Amicus Curiae Brief — Neal Bissonnette, et al., Petitioners v. LePage Bakeries Park St., LLC, et al.

No. 23-51

In the Supreme Court of the United States

______________

NEAL BISSONNETTE and TYLER WOJNAROWSKI,

on behalf of themselves and all others similarly situated,

Petitioners,

v.

LEPAGE BAKERIES PARK ST., LLC; C.K. SALES CO.,

LLC; and FLOWERS FOODS, INC.,

______________

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

______________

BRIEF OF ILLINOIS, CALIFORNIA, COLORADO,

DISTRICT OF COLUMBIA, MAINE, MARYLAND,

MASSACHUSETTS, MICHIGAN, MINNESOTA, NEW

JERSEY, NEW YORK, OREGON, PENNSYLVANIA,

RHODE ISLAND, VERMONT, AND WASHINGTON

AS AMICI CURIAE IN SUPPORT OF PETITIONERS

____________

JANE ELINOR NOTZ*

Solicitor General

SARAH A. HUNGER

Deputy Solicitor General

R. HENRY WEAVER

Assistant Attorney General

*Counsel of Record

KWAME RAOUL

Illinois Attorney General

100 West Randolph Street

Chicago, Illinois 60601

(312) 814-5376

Jane.Notz@ilag.gov

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ........................................ii

INTERESTS OF AMICI CURIAE .............................. 1

SUMMARY OF ARGUMENT ..................................... 2

ARGUMENT ................................................................ 4

I. In Amici States’ Experience, A Transportation-Industry Requirement Would Unduly Complicate The

FAA’s Section 1 Exemption And Delay Resolution

Of Arbitrability ........................................................ 4

A. To assess whether a worker’s employer is in the

“transportation industry,” courts would need to

first engage in significant factual development

to determine the identity of the employer for

purposes of the FAA ......................................... 5

B. Determining whether an employer is part of the

“transportation industry” would also introduce

complicated factual disputes into the FAA’s

Section 1 exemption ........................................ 11

II. States Have An Interest In Maintaining Transparent Dispute Resolution Procedures For All Transportation Workers ................................................ 16

A. Unlike typical arbitration proceedings under

the FAA, the processes available to exempted

transportation workers are transparent........ 16

B. States are better able to protect their economies

and exercise their investigatory and enforcement powers when transportation disputes are

resolved in a transparent manner ................. 19

CONCLUSION........................................................... 23

ii

TABLE OF AUTHORITIES

Cases

Page(s)

Affiliated Foods Co-op., Inc. v. State,

611 N.W.2d 105 (Neb. 2000) ............................... 15

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ............................................. 17

Bhd. of R.R. Trainmen v. Jacksonville Terminal

Co., 394 U.S. 369 (1969) ...................................... 20

Brown v. Advantage Eng’g, Inc.,

960 F.2d 1013 (11th Cir. 1992) ............................ 19

Carpet Remnant Warehouse, Inc. v. N.J. Dep’t of

Lab., 593 A.2d 1177 (N.J. 1991) .......................... 12

Cortlandt St. Recovery Corp. v. Bonderman,

96 N.E.3d 191 (N.Y. 2018) .................................. 11

Dep’t of Lab. & Indus. v. Tradesmen Int’l, LLC,

497 P.3d 353, 362 (Wash. 2021) ............................. 9

Dir. of Bureau of Lab. Standards v. Cormier,

527 A.2d 1297 (Me. 1987) ....................................... 8

Dynamex Operations W. v. Superior Ct.,

416 P.3d 1 (Cal. 2018) ......................................... 12

Epic Sys. Corp. v. Lewis,

138 S. Ct. 1612 (2018) ......................................... 17

iii

Fairbairn v. United Air Lines, Inc.,

250 F.3d 237 (4th Cir. 2001) ............................... 19

Fed. Trade Comm’n v. Advoc. Health Care

Network, 841 F.3d 460 (7th Cir. 2016) ............... 14

Frey v. Coleman,

903 F.3d 671 (7th Cir. 2018) .................................. 6

Gebser v. Lago Vista Indep. Sch. Dist.,

524 U.S. 274 (1998) ................................................ 6

Georgia-Pacific Corp. v. Crosby,

393 So. 2d 1348 (Miss. 1981) ............................... 12

Georgia-Pacific Corp. v. State Tax Assessor,

562 A.2d 672 (Me. 1989) ...................................... 15

Greenman’s Trucking, Inc. v. Dep’t of Revenue

Servs., 504 A.2d 568 (Conn. App. Ct. 1986) ....... 15

Hagemann v. Ill. Workers’ Comp. Comm’n,

941 N.E.2d 878 (Ill. App. Ct. 2010) .................... 13

Hall v. DIRECTV, LLC,

846 F.3d 757 (4th Cir. 2017) .................................. 8

Hargrove v. Sleepy’s, LLC,

106 A.3d 449 (N.J. 2015) ..................................... 12

Hernandez v. Meridian Mgmt. Servs., LLC,

304 Cal. Rptr. 3d 402 (Ct. App. 2023) .................. 7

Howard v. Ferrellgas Partners, L.P.,

748 F.3d 975 (10th Cir. 2014) ................................ 5

iv

In re Barone,

257 A.D.2d 950 (N.Y. App. Div. 1999) ................ 12

In re Raymour & Flanigan Furniture,

964 A.2d 830 (N.J. Super. Ct. App. Div. 2009) ... 22

In re Vega,

149 N.E.3d 401 (N.Y. 2020) ....................... 9, 10, 21

Kentucky v. Marathon Petroleum Co. LP,

464 F. Supp. 3d 880 (W.D. Ky. 2020) ................. 14

L.A. Draper & Son v. Wheelabrator-Frye, Inc.,

735 F.2d 414 (11th Cir. 1984) ............................. 14

Laya v. Erin Homes, Inc.,

352 S.E.2d 93 (W. Va. 1986) ............................... 11

Legassie v. Bangor Pub. Co.,

741 A.2d 442 (Me. 1999) ....................................... 12

Mgmt. Comm. of Graystone Pines Homeowners

Ass’n ex rel. Owners of Condominiums v. Graystone Pines, Inc., 652 P.2d 896

(Utah 1982) ........................................................... 11

Moses H. Cone Mem’l Hosp. v. Mercury Constr.

Corp., 460 U.S. 1 (1983) ......................................... 5

Mount Lemmon Fire Dist. v. Guido,

139 S. Ct. 22 (2018) ................................................ 6

People ex rel. Dep’t of Lab. v. MCC Home Health

Care, Inc., 790 N.E.2d 38 (Ill. App. Ct. 2003) ..... 12

v

Reyes v. Remington Hybrid Seed Co.,

495 F.3d 403 (7th Cir. 2007) ................................. 8

Roberson v. Indus. Comm’n,

866 N.E.2d 191 (Ill. 2007) ...................................... 9

Rutherford Food Corp. v. McComb,

331 U.S. 722 (1947) ................................................ 7

Schultz v. Cap. Int’l Sec., Inc.,

466 F.3d 298 (4th Cir. 2006) ............................... 12

Sharp v. Park ‘N Fly of Tex., Inc.,

969 S.W.2d 572 (Tex. App. 1998) ......................... 15

Sinclair Builders, Inc. v. Unemployment Ins.

Comm’n, 73 A.3d 1061 (Me. 2013) ...................... 12

Southwest Airlines Co. v. Saxon,

596 U.S. 450 (2022) ................................................ 2

State Comp. Ins. Fund v. Indus. Acc. Comm’n,

158 P.2d 195 (Cal. 1945) ....................................... 9

Swanson Hay Co. v. State Emp. Sec. Dep’t,

404 P.3d 517 (Wash. Ct. App. 2017) ................ 9, 10

Tolentino v. Starwood Hotels & Resorts Worldwide

Inc., 437 S.W.3d 754 (Mo. 2014) ........................ 8, 9

Turman v. Superior Ct. of Orange Cnty.,

246 Cal. Rptr. 3d 607 (Ct. App. 2017) ................ 10

Union Oil Co. of Cal. v. Leavell,

220 F.3d 562 (7th Cir. 2000) ............................... 19

vi

West Coast Hotel Co. v. Parrish,

300 U.S. 379 (1937) ............................................. 20

Westmoreland Res., Inc. v. Mont. Dep’t of Revenue,

868 P.2d 592 (Mont. 1994) .................................. 15

White v. W. Commodities, Inc.,

295 N.W.2d 704 (Neb. 1980) ................................. 9

Yeatts Whitman v. Polygon Nw. Co.,

379 P.3d 445 (Or. 2016) ......................................... 9

Zheng v. Liberty Apparel Co. Inc.,

355 F.3d 61 (2d Cir. 2003) ..................................... 7

Statutes and Regulations

9 U.S.C. § 1 ............................................................... 1, 2

Ala. Code § 25-2-2(a) ................................................. 20

Ark. Code Ann § 11-2-108(1) .................................... 20

Cal. Lab. Code § 90.5(a)-(c) ....................................... 21

Cal. Lab. Code § 200 et seq. ......................................... 4

Cal. Lab. Code § 1171 et seq. ....................................... 4

Cal. Lab. Code § 3200 et seq. ....................................... 4

Colo. Rev. Stat. § 8-4-111(1)-(2) ................................ 20

Conn. Gen. Stat. § 31-3 .............................................. 20

vii

Del. Code Ann. tit. 19, § 107...................................... 20

Del. Code Ann. tit. 19, § 1111.................................... 20

D.C. Code § 32-1306(a) ............................................. 20

Ga. Code Ann. § 34-2-3(e) ......................................... 20

Ill. Admin. Code tit. 56, § 210.115(c) ......................... 9

15 Ill. Comp. Stat. 205/6.3(b) ................................... 21

775 Ill. Comp. Stat. 5/2-101 et seq............................... 4

820 Ill. Comp. Stat. 105/1 et seq. ................................. 4

820 Ill. Comp. Stat. 115/1 et seq. ................................. 4

820 Ill. Comp. Stat. 115/11 ........................................ 21

820 Ill. Comp. Stat. 305/1 et seq. ................................. 4

820 Ill. Comp. Stat. 305/3(3) .................................... 13

820 Ill. Comp. Stat. 305/3(19) .................................. 13

820 Ill. Comp. Stat. 405/100 et seq. ............................. 4

Kan. Stat. Ann. § 44-636 ........................................... 20

Ky. Rev. Stat. Ann. § 337.990 ................................... 20

Mass. Gen. Laws ch. 149, § 3 .................................... 20

Mass. Gen. Laws ch. 151, § 1 et seq. ........................... 4

viii

Md. Code Ann., Lab. & Empl. § 3-103 ...................... 20

Me. Rev. Stat. tit. 26, § 42 ......................................... 20

Me. Rev. Stat. tit. 26, § 661 et seq. .............................. 4

Me. Rev. Stat. tit. 26, § 1041 et seq. ............................ 4

N.D. Cent. Code § 34-06-02 ....................................... 21

N.H. Rev. Stat. Ann. § 273:9 ..................................... 20

N.H. Rev. Stat. Ann. § 275:51(I) .............................. 20

N.J. Stat. Ann. § 34:1A-1.12 ...................................... 20

N.J. Stat. Ann. § 34:11-56a et seq. .............................. 4

N.M. Stat. Ann. § 50-4-8(A)-(B)................................. 21

N.Y. Lab. Law § 190 et seq. ......................................... 4

N.Y. Lab. Law § 500 et seq. ......................................... 4

Ohio Rev. Code Ann. § 4111.04(A)-(B) ..................... 21

Or. Rev. Stat. § 651.060(1) ....................................... 21

Or. Rev. Stat. § 654.305 et seq. .................................... 4

S.D. Codified Laws § 60-5-15 .................................... 21

Utah Code Ann. § 34-28-9 ......................................... 21

Wash. Rev. Code § 49.17.010 et seq. ........................... 4

ix

Wash. Rev. Code § 50.01.005 et seq. ........................... 4

Other Authorities

1 Fletcher Cyclopedia of the Law of

Corporations § 41.................................................. 11

6 Arthur Larson et al., Larson’s Workers’ Compensation Law §§ 75.01, 77.01....................................... 13

Am. Arbitration Ass’n, Commercial Arbitration

Rules and Mediation Procedures,

Rule 45 (Sept. 1, 2022) ........................................ 18

Kate Andrias, The New Labor Law,

126 Yale L.J. 2 (2016) ............................................ 7

Bureau of Transp. Stats., U.S. Dep’t of Transp.,

Increase in Transportation Consumer Price Index

Accounts for Nearly 27% of Year-Over-Year

Overall CPI Growth; Lowest Share of Inflation

Since February 2021 (Nov. 2, 2022) .................... 14

Tanya Goldman & David Weil, Who’s Responsible

Here? Establishing Legal Responsibility in the

Fissured Workplace, 42 Berkeley J. Emp. & Lab.

L. 55 (2021) ............................................................ 6

JAMS Comprehensive Arbitration Rules & Procedures, Rules 26, 29 (June 1, 2021) ...................... 18

Laurie Kratky Doré, Public Courts Versus Private

Justice: It’s Time to Let Some Sun Shine in on

Alternative Dispute Resolution, 81 Chi.-Kent L.

Rev. 463 (2006) .................................................... 18

x

Press Release, AG Healey Cites Transportation

Company Nearly $500,000 for Misclassification

and Overtime Violations (Sept. 24, 2018) ........... 21

Press Release, Attorney General Raoul Announces

Settlement with Construction Subcontractors at

Rivian Automotive over Unpaid Overtime Wages

(Dec. 21, 2021) ..................................................... 10

Judith Resnik, The Privatization of Process:

Requiem for and Celebration of the Federal

Rules of Civil Procedure at 75, 162 U. Pa. L.

Rev. 1793 (2014) ............................................ 17, 19

1

INTERESTS OF AMICI CURIAE

Illinois, California, Colorado, the District of Columbia, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania,

Rhode Island, Vermont, and Washington (“amici

States”) submit this brief in support of petitioners to

urge reversal of the court of appeals, which incorrectly

held that the exemption in Section 1 of the Federal

Arbitration Act (“FAA”) for “contracts of employment

of seamen, railroad employees, or any other class of

workers engaged in foreign or interstate commerce,” 9

U.S.C. § 1, applies only to workers employed by a company in the transportation industry.

Amici States have an interest in ensuring that disputes involving transportation workers are resolved

in public and transparent proceedings that allow

States to monitor such disputes and respond as necessary, as opposed to private and confidential arbitration proceedings. The lower court’s narrow reading of

the Section 1 exemption interferes with this interest

because when workers are subject to arbitration

agreements—which typically include confidentiality

provisions—it is more difficult for States to gather information about the pervasiveness of unlawful practices and any potential disruptions to the transport of

goods.

By contrast, the interpretation of the FAA exemption espoused by petitioners—which would cover all

transportation workers, regardless of their industry—

supports the States’ efforts to ensure smooth functioning of commerce within their borders and to protect

their residents from unlawful working conditions. Accordingly, amici States urge the Court to reverse the

2

lower court’s decision holding that only transportation

workers employed by companies in the transportation

industry are exempt from the FAA.

SUMMARY OF ARGUMENT

At issue in this case is whether the FAA requires

transportation workers like petitioners—truck drivers who deliver products from warehouses to retail

stores for a baked-goods company—to raise claims

against their employer in private arbitration proceedings or whether they fall within the scope of the FAA’s

Section 1 exemption for “seamen, railroad employees,

or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. The lower court concluded that petitioners could not avail themselves of

the exemption because the company that employs

them is not in the “transportation industry.” Pet. App.

40a. But as petitioners explain, Pet. Br. 17, 33-34, this

conclusion conflicts with the plain text of the FAA and

this Court’s decision in Southwest Airlines Co. v.

Saxon, 596 U.S. 450 (2022), which expressly rejected

the theory that the Section 1 exemption is tied to any

particular industry. Amici States write separately,

however, to highlight two aspects of this issue that are

directly relevant to their experience and interests.

First, amici States know from their enforcement experience that the addition of a transportation-industry requirement into the FAA’s Section 1 exemption

would undermine Congress’s intent to resolve arbitrability in a summary fashion. As noted, the lower court

here would apply the exemption only in cases where

the company employing the workers at issue is part of

the “transportation industry.” Pet. App. 40a. But to

decide whether such a requirement has been satisfied,

3

and thus whether a complaint must be arbitrated,

courts would be required to determine which entity to

treat as the workers’ employer for purposes of the Section 1 exemption and whether that entity belongs to

the so-called transportation industry. As shown by

amici States’ experience enforcing many labor and

employment laws that call for similar inquiries, answering these questions requires resolving difficult

and time-consuming factual disputes. That is not

what Congress intended when, with the FAA, it directed that arbitrability questions be resolved quickly

so that the parties may turn to the merits.

Second, in amici States’ experience, efficient access

to information involving the transportation of goods

within state borders is critical to ensuring States are

able to monitor the smooth operation of commerce

within their borders and ensure safe and lawful workplace conditions for their residents. These interests

are furthered by allowing transportation workers to

resolve complaints in public proceedings. When workers are subject to the FAA, they must maintain confidentiality and present their claims in private proceedings. If exempted from the FAA, however, workers

may bring their claims in more transparent and public

fora, such as a federal or state court.

For these reasons and those discussed below, amici

States agree with petitioners that the lower court’s decision should be reversed.

4

ARGUMENT

I.

In Amici States’ Experience, A Transportation-Industry Requirement Would Unduly

Complicate The FAA’s Section 1 Exemption

And Delay Resolution Of Arbitrability.

States enforce a wide range of labor and employment protections, including state laws addressing the

timely payment of wages, minimum wage rates, unemployment insurance, employment discrimination,

workers’ compensation, and occupational safety.1

Based on this enforcement experience, amici States

know that the lower court’s transportation-industry

requirement would complicate the FAA’s Section 1 exemption and require a threshold inquiry at the arbitrability stage that is beyond what Congress intended.

Among other questions, courts would need to resolve: (1) which entity to treat as the worker’s employer for FAA purposes; and (2) whether that entity

belongs to the so-called transportation industry. Neither question is factually or legally straightforward.

Accordingly, if this Court were to adopt the lower

See, e.g., Cal. Lab. Code § 200 et seq. (timely wage payment);

820 Ill. Comp. Stat. 115/1 et seq. (same); N.Y. Lab. Law § 190 et

seq. (same); Cal. Lab. Code § 1171 et seq. (minimum wage); 820

Ill. Comp. Stat. 105/1 et seq. (same); Mass. Gen. Laws ch. 151, § 1

et seq. (same); Me. Rev. Stat. tit. 26, § 661 et seq. (same); N.J.

Stat. Ann. § 34:11-56a et seq. (same); 820 Ill. Comp. Stat. 405/100

et seq. (unemployment insurance); Me. Rev. Stat. tit. 26, § 1041

et seq. (same); N.Y. Lab. Law § 500 et seq. (same); Wash. Rev.

Code § 50.01.005 et seq. (same); 775 Ill. Comp. Stat. 5/2-101 et

seq. (employment discrimination); Cal. Lab. Code § 3200 et seq.

(workers’ compensation); 820 Ill. Comp. Stat. 305/1 et seq. (same);

Or. Rev. Stat. § 654.305 et seq. (occupational safety); Wash. Rev.

Code § 49.17.010 et seq. (same).

1

5

court’s rule, courts would be forced to conduct fact-intensive and complex mini-trials on the question of arbitrability before reaching the merits. And such an

approach, as petitioners explain, see Pet. Br. 35-38, is

incompatible with the FAA’s statutory command to resolve arbitrability questions quickly so that the parties may turn to the merits in the proper forum, e.g.,

Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,

460 U.S. 1, 22 (1983) (FAA calls for an “expeditious

and summary hearing, with only restricted inquiry

into factual issues” in order to resolve arbitrability);

Howard v. Ferrellgas Partners, L.P., 748 F.3d 975, 977

(10th Cir. 2014) (FAA directs courts “to decide

quickly—summarily—the proper venue for the case”

so that “the parties can get on with the merits of their

dispute”). This Court should thus reject the lower

court’s addition of a transportation-industry requirement to the FAA’s Section 1 exemption.

A. To assess whether a worker’s employer is

in the “transportation industry,” courts

would need to first engage in significant

factual development to determine the

identity of the employer for purposes of

the FAA.

To start, the lower court’s transportation-industry

requirement would necessitate an initial finding as to

the identity of the worker’s employer for FAA purposes in order to measure whether that employer belongs to the transportation industry. In amici States’

experience, resolving this question often demands significant factual development inappropriate for the

threshold, summary proceedings that Congress envisioned on a motion to compel arbitration. Indeed,

6

there are extraordinary practical difficulties associated with the lower court’s approach.

As an initial matter, administering the lower

court’s standard would prove difficult because there is

no definition of “employer” in the FAA. Nor could

courts borrow the definition of “employer” from the

underlying causes of action, since the FAA can be invoked in cases raising a wide range of federal and

state claims, many of which do not share the same definition of “employer.” See, e.g., Mount Lemmon Fire

Dist. v. Guido, 139 S. Ct. 22, 26-27 (2018) (comparing

and contrasting the definitions of “employer” among

Title VII, the Age Discrimination in Employment Act,

and the Fair Labor Standards Act); Gebser v. Lago

Vista Indep. Sch. Dist., 524 U.S. 274, 283 (1998) (contrasting the definitions of “employer” under Title VII

and Title IX).2 Under such an approach, the scope of

the Section 1 exemption would vary depending on the

happenstance of the claims at issue. In order to apply

a consistent transportation-industry requirement,

then, federal courts would be called upon to develop a

brand-new common law of employer status under the

FAA.

But even if there were a readily available definition

of employer for purposes of the Section 1 exemption,

courts and litigants would still become mired in difficult and fact-intensive questions about the identity of

the worker’s employer. E.g., Frey v. Coleman, 903

2 See generally Tanya Goldman & David Weil, Who’s Responsible

Here? Establishing Legal Responsibility in the Fissured Workplace, 42 Berkeley J. Emp. & Lab. L. 55, 71 (2021) (“To answer

the threshold question of employment, courts have developed

tests for each statute to assess worker-employer relationships.”).

7

F.3d 671, 673 (7th Cir. 2018) (noting in context of employment discrimination action that resolving the

question of who employs a worker, “which seems as

though it ought to be simple on its face, continues to

confound litigants and courts”). Indeed, amici States

often encounter situations with multiple possible employers where identifying the actual employer involves a detailed factual investigation and even litigation. And given the prevalence of complex corporate

structures and alternative work arrangements (such

as with subcontractors or independent contractors),

these issues are arising with more frequency in amici

States’ investigatory and enforcement efforts.3 Based

on this experience—and as evidenced by the complexities in the corporate structure in this case, Pet. Br. 10

n.3—amici States have reason to believe that these issues would also arise under the lower court’s transportation-industry standard.

For example, amici States are often confronted with

situations where there are several entities in a complex corporate structure that could be considered an

employer, an issue that is also likely to arise in the

Section 1 context. In such cases, courts often turn to

the joint employment doctrine, which traces back to

this Court’s decision in Rutherford Food Corp. v.

McComb, 331 U.S. 722 (1947), and calls for a detailed

inquiry into “the circumstances of the whole activity.”

Id. at 730. Although the inquiry varies across jurisdictions, there is agreement that it is “fact intensive.”

Zheng v. Liberty Apparel Co. Inc., 355 F.3d 61, 76 n.13

(2d Cir. 2003); see also, e.g., Hernandez v. Meridian

See Kate Andrias, The New Labor Law, 126 Yale L.J. 2, 28-32

(2016).

3

8

Mgmt. Servs., LLC, 304 Cal. Rptr. 3d 402, 406-407

(Ct. App. 2023); Tolentino v. Starwood Hotels & Resorts Worldwide Inc., 437 S.W.3d 754, 757 (Mo. 2014).

Indeed, the joint employment doctrine typically requires courts and litigants to examine the relationships among all possible employers, including not only

the formal legal relationships but also facts concerning shared management or economic interdependence. See, e.g., Hall v. DIRECTV, LLC, 846 F.3d 757,

770 (4th Cir. 2017); Reyes v. Remington Hybrid Seed

Co., 495 F.3d 403, 408 (7th Cir. 2007).

A labor enforcement action Maine brought against

a complex set of interrelated entities illustrates the

resulting difficulties in identifying a worker’s employer. See Dir. of Bureau of Lab. Standards v.

Cormier, 527 A.2d 1297 (Me. 1987). The relevant

business was an amusement park named Funtown

USA, but as the Maine Supreme Judicial Court summarized, “[t]here is no corporate entity known as Funtown USA.” Id. at 1298. Instead, there was a constellation of corporations and partnerships all controlled

or directed by various members of one family, with the

workers at Funtown USA performing different tasks

for different entities. Ibid. The Maine Bureau of Labor Standards took the case to trial to prove the “intertwined relationships among those entities” in order

to establish joint employment. Ibid. One important

factor was that the entities had “interlocking financial

relationships” that amounted to “guarantees to aid financing” and “indirect subsidies.” Id. at 1299. Needless to say, factual questions about intertwined financial relationships and the particulars of familial control over related entities cannot be quickly evaluated

on a motion to compel arbitration.

9

As another example, many jurisdictions describe

the degree of day-to-day control a business exercises

over the circumstances that gave rise to the alleged

violation as the most important factor to identifying a

worker’s employer. See, e.g., Roberson v. Indus.

Comm’n, 866 N.E.2d 191, 200 (Ill. 2007); White v. W.

Commodities, Inc., 295 N.W.2d 704, 708 (Neb. 1980);

Dep’t of Lab. & Indus. v. Tradesmen Int’l, LLC, 497

P.3d 353, 362 (Wash. 2021). But control can be disputed, especially when more than one entity is involved. And here, too, courts make their assessment

based on the facts on the ground. In Illinois, for example, the inquiry into control “consist[s] of looking at

the actual relationship between the employee and the

employers, including the employers’ ability to exercise

control over the employee either directly or indirectly.” Ill. Admin. Code tit. 56, § 210.115(c); see also

State Comp. Ins. Fund v. Indus. Acc. Comm’n, 158

P.2d 195, 197 (Cal. 1945); Tolentino, 437 S.W.3d at

758-760; Yeatts Whitman v. Polygon Nw. Co., 379 P.3d

445, 451-454 (Or. 2016); Swanson Hay Co. v. State

Emp. Sec. Dep’t, 404 P.3d 517, 538-539 (Wash. Ct.

App. 2017).

Amici States’ enforcement experience again shows

that such assessments often require significant factual development. The New York Department of Labor, for instance, litigated the issue of whether certain

app-based couriers were employees for purposes of unemployment insurance. In re Vega, 149 N.E.3d 401,

403 (N.Y. 2020). The New York Court of Appeals ultimately determined, after a detailed discussion of the

record, that the courier service “exercised control over

its couriers sufficient to render them employees.” Id.

at 405. In reaching this decision, the court considered,

10

among other factors, the parties’ evidence about the

company’s digital platform, how deliveries are assigned to couriers, the compensation structure, and

who bears the loss when customers fail to pay for their

goods. Ibid.

This amount of factual development is not rare. For

example, in a case brought by the Washington Employment Security Department, the Washington

Court of Appeals listed 20 different indicia that may

establish a company’s factual control of the employees. Swanson Hay, 404 P.3d at 538-539. And in a recent investigation undertaken by Illinois, the State

made a finding of joint employment among three different entities building assembly lines based on the

“significant control” exercised by all three.4 Establishing joint control in that investigation required detailed factual investigation, including gathering

sworn testimony from multiple employees at the

worksite.

Finally, in some contexts, courts must assess

whether a parent entity is liable as an alter ego of the

direct employer, also known as piercing the corporate

veil, to determine employer status. See, e.g., Turman

v. Superior Ct. of Orange Cnty., 246 Cal. Rptr. 3d 607,

615 (Ct. App. 2017) (assessing wage claims under the

rubric of alter-ego liability). The factors for piercing

the corporate veil vary from State to State, but typically courts inquire into the control exercised by one

entity over the other and whether that control was

Press Release, Attorney General Raoul Announces Settlement

with Construction Subcontractors at Rivian Automotive over Unpaid Overtime Wages (Dec. 21, 2021), https://bit.ly/3sBuUGa.

4

11

used to perpetrate a fraud or other wrong.5 This again

is a fact-intensive inquiry that must be resolved at

trial if there are plausible allegations of fraud. See,

e.g., Cortlandt St. Recovery Corp. v. Bonderman, 96

N.E.3d 191, 203 (N.Y. 2018); Mgmt. Comm. of Graystone Pines Homeowners Ass’n ex rel. Owners of Condominiums v. Graystone Pines, Inc., 652 P.2d 896, 899

(Utah 1982); Laya v. Erin Homes, Inc., 352 S.E.2d 93,

102 (W. Va. 1986).

These examples, which represent just a fraction of

amici States’ experience in this area, demonstrate

that the lower court’s rule would require courts to resolve complicated and fact-bound questions on a motion to compel arbitration. This result would mire the

parties in litigation on threshold questions, rather

than decide arbitrability in a summary fashion as

Congress intended.

B. Determining whether an employer is part

of the transportation industry would also

introduce complicated factual disputes

into the FAA’s Section 1 exemption.

Even if it were clear which entity to treat as the

employer for purposes of a transportation-industry requirement, there is also no administrable standard for

deciding whether that entity belongs to the transportation industry. The lower court set forth a two-part

test, which it acknowledged did not derive from prior

decisions, that asks whether (1) the industry in question “pegs its charges chiefly to the movement of goods

or passengers,” and (2) the industry’s “predominant

source of commercial revenue is generated by that

5

1 Fletcher Cyclopedia of the Law of Corporations § 41.

12

movement.” Pet. App. 48a. In addition to lacking legal basis, this proposed test would require significant

factual development and be cumbersome for courts to

apply.

Amici States again have pertinent experience in

their capacity as labor enforcers. In addition to those

noted above, another factor that many jurisdictions

use to assess employer status is “the degree to which

the services rendered are an integral part of the putative employer’s business.” Schultz v. Cap. Int’l Sec.,

Inc., 466 F.3d 298, 305 (4th Cir. 2006); see also, e.g.,

Dynamex Operations W. v. Superior Ct., 416 P.3d 1, 37

(Cal. 2018); Legassie v. Bangor Pub. Co., 741 A.2d 442,

446 (Me. 1999); Georgia-Pacific Corp. v. Crosby, 393

So. 2d 1348, 1350 (Miss. 1981); Hargrove v. Sleepy’s,

LLC, 106 A.3d 449, 458 (N.J. 2015). The “integral part

of the business” factor is similar to the lower court’s

proposed “predominant source of revenue” standard in

that both require courts to make factual determinations about the company’s primary lines of business

among the many tasks it performs.

States frequently litigate this inquiry, which the

New Jersey Supreme Court has called “elusive.” Carpet Remnant Warehouse, Inc. v. N.J. Dep’t of Lab., 593

A.2d 1177, 1186 (N.J. 1991). States have argued, for

instance, that nursing is integral to the business of a

health care staffing agency, People ex rel. Dep’t of Lab.

v. MCC Home Health Care, Inc., 790 N.E.2d 38, 47-49

(Ill. App. Ct. 2003); that bookkeeping is integral to the

business of a general contractor, Sinclair Builders,

Inc. v. Unemployment Ins. Comm’n, 73 A.3d 1061,

1068 (Me. 2013); and that secretarial work is integral

to the business of a private investigator, In re Barone,

257 A.D.2d 950, 951 (N.Y. App. Div. 1999). In each

13

case, the employer disputed the evidence and sought

to characterize its line of business more narrowly to

avoid employer status. These disputes, which often

require substantial factual development, would be

commonplace under the lower court’s proposed test.

Amici States also confront questions about a business’s “predominant source of revenue” under their

workers’ compensation laws. Some workers’ compensation statutes limit mandatory coverage to certain

industries or occupations and exclude others.6 As one

example, Illinois law automatically includes transportation work, defined as “[c]arriage by land, water or

aerial service,” but it excludes most agricultural employers. 820 Ill. Comp. Stat. 305/3(3), (19). In Hagemann v. Illinois Workers’ Compensation Commission,

941 N.E.2d 878 (Ill. App. Ct. 2010), the Illinois Appellate Court addressed whether a trucker employed by

a farm to move grain would qualify for automatic coverage under this statute. Id. at 880-881. Although

the farm prevailed before the factfinder based on evidence that trucking provided less than a third of its

business, id. at 880, 882, the court remanded for additional fact-finding about whether trucking was truly

“extraneous” to the farm’s business, id. at 887. These

are the kinds of fact-intensive inquiries that the lower

court’s test would invite.

Finally, the other prong of the lower court’s test—

whether an enterprise “pegs its charges chiefly to the

movement of goods,” Pet. App. 48a—will also engender complicated factual disputes. The price charged

See generally 6 Arthur Larson et al., Larson’s Workers’ Compensation Law §§ 75.01, 77.01.

6

14

for any tangible good is partly attributable to transportation costs.7 The lower court would draw a line at

the point where transportation costs “chiefly” account

for prices. But this question would not be straightforward for courts to answer on a motion to compel arbitration. Beyond the ambiguity of “chiefly,” the extent

to which transportation costs drive prices in any given

case can be challenging to determine.

Here again, amici States’ experience is informative

because the issue of transportation costs arises in diverse areas of law, several of which involve state statutes or enforcement efforts. For instance, the magnitude of transportation costs helps define the geographic market in antitrust law, an issue that often

demands expert economic analysis to resolve. See,

e.g., Fed. Trade Comm’n v. Advoc. Health Care Network, 841 F.3d 460, 468-470 (7th Cir. 2016) (joint state

and federal enforcement action involving geographic

market dispute); Kentucky v. Marathon Petroleum Co.

LP, 464 F. Supp. 3d 880, 891 (W.D. Ky. 2020) (geographic market is “a fact-intensive inquiry” that includes consideration of “transportation costs and challenges such as risk of spoilage, size, or weight”); L.A.

Draper & Son v. Wheelabrator-Frye, Inc., 735 F.2d

414, 425 (11th Cir. 1984) (high relative transport costs

as portion of price limit scope of geographic market).

See Bureau of Transp. Stats., U.S. Dep’t of Transp., Increase in

Transportation Consumer Price Index Accounts for Nearly 27% of

Year-Over-Year Overall CPI Growth; Lowest Share of Inflation

Since February 2021 (Nov. 2, 2022), https://bit.ly/3QRJT7l (price

inflation “includes the transportation costs . . . that manufacturers, wholesalers, and retailers pass onto consumers in the prices

they charge”).

7

15

Likewise, state sales tax codes typically include the

transportation costs of a good in its taxable base, subject to exceptions for shipment by a common carrier.

Greenman’s Trucking, Inc. v. Dep’t of Revenue Servs.,

504 A.2d 568, 569-570 (Conn. App. Ct. 1986). In certain cases, then, States must assess whether the

transportation cost has been factored into the price of

a good, a question that can be difficult to resolve. See,

e.g., Georgia-Pacific Corp. v. State Tax Assessor, 562

A.2d 672, 674 (Me. 1989); Westmoreland Res., Inc. v.

Mont. Dep’t of Revenue, 868 P.2d 592, 597 (Mont.

1994); Affiliated Foods Co-op., Inc. v. State, 611

N.W.2d 105, 109-110 (Neb. 2000); Sharp v. Park ‘N Fly

of Tex., Inc., 969 S.W.2d 572, 575-576 (Tex. App.

1998). For example, in Texas, an airport parking business argued that 70 percent of its revenue derived

from tax-exempt shuttle transportation services unrelated to its core parking business. Sharp, 969 S.W.2d

at 575. The Texas Court of Appeals, after “considering

the totality of the circumstances” including the details

of the business’s public advertisements, concluded

that the transportation portion was also taxable. Id.

at 576.

In short, these examples demonstrate that

whether a price is “peg[ged]” to “the movement of

goods,” Pet. App. 48a, is far from straightforward.

States’ experience once more shows that the lower

court’s transportation-industry test would embroil

courts and parties in complex factual disputes merely

to resolve arbitrability.

16

II. States Have An Interest In Maintaining

Transparent Dispute Resolution Procedures

For All Transportation Workers.

Amici States also know from their experience that

resolving disputes involving transportation workers

in arbitration interferes with their interests in ensuring the smooth operation of commerce within their

borders and protecting their residents from unlawful

working conditions. Whereas arbitration compelled

by the FAA typically occurs in confidential proceedings, dispute resolution proceedings for exempted

transportation workers are conducted in a more transparent and regulated manner. These transparent proceedings serve important state interests by allowing

States to monitor disputes within their borders and

more efficiently perform their investigatory and enforcement duties. The lower court’s interpretation of

the Section 1 exemption, however, would narrow the

class of workers able to pursue remedies through public and transparent processes and limit the amount of

critical information flowing to the States.

A. Unlike typical arbitration proceedings under the FAA, the processes available to exempted transportation workers are transparent.

Determining whether a transportation worker is

exempted from the FAA has significant practical implications, including for States, given the differences

between the nature and purpose of private arbitration

proceedings, on the one hand, and the procedures governing public dispute resolution processes, on the

other. Specifically, the public processes allow States

to better monitor any burgeoning disputes that might

17

disrupt their economies and to perform their investigative and enforcement duties. The confidential nature of private arbitration proceedings, by contrast,

does not serve those interests.

As this Court has explained, “[t]he principal purpose of the FAA is to ensure that private arbitration

agreements are enforced according to their terms.”

AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344

(2011) (cleaned up). In other words, the FAA focuses

on honoring the intent of private parties, and not the

public implications of their agreements. To that end,

parties may agree “to arbitrate according to specific

rules,” ibid., including that “proceedings be kept confidential,” id. at 345, or that they proceed on an individualized, as opposed to a collective, basis, Epic Sys.

Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018).

In fact, “the promise of confidentiality” has become

“a linchpin” of private arbitration’s appeal.8 The leading arbitration associations not only highlight the confidentiality of their services, but also structure their

governing rules to allow parties to elect nearly complete opacity in the proceedings. For instance, the

American Arbitration Association’s commercial arbitration rules—which respondents have selected to

govern their arbitration proceedings, App. 64, 133—

provide that the “arbitrator shall keep confidential all

matters relating to the arbitration or the award” and

“may make orders concerning the confidentiality of

Judith Resnik, The Privatization of Process: Requiem for and

Celebration of the Federal Rules of Civil Procedure at 75, 162 U.

Pa. L. Rev. 1793, 1821 (2014).

8

18

the arbitration proceedings.”9 The JAMS Comprehensive Arbitration Rules contain a similar provision.10 A

JAMS arbitrator has authority to issue orders to protect the confidentiality of sensitive information, sanction parties for violating the rules, and exclude nonparties from hearings.11

In practice, then, “[a]rbitration is frequently conducted pursuant to confidentiality rules and agreements that can conceal the existence and substance of

a dispute, the identities of the parties, and the resolution of the controversy.”12 Indeed, under the arbitration agreement in this case, which would apply to petitioners if they were not exempted by Section 1 of the

FAA, the “arbitration proceedings are to be treated as

confidential,” and no counsel or party may disclose

“the substance of the arbitration proceedings or the

result, except as required by subpoena, court order, or

other legal process.” App. 68, 137.

By contrast, the public dispute resolution procedures for transportation workers exempted from the

FAA are considerably more transparent, and the resulting settlements, judgments, or awards are typi-

Am. Arbitration Ass’n, Commercial Arbitration Rules and Mediation Procedures, Rule 45 (Sept. 1, 2022), https://bit.ly/40FAQuw.

9

JAMS Comprehensive Arbitration Rules & Procedures, Rule

26 (June 1, 2021), https://bit.ly/3ueL6O9.

10

11

Id. at Rules 26, 29.

Laurie Kratky Doré, Public Courts Versus Private Justice: It’s

Time to Let Some Sun Shine in on Alternative Dispute Resolution,

81 Chi.-Kent L. Rev. 463, 466 (2006).

12

19

cally made public. Indeed, many transportation workers, including petitioners, can present their claims directly in state or federal court. See, e.g., Fairbairn v.

United Air Lines, Inc., 250 F.3d 237, 241-242 (4th Cir.

2001). Unlike proceedings under the FAA, court proceedings are typically open to the public, and filings

and decisions are available to all on a public docket.

E.g., Union Oil Co. of Cal. v. Leavell, 220 F.3d 562,

568 (7th Cir. 2000) (“People who want secrecy should

opt for arbitration. When they call on the courts, they

must accept the openness that goes with subsidized

dispute resolution by public (and publicly accountable) officials.”). Any judgments entered are available

for members of the public (and state regulators) to

view, as are transcripts of relevant proceedings and

the court’s reasoning underlying its decision. When a

case settles, the agreements remain accessible “if filed

in court.”13 And even if the agreement itself remains

private, the docket and “court file must remain accessible to the public.” Brown v. Advantage Eng’g, Inc.,

960 F.2d 1013, 1016 (11th Cir. 1992).

B. States are better able to protect their economies and exercise their investigatory and

enforcement powers when transportation

disputes are resolved in a transparent

manner.

The procedures associated with court proceedings

are better suited for transportation disputes than arbitrations conducted pursuant to the FAA, in large

part because of their transparent and public-facing

nature. Disruptions in transportation of goods and

13

Resnik, supra note 8, at 1818.

20

people due to unresolved disputes between employers

and employees have a significant negative impact on

States, their economies, and their residents. E.g.,

Bhd. of R.R. Trainmen v. Jacksonville Terminal Co.,

394 U.S. 369, 381 (1969) (“A strike in one State often

paralyzes transportation in an entire section of the

United States, and transportation labor disputes frequently result in simultaneous work stoppages in

many States.”). States thus have an interest in preparing for any possible disruptions in transportation—regardless of whether the workers are employed

by a company in the so-called transportation industry—which is made more difficult when disputes are

heard in confidential proceedings and resolved by

opaque judgments.

The private nature of arbitration proceedings pursuant to the FAA can also interfere with States’ investigatory and enforcement duties. Courts have long

recognized that the States’ traditional police powers

extend to regulating working conditions. E.g., West

Coast Hotel Co. v. Parrish, 300 U.S. 379, 397-398

(1937). Accordingly, States have not only established

minimum standards on a wide range of working conditions, but also granted state agencies and officials

the authority to investigate and enforce violations of

those standards.14 In many States, the legislature has

E.g., Ala. Code § 25-2-2(a); Ark. Code Ann § 11-2-108(1); Colo.

Rev. Stat. § 8-4-111(1)-(2); Conn. Gen. Stat. § 31-3; Del. Code

Ann. tit. 19, §§ 107, 1111; D.C. Code § 32-1306(a); Ga. Code Ann.

§ 34-2-3(e); Kan. Stat. Ann. § 44-636; Ky. Rev. Stat. Ann.

§ 337.990; Me. Rev. Stat. tit. 26, § 42; Md. Code Ann., Lab. &

Empl. § 3-103; Mass. Gen. Laws ch. 149, § 3; N.H. Rev. Stat. Ann.

§§ 273:9, 275:51(I); N.J. Stat. Ann. § 34:1A-1.12; N.M. Stat. Ann.

§ 50-4-8(A)-(B); N.D. Cent. Code § 34-06-02; Ohio Rev. Code Ann.

14

21

designated multiple agencies or officials as responsible for investigating such violations. In Illinois, for

example, both the Illinois Department of Labor and

the Illinois Attorney General have the power and duty

to investigate potential violations and initiate enforcement actions on behalf of employees and the public.

E.g., 15 Ill. Comp. Stat. 205/6.3(b); 820 Ill. Comp. Stat.

115/11. Similarly, California has vested several agencies with such authority, including a Labor Commissioner tasked with establishing a field enforcement

unit that investigates “industries, occupations, and

areas in which . . . there has been a history of violations.” Cal. Lab. Code § 90.5(a)-(c).

States regularly exercise this authority to investigate and bring enforcement actions against companies

that employ transportation workers. For example, as

noted, supra p. 9, the New York Department of Labor

established in court that app-based delivery drivers

were employees entitled to unemployment insurance

benefits. See In re Vega, 149 N.E.3d at 405. Additionally, the Massachusetts Attorney General obtained

restitution and penalties for 141 employees of a medical transportation business who were misclassified as

independent contractors and deprived of overtime

wages.15 And the New Jersey Department of Labor

and Workforce Development successfully argued that

delivery drivers working for a furniture company were

not exempt from overtime law under an exception for

§ 4111.04(A)-(B); Or. Rev. Stat. § 651.060(1); S.D. Codified Laws

§ 60-5-15; Utah Code Ann. § 34-28-9.

Press Release, AG Healey Cites Transportation Company

Nearly $500,000 for Misclassification and Overtime Violations

(Sept. 24, 2018), https://bit.ly/3vzqfUA.

15

22

“trucking industry employers.” In re Raymour &

Flanigan Furniture, 964 A.2d 830, 841 (N.J. Super.

Ct. App. Div. 2009).

Arbitration agreements enforceable under the FAA

cannot supersede this authority or prevent state investigations into potential violations. E.g., App. 68,

137 (recognizing that the arbitration agreement does

not preclude state or federal enforcement). But the

confidentiality provisions that typically govern arbitration proceedings can make it more difficult for state

investigatory and enforcement bodies to become

aware of potential systemic violations in their States.

Specifically, contractual provisions that require confidentiality affect States’ ability to efficiently conduct

investigations and determine whether enforcement

actions are warranted. As a practical matter, state

agencies are often dependent on constituent complaints, third-party information, and publicly available information when determining whether to open an

investigation into an employer. Accordingly, when

employee complaints, and any resultant awards, are

shrouded in secrecy, it is more challenging for state

agencies to assess whether the purported violations

are occurring on a widespread basis and thus would

warrant an investigation or enforcement action.

When such matters are resolved in public-facing fora,

by contrast, States are better able to track employee

claims, search public databases, and identify troubling trends in workplace conditions.

For these reasons, States have an interest in ensuring that the FAA’s Section 1 exemption covers all

transportation workers without imposing an artificial

transportation-industry requirement. Narrowing the

class of workers who fall within the exemption would

23

not only hinder the States’ ability to monitor disputes

among transportation workers, but also make the

States’ investigatory and enforcement duties more difficult.

CONCLUSION

The decision below should be reversed.

Respectfully submitted,

KWAME RAOUL

Illinois Attorney General

JANE ELINOR NOTZ*

Solicitor General

SARAH A. HUNGER

Deputy Solicitor General

R. HENRY WEAVER

Assistant Attorney General

100 West Randolph Street

Chicago, Illinois 60601

(312) 814-5376

Jane.Notz@ilag.gov

* Counsel of Record

NOVEMBER 2023

ROB BONTA

Attorney General of California

PHILIP J. WEISER

Attorney General of Colorado

BRIAN L. SCHWALB

Attorney General of the District of Columbia

24

AARON M. FREY

Attorney General of Maine

ANTHONY G. BROWN

Attorney General of Maryland

ANDREA JOY CAMPBELL

Attorney General of Massachusetts

DANA NESSEL

Attorney General of Michigan

KEITH ELLISON

Attorney General of Minnesota

MATTHEW J. PLATKIN

Attorney General of New Jersey

LETITIA JAMES

Attorney General of New York

ELLEN F. ROSENBLUM

Attorney General of Oregon

MICHELLE A. HENRY

Attorney General of Pennsylvania

PETER F. NERONHA

Attorney General of Rhode Island

CHARITY R. CLARK

Attorney General of Vermont

ROBERT W. FERGUSON

Attorney General of Washington