Are All Contracts of Employment Exempt from the Provisions of the Federal Arbitration Act - The Supreme Court Settles the Matter

Congress enacted the Federal Arbitration Act (“FAA”) in 1925 to reverse the longstanding hostility of courts toward agreements to arbitrate and to make such agreements specifically enforceable. Section 1 of the FAA exempts the employment contracts of “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from the Act’s coverage. The breadth of that exemption has been an issue with the courts of appeals for the past six decades, with the overwhelming majority of courts holding that Section 1 exempts only the contracts of employment of transportation workers form the FAA. In Craft v. Campbell Soup Co., the Ninth Circuit went against this authority and held that Section 1 excluded all contracts of employment form the terms of the FAA. It applied this holding in Circuit City Stores, Inc. v. Adams, the appeal of which brought the issue to the Supreme Court. Directly considering the issue for the first time, a divided Court agreed with eh majority of the courts of appeals and held that Section 1 excludes only the employment contracts of transportation workers. This Note argues that any ambiguity in the language of the exemption is only the result of the Court’s expansion of Congress’ Commerce Clause power, and that, faced with two arguably valid approaches, the Court chose the approach most consistent with its recent jurisprudence and which is potentially of benefit to both employers and employees