In 1995, Saint Clair Adams, who was hired as a sales counselor, signed an employment application with Circuit City. A provision in Adams' application required all employment disputes to be settled by arbitration. In 1997, Adams filed an employment discrimination lawsuit against Circuit City in California state court. Circuit City then filed suit in Federal District Court, seeking to enjoin the state-court action and to compel arbitration of Adams' claims under the Federal Arbitration Act (FAA). The District Court entered the requested order. The court concluded that Adams was obligated by the arbitration agreement. In reversing, the Court of Appeals found that the arbitration agreement between Adams and Circuit City was contained in a "contract of employment," and thus not subject to the FAA under section 1 of the Act. Section 1 of the FAA excludes "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce" from the Act's coverage.
Does the Federal Arbitration Act, which excludes "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce" from the Act's coverage, apply to employment contracts?
No. In a 5-4 opinion delivered by Justice Anthony M. Kennedy, the Court held that section 1 exemption is confined to transportation workers. "The wording of [section 1] calls for the application of the maxim ejusdem generis, the statutory canon that 'where general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words,'" wrote Justice Kennedy. Justice Kennedy continued that "[u]nder this rule of construction the residual clause should be read to give effect to the terms 'seamen' and 'railroad employees,' and should itself be controlled and defined by reference to the enumerated categories of workers which are recited just before it; the interpretation of the clause pressed by respondent fails to produce these results." Therefore, section 1 "exempts from the FAA only contracts of employment of transportation workers."
Decisions
Decision: 5 votes for Circuit City, 4 vote(s) against Legal provision: 9 U.S.C. 1
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Full Opinion by Justice Anthony M. Kennedy
