimination and retaliation claims
against ISS and two Lufthansa entities. The defendants filed a motion to
compel arbitration based on an arbitration agreement in Eastus’ employment
contract with ISS. Eastus argued arbitration could not be compelled because
she is exempt from the Federal Arbitration Act (“FAA”) under what has been
labeled the Transportation Worker Exemption. The district court compelled
arbitration. It found that Eastus’ “job was related to transporting passengers
on an airline” and that “[a]ny handling of luggage or passenger property was
incidental” to her main job duties. To the district court, that meant Eastus
herself was not involved “‘in the movement of goods in interstate commerce in
the same way that seaman and railroad workers are.’” Rojas v. TK Commc’ns,
Inc., 87 F.3d 745, 748 (5th Cir. 1996). Eastus timely appealed.
DISCUSSION
“We review an order compelling arbitration de novo.” Hays v. HCA
Holdings, Inc., 838 F.3d 605, 608 (5th Cir. 2016). The FAA “establishes a
liberal federal policy favoring arbitration agreements.” Epic Sys. Corp. v.
Lewis, 138 S. Ct. 1612, 1621 (2018). Absent a clear statutory exemption to the
arbitrability of a plaintiff’s claim, courts must “respect and enforce agreements
to arbitrate.” Id.
Section 2 of the FAA defines the class of arbitrable cases:
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A written provision in any maritime transaction or a contract
evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract or
transaction, or the refusal to perform the whole or any part thereof,
or an agreement in writing to submit to arbitration an existing
controversy arising out of such a contract, transaction, or refusal,
shall be 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. The Supreme Court has held that employment contracts are
contracts “evidencing a transaction involving commerce.” Circuit City Stores,
Inc. v. Adams, 532 U.S. 105, 113, 119 (2001).
Under this caselaw, Eastus’ signed arbitration agreement is “valid,
irrevocable, and enforceable” under Section 2 unless an exemption applies.
Eastus argues the following is applicable: “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. The
parties refer to this as the Transportation Worker Exemption. Though the
exemption mentions two other categories of workers engaged in foreign or
interstate commerce, it does not mention airline employees. Nevertheless, the
statutory provision contains a catchall clause. The issue before us is whether
Eastus falls into that residual category of workers.
We first analyze the principal caselaw, and we then apply it to this case.
I. Caselaw interpreting the residual clause
Before the Supreme Court’s splintered 2001 decision in Circuit City,
most federal courts of appeals, including this one, held that the residual clause
language of “other class of workers engaged in foreign or interstate commerce”
would “be given a narrow reading,” such that it should apply only to
employment contracts of “any other class of workers actually engaged in the
movement of goods in interstate commerce in the same way that seamen and
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railroad workers are.” Rojas, 87 F.3d at 748. Uncertainty arose after Circuit
City because there was no majority opinion, and the reference to this former
view was not as clear as, in retrospect perhaps, it should have been.
What the Supreme Court in 2001 did not do is alter the general principle
that the language of being “engaged in foreign or interstate commerce” was to
be given a narrow construction. Circuit City, 532 U.S. at 109. The Court
concluded that because “engaged in interstate commerce” is preceded by a
listing of specific occupations within the transportation industry, “railroad
workers” and “seamen,” “Section 1 exempts from the FAA only contracts of
employment of transportation workers.” Id. at 119.
The Court did not itself define “transportation workers.” It did, though,
state: “Most Courts of Appeals conclude the exclusion provision is limited to
transportation workers, defined, for instance, as those workers ‘actually
engaged in the movement of goods in interstate commerce.’” Id. at 112 (citation
omitted). Stating what most lower federal appellate courts had done is not the
same thing as stating that the Court agreed with the limitation. Justice
Souter, in his dissent, though, interpreted that language as the Court’s placing
its “imprimatur on the majority view among the Courts of Appeals.” Id. at
134–35 (Souter, J., dissenting).
There is not unanimity among the circuits on what to make of the
Supreme Court’s reference to what had been the majority view pre–Circuit
City. Compare Int’l Bhd. of Teamsters Local Union No. 50 v. Kienstra Precast,
LLC, 702 F.3d 954, 956 (7th Cir. 2012) (Court did place its imprimatur on the
majority view), with Singh v. Uber Techs. Inc., 939 F.3d 210, 223 (3d Cir. 2019)
(Court was only summarizing the prior interpretations).
Regardless of other circuits’ views, the Fifth Circuit has already stated
that the Supreme Court in Circuit City was adopting an interpretation “fully
consistent with our reasoning in Rojas,” which is one of the cases expressing
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the former majority view. Brown v. Nabors Offshore Corp., 339 F.3d 391, 394
(5th Cir. 2003). The key question in resolving the appeal before us is whether
the worker needs to be engaged in the movement of goods. Though that was
not the question in Brown, we did discuss it in Rojas, which this court has held
remains the operative standard after Circuit City. In Rojas, we quoted
favorably another circuit’s language that workers covered by the exemption
are those “actually engaged in the movement of goods in interstate commerce
in the same way that seamen and railroad workers are.” Rojas, 87 F.3d at 748
(quoting Asplundh Tree Expert Co. v. Bates, 71 F.3d 592, 601 (6th Cir.1995)).
We now consider the parties’ arguments here.
II. Whether the residual exemption applies because of a similar dispute
resolution to railroad workers
We first deal with some less substantial arguments.
Eastus initially contends that “employees of airlines are enumerated in
the Transportation Worker Exemption in the same way that railroad workers
are enumerated.” This is an odd argument, because in this context
“enumeration” means to list one by one, and airline workers are not on the list.
Instead, for an airline worker to fall within the exemption, the airline worker
must fit within the exemption’s residual clause: “any other class of workers
engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Indeed, Eastus
concedes that “employees of air carriers are not specifically mentioned in the
Transportation Worker” Exemption.
Eastus argues airline employees are particularly closely related to
railroad workers because the two are subject to the same dispute resolution
provisions of the Railway Labor Act, citing 45 U.S.C. §§ 181–188. The
argument is then made that airline employees must be exempt like railroad
workers. In Circuit City, the Supreme Court referred to the Railway Labor
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Act, which was nearing passage as the FAA was adopted, and “assume[d] that
Congress excluded ‘seamen’ and ‘railroad employees’ from the FAA for the
simple reason that it did not wish to unsettle established or developing
statutory dispute resolution schemes covering specific workers.” 532 U.S. at
121. We acknowledge that Congress might reasonably have excluded airline
employees from the FAA for the same reason, but Congress did not add them
to the list. The dispute-resolution overlap is irrelevant because we are not
searching for any similarities, but only whether Eastus’ job required her to
engage “in the movement of goods in interstate commerce in the same way that
seamen and railroad workers are.” Rojas, 87 F.3d at 748.
III. Proper interpretation of Circuit City
We start with Eastus’ two arguments construing Circuit City. First,
Eastus contends the district court erroneously based its decision on a
misinterpretation of Circuit City. Specifically, Eastus says the district court
incorrectly read Circuit City as if the Court itself defined a transportation
worker as a worker “actually engaged in the movement of goods in interstate
commerce.” Second, Eastus follows the first argument by identifying the three
times the word “goods” appears in Circuit City and by then arguing that “[a]t
no time did the Supreme Court use the term ‘goods’ with the intent to limit the
application of the Transportation Worker Exemption to workers who are
engaged in the movement of goods in interstate commerce.”
The district court here seemed to quote Circuit City as if the Court itself
defined transportation worker as opposed to stating the definition used by a
majority of courts of appeals. That interpretation, though, is not legal error.
The district court based its ruling on this court’s standard in Rojas. As noted
earlier, we have already held that the pre–Circuit City transportation-worker
standard in Rojas remains operative. Brown, 339 F.3d at 394. Further,
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regardless of the context in which Circuit City used the word “goods,” it did not
disapprove of the Rojas standard. We stay on course, then, to determine if
Eastus herself was engaged in the movement of goods.
IV. Whether Eastus was engaged in the movement of goods
First, we reject Eastus’ urging that we adopt a multiple-factor test used
in another circuit. See Lenz v. Yellow Transp., 431 F.3d 348, 352 (8th Cir.
2005). 1 No other circuit has adopted this test, and in our view, it unduly adds
to the complexity of the analysis.
Eastus also argues that even under the Rojas standard, she engaged in
the movement of goods. To support this argument, Eastus broadly defines
“goods” in two ways. Eastus contends she was engaged in the movement of
goods because “[e]very passenger who gets on an airplane brings some form of
goods with them whether they be in a purse, pocket, bag, backpack, briefcase
or luggage.” She also relies on a recent Third Circuit decision that held
transportation workers who transport passengers instead of goods may still be
excluded from the FAA under the residual clause. See Singh, 939 F.3d at 226.
The district court did in part rely on a distinction between passengers and
1 The non-exclusive factors include:
first, whether the employee works in the transportation industry; second,
whether the employee is directly responsible for transporting the goods in
interstate commerce; third, whether the employee handles goods that travel
interstate; fourth, whether the employee supervises employees who are
themselves transportation workers, such as truck drivers; fifth, whether, like
seamen or railroad employees, the employee is within a class of employees for
which special arbitration already existed when Congress enacted the FAA;
sixth, whether the vehicle itself is vital to the commercial enterprise of the
employer; seventh, whether a strike by the employee would disrupt interstate
commerce; and eighth, the nexus that exists between the employee’s job duties
and the vehicle the employee uses in carrying out his duties (i.e., a truck driver
whose only job is to deliver goods cannot perform his job without a truck).
Lenz, 431 F.3d at 352.
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goods, but we may affirm on “any ground supported by the record, even if it is
different from that relied on by the district court.” Holtzclaw v. DSC Commc’ns
Corp., 255 F.3d 254, 258 (5th Cir. 2001). Important to us is that though the
passengers moved in interstate commerce, Eastus’ role preceded that
movement.
At least two courts since Circuit City have held that workers who load or
unload goods that others transport in interstate commerce are not
transportation workers. See Saxon v. Sw. Airlines Co., No. 19-CV-0403, 2019
WL 4958247, at *1 n.2, *7 (N.D. Ill. Oct. 8, 2019) (holding airline ramp
supervisor whose job duties presumably included loading and unloading
luggage to and from airplanes was not a transportation worker); Furlough v.
Capstone Logistics, LLC, 2019 WL 2076723, at *7 (N.D. Cal. May 10, 2019)
(holding warehouseman whose job duties included “loading, unloading, and
handling freight; communicating with drivers; and monitoring conditions on
the docks” was not a transportation worker). Of course, these opinions have
no precedential effect, but we identify them as examples of how federal judges
have analyzed similar issues. Further, there is a distinction between handling
goods and moving them in Section 1 of the FAA’s enumeration of seamen and
not longshoremen, who are the workers who load and unload ships. The FAA
does not apply to longshoremen. That conclusion comes first from the Supreme
Court’s holding that whether defined “under the Jones Act or general maritime
law, seamen do not include land-based workers.” McDermott Int’l, Inc. v.
Wilander, 498 U.S. 337, 348 (1991). The other step is that this court uses the
Jones Act’s definition of “seaman” to determine Section 1 exemption from the
FAA. See Brown, 339 F.3d at 395.
Eastus properly conceded during oral argument that longshoremen and
delivery-truck loaders are not transportation workers under Section 1.
Loading or unloading a boat or truck with goods prepares the goods for or
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removes them from transportation. In this context, Eastus’ duties could at
most be construed as loading and unloading airplanes. She was not engaged
in an aircraft’s actual movement in interstate commerce. The exemption in
the FAA does not apply to her, and arbitration was validly ordered to resolve
her dispute.
AFFIRMED.
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