Circuit City Stores, Inc. v. Adams

Supreme Court of the United States · 2001 · Contracts

532 U.S. 105 (2001)

Updated July 26, 2026

ContractsArbitrationEmployment contractsFederal Arbitration ActFAASection 1 exemptionSection 2 coverageemployment arbitration

Facts

In 1995, Saint Clair Adams applied for a job with Circuit City and signed an employment application containing an agreement to arbitrate any claims arising out of his application, employment, or cessation of employment. Adams was hired as a sales counselor at a Circuit City store in California. Two years later, he filed a state-court employment discrimination suit under California's Fair Employment and Housing Act and other California tort theories. Circuit City sought to compel arbitration under the FAA based on the arbitration clause in the employment application.

Issue

Whether § 1 of the Federal Arbitration Act, which excludes from the Act "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce," exempts all employment contracts from the FAA or only employment contracts of transportation workers.

Rule

Section 1 of the FAA must be read narrowly: its exemption for "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce" applies only to employment contracts of transportation workers, not to all employment contracts. In construing § 1, the residual phrase is controlled by the specific categories that precede it under the canon of ejusdem generis, and the phrase "engaged in commerce" has a narrower reach than § 2's phrase "involving commerce."

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Maya Patel works as a floor supervisor at a home-goods retailer in Columbus, Ohio. Her hiring packet with Lakeview Home Centers includes a clause requiring arbitration of all statutory and tort claims arising from her employment, and she later files a state-law discrimination suit in court.

If Lakeview seeks to compel arbitration under the FAA, what is Maya's strongest response under the governing rule?

Explanation. Section 1 is read narrowly. The exemption for contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce is limited to transportation workers, not all employees. A retail floor supervisor is outside that exempted class, so the FAA can apply.