On May 28, 2026, a unanimous Supreme Court issued its decision in Flowers Foods, Inc. v. Brock (No. 24-935), significantly broadening the scope of the Section 1…
On May 28, 2026, a unanimous Supreme Court issued its decision in Flowers Foods, Inc. v. Brock (No. 24-935), significantly broadening the scope of the Section 1 transportation-worker exemption under the Federal Arbitration Act (FAA). The Court held that workers who transport goods on an intrastate leg of an interstate journey can qualify for the exemption, even when they do not personally cross state lines or interact with vehicles that do. The ruling marks a meaningful expansion of the category of workers who may fall outside the FAA's reach.
Central to the Court's analysis was its rejection of the bright-line interstate-crossing test that several lower courts had applied. Under that prior approach, workers whose routes remained wholly within a single state were generally treated as ineligible for the Section 1 exemption, regardless of the broader interstate character of the goods they handled. The Court's decision dispenses with that categorical rule and instead recognizes that last-mile drivers and similarly situated personnel can be integral participants in the interstate movement of goods, bringing them within the exemption's protection.
The practical consequence is that a wider universe of delivery, logistics, and last-mile workers may now be able to pursue employment-related claims in court rather than through individual arbitration. For employers that have built dispute-resolution programs around mandatory arbitration agreements, this expanded exemption introduces heightened risk of class and collective litigation, particularly in jurisdictions where state arbitration law does not offer comparable coverage.
Companies that rely on arbitration clauses with delivery, logistics, or last-mile personnel should take this opportunity to reassess their dispute-resolution strategies. Key areas for review include the structure and enforceability of existing arbitration agreements, the classification of workers performing transportation-related functions, and any fallback provisions designating state arbitration statutes. Employers should also consider how the decision may affect pending or anticipated disputes, including motions to compel arbitration that remain unresolved.
This client alert is provided for general informational purposes only and does not constitute legal advice. Clients facing questions about the impact of Flowers Foods v. Brock on their workforce or arbitration programs should consult counsel for advice tailored to their specific circumstances.