NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS SEP 11 2024

FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

DEJA NAIR, No. 23-15582

Plaintiff-Appellee, D.C. No. 2:22-cv-00331-DAD-JDP v.

MEDLINE INDUSTRIES, LP, FKA MEMORANDUM*

Medline Industries, Inc.; MEDLINE INDUSTRIES HOLDINGS, LP, A Delaware Limited Partnership,

Defendants-Appellants.

Appeal from the United States District Court for the Eastern District of California Dale A. Drozd, District Judge, Presiding

Argued and Submitted July 29, 2024 San Francisco, California

Before: R. NELSON, FORREST, and SANCHEZ, Circuit Judges. Concurrence by Judge R. NELSON.

Medline Industries, Inc., Medline Industries Holdings, LP, and Medline

Industries, LP (collectively, Medline) appeal the district court’s order denying its

motion to compel arbitration of Deja Nair’s individual employment claims and to

dismiss Nair’s non-individual claims related to her position as a Warehouse

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Operator at Medline’s warehouse in Tracy, California. We review the district

court’s decision to grant or deny a motion to compel arbitration de novo. Stover v.

Experian Holdings, Inc., 978 F.3d 1082, 1085 (9th Cir. 2020). We review “the

validity and scope of an arbitration clause de novo and the factual findings

underlying the district court’s decision for clear error.” Knutson v. Sirius XM

Radio Inc., 771 F.3d 559, 564 (9th Cir. 2014) (internal quotation marks and

citation omitted). We have jurisdiction under 9 U.S.C. § 16(a)(1)(B), and we

affirm.

Under the Federal Arbitration Act (FAA), arbitration agreements “shall be

valid, irrevocable, and enforceable, save upon such grounds as exist at law or in

equity for the revocation of any contract.” 9 U.S.C. § 2. However, § 1 exempts

from the FAA employment contracts of “seamen, railroad employees, or any other

class of workers engaged in foreign or interstate commerce.” Id. § 1. To

determine if a contract is exempt from arbitration under § 1, we first define the

“class of workers” to which the plaintiff belongs, and then determine if that class

of workers is engaged in foreign or interstate commerce. Sw. Airlines Co. v.

Saxon, 596 U.S. 450, 455 (2022); see Ortiz v. Randstad Inhouse Servs., LLC, 95

F.4th 1152, 1159–60 (9th Cir. 2024) (describing and applying the two-step

analysis). The Supreme Court recently clarified that Medline itself does not need

to be in the transportation industry for the transportation exemption to apply.

2 Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 252 (2024). Rather,

Nair is “a member of a ‘class of workers’ based on what she does at [Medline], not

what [Medline] does generally.” Saxon, 596 U.S. at 456.

The district court did not err in finding that Nair is exempt under § 1 of the

FAA. Nair belongs to a class of workers who frequently package, move, load,

unload, and ship medical supplies at Medline’s warehouses for delivery to

interstate customers. See id. at 455–59. Although the district court should not

have considered the “Dealer Drop Ship Program” in the absence of any evidence

that the program existed at the time of Nair’s employment, there was more than

sufficient evidence elsewhere in the record to support the district court’s finding

that Nair belongs to a class of warehouse operator workers who were engaged in

interstate commerce.

Nair alleged in her declaration that she worked every day in the “shipping

dock” where she “spent 100% of [her] time stacking pallets and wrapping them in

saran wrap to load onto trucks.” She alleged that she loaded the delivery trucks

every day with pallets that were prepared “for shipping to destinations in and

outside of California,” including to Reno, Nevada. On one occasion, she spoke to

a truck driver who informed Nair that he traveled daily from the Tracy, California

warehouse to Reno, Nevada to make his Medline deliveries. As a new employee,

Nair watched “training videos [that] explained how [Medline] ships medical

3 supplies throughout the country, and how [Medline] expected warehouse operators

like [Nair] to ship and pack medical supplies for transport to various destinations

throughout the United States.” The training showed a map of the United States

indicating several of Medline’s distribution centers are located outside of

California.

Medline argues that Nair has not proffered sufficient evidence that she

handled goods that moved in interstate commerce, but it does not contest Nair’s

description of her role at the company or offer evidence to rebut it. See Lopez v.

Aircraft Serv. Int’l, Inc., 107 F.4th 1096, 1098 (9th Cir. July 19, 2024) (noting that

the “district court observed that [the employer] did not contest [the employee’s]

description of his work [as an airplane fuel technician], or offer additional evidence

about the nature of that work” as stated in the employee’s declaration) (internal

quotation marks omitted). On the contrary, Medline acknowledges that it

manufactures only around 80,000 of the 500,000 products it provides to its

customers. Before the district court, Medline conceded that it “provides its clients

with medical supplies, equipment, and health services distributed all over the

nation and internationally.” Medline acknowledged that Warehouse Operators like

Nair “might load pallets onto a trailer for shipment or unload pallets from a trailer

with incoming merchandise.” In its totality, this evidence is sufficient to indicate

4 that Nair “play[ed] a tangible and meaningful role in [the] progress [of Medline’s

goods] through the channels of interstate commerce.” Ortiz, 95 F.4th at 1160.

Because she packaged and loaded goods that traveled in interstate

commerce, Nair falls within a class of worker that “at least play[s] a direct and

necessary role in the free flow of goods across borders.” Saxon, 596 U.S. at 458

(internal quotation marks and citation omitted). Accordingly, the district court did

not err in finding that Nair is part of a class of class of workers engaged in

interstate commerce under § 1 of the FAA, and properly denied Medline’s motion

to compel arbitration.1

AFFIRMED.

1 Because the transportation worker exception applies, we do not address Medline’s remaining arguments on appeal that (1) any remaining issues regarding the enforceability of the arbitration provision, other than the transportation worker exemption, must be decided by the arbitrator pursuant to the agreement’s delegation clause, (2) the class action waiver of the Arbitration Provision is enforceable, and (3) Nair’s representative Private Attorneys General Act (PAGA) claim should be stayed pending arbitration of Nair’s individual claims.

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FILED

Nair v. Medline Industries, L.P., No. 23-15582 SEP 11 2024

MOLLY C. DWYER, CLERK

R. Nelson, Circuit Judge, concurring: U.S. COURT OF APPEALS

I write separately to emphasize that we should exercise caution before

extending some of our precedent. In prior cases, we have considered whether certain

workers are part of an unbroken “stream of commerce” in deciding whether they fall

within the transportation-worker exemption of the Federal Arbitration Act,

9 U.S.C. § 1. See Rittmann v. Amazon.com, Inc., 971 F.3d 904, 916 (9th Cir. 2020)

(citation omitted). To conduct this stream-of-commerce inquiry, we considered

myriad factors, including the perceived “practical, economic continuity in the

generation of goods and services,” id. at 913 (same), as well as considerations such

as where goods “come to rest,” id. at 916.

These judicially created tests risk taking on a life of their own. At bottom,

courts are easily lured by the flexibility of multi-part judicial tests and stray from the

predictable rigidity of the statutory text. Going forward, we should take great care

to reorient our legal analysis of the transportation-worker exemption by hewing to

the statutory text, applying the meaningful-variation and ejusdem generis canons to

determine whether a worker “play[s] a direct and ‘necessary role in the free flow of

goods’ across borders.” Sw. Airlines Co. v. Saxon, 596 U.S. 450, 458 (2022) (quoting

Circuit City Stores v. Adams, 532 U.S. 105, 121 (2001)). I concur because the

majority here faithfully applies this statutory analysis.

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