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A worker who monitors the delivery of goods but does not engage in the actual delivery of those goods may still be considered a transportation worker for purposes of the Federal Arbitration Act and, therefore, cannot be compelled to comply with an arbitration agreement, a U.S. District Court in Pennsylvania has ruled in an apparent case of first impression. Relying on precedent from the U.S. Supreme Court and circuit courts from outside jurisdictions, Eastern District Judge Thomas N. O’Neill Jr. said the statute should be read less narrowly than the defendants suggested in Palcko v. Airborne Express Inc. O’Neill also rejected the defendant’s argument that the arbitration agreement the plaintiff signed was subject to mandatory enforcement under state law, concluding the FAA preempts state law. “Congress explicitly exempted a class of workers, those ‘engaged in interstate commerce,’ from a federal law otherwise favoring arbitration,” O’Neill said. “Exempting the plaintiff from arbitration under the FAA, but then requiring that she arbitrate her federal claims in accordance with state laws favoring arbitration would directly conflict with Congress’s express purpose.” According to O’Neill’s opinion, from Airborne Express’s Philadelphia Facility, Margaret Palcko supervised about 30 to 35 drivers who delivered Airborne Express packages throughout the Philadelphia area. Palcko’s job responsibilities included monitoring and improving the drivers’ performance in order to provide timely, efficient package delivery, O’Neill said. When Palcko tried to implement changes to that end, O’Neill said, she was met with resistance from the drivers and their union. O’Neill said that resistance allegedly included false accusations about Palcko’s sexual misconduct, physical intimidation, vandalizing of her car and remarks that women did not belong in the workplace. Palcko made complaints of sexual harassment at a March 5, 2001, management meeting. She claimed Airborne Express did not consider her allegations seriously during the meeting. Palcko did not return to her position of employment after the meeting, O’Neill said. Palcko filed a complaint with the Equal Employment Opportunity Commission, alleging discrimination under Title VII and the Pennsylvania Human Relations Act. She filed her claim under each act in federal court, according to the opinion. Airborne Express responded with a motion to compel arbitration, pursuant to an “agreement to arbitrate claims” Palcko signed when she was hired and under the Federal Arbitration Act. Palcko countered that she fit within an exemption to the FAA, which applies to “the class of workers closely related to the movement of interstate commerce,” O’Neill said. As O’Neill explained, § 1 of the act excludes “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” In order to prevent an overly broad reading of § 1, the U.S. Supreme Court in Circuit City Stores Inc. v. Adams, from 2001, held the statute applies only to workers engaged in the movement of goods as transportation workers, O’Neill said. O’Neill said the primary question was whether Palcko’s employment contract was within the scope of the section. Airborne Express argued Congress did not intend for a plaintiff such as Palcko to be exempted from the FAA because no special statutory dispute resolution applies to such a worker such as Palcko. But O’Neill said that wasn’t so clear. “In Circuit City, the Supreme Court inferred that Congress excluded ‘seamen’ and ‘railroad employees’ to prevent disrupting existing statutory arbitration schemes already in place for those industries,” O’Neill said. “However, decisions by other courts indicate that workers besides those covered under other statutory arbitration statutes are also exempted as long as they are engaged in conduct directly involving the actual transportation or movement of goods.” O’Neill provided two decisions as examples. In Harden v. Roadway Package Systems Inc., from 2001, the 9th Circuit found that a plaintiff who provided a courier service to deliver packages throughout the country was exempted. And in Bacashihua v. United States Postal Service, from 1988, the 6th Circuit found that a parcel post mail distributor who was not even directly involved in delivering packages was exempted. Other circuit courts have also found that the exemption applies to employees who have jobs closely tied to interstate commerce and transportation but who are not actually engaged in the movement of goods, O’Neill said. O’Neill then turned to the facts of Palcko’s case, finding her job was so closely tied to the transportation of goods that she should be considered a transportation worker. “As she oversaw the actual delivery of goods, her role was more akin to that of a truck driver or postal employee than that of a security guard at an airport or a warehouse employee,” O’Neill said. “Although plaintiff did not personally move the goods in interstate commerce, she monitored and ensured the efficient delivery of those goods.”

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