For The Fourth Time In Seven Years, The Supreme Court Expands The Transportation Worker Exemption To The Federal Arbitration Act

On May 28, 2026, in Flowers Foods, Inc. v. Brock, 608 U.S. ___ , the Supreme Court issued a unanimous decision that significantly expanded the scope of the “transportation worker exemption” under the Federal Arbitration Act (FAA). The Supreme Court was asked to decide whether a driver who never crosses state lines or interacts with vehicles that do cross state lines qualifies as a worker in interstate commerce. The Court held that they do. This holding will greatly expand the number of workers exempt from arbitration, most significantly so-called “last mile delivery drivers” who are tasked with delivering interstate goods to their local destinations.

Basic Facts and Premise

Flowers Foods, Inc., maker of the iconic Wonder Bread (among other baked goods), uses independent distributors to deliver their products from warehouses to local retailers. Angelo Brock is a Colorado-based distributor for Flowers Foods. He picks up Flowers’ products from a warehouse in Colorado and delivers them to local stores, all without ever leaving Colorado. After he sued Flowers Foods for wage violations, Flowers Foods moved to compel arbitration under its distribution agreement. Lower courts held that Brock fell within the FAA’s exemption for “workers engaged in interstate commerce,” and therefore could proceed in court, even though no one disputed that he never crossed state lines or interacted with a vehicle that did.

The FAA provides that 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. The FAA exempts certain contracts from its scope, specifically “contracts of employment” for “seamen, railroad employees, [and] any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.

The Supreme Court has greatly expanded this “transportation worker exemption” over the past few years. First, the definition of “contracts of employment” was expanded to include workers classified as independent contractors, not just employees. New Prime Inc. v. Oliveira, 586 U. S. 105 (2019). Second, the class of “workers engaged in interstate commerce” was expanded to include those who load and unload cargo that has already traveled interstate. Southwest Airlines Co. v. Saxon, 596 U. S. 450 (2022). Third, the class of workers was expanded again to include anyone employed in the transportation industry if their work “play[s] a direct and necessary role in the free flow of goods across borders.” Bissonnette v. LePage Bakeries Park St., LLC, 601 U. S. 246 (2024).

In this case, the question was whether anything in the FAA’s text required a transportation worker to cross state lines or to engage with a vehicle that did or imminently would, such as the airplane cargo handlers in Saxon, to qualify as exempt from arbitration under Section 1 of the FAA. The Supreme Court unanimously rejected that premise. Sticking closely to the text of section 1, Justice Gorsuch’s opinion states, “Nothing in those terms requires an individual to cross state lines or interact with a vehicle that does.” Justice Gorsuch went on to bolster the analysis by showing that, in similar analyses, interstate commerce doesn’t always require interstate activity, citing cases that established this point over 150 years ago.

Brock immediately opens up the litigation landscape in favor of transportation workers. Companies that employ or contract with intrastate last-mile delivery drivers (like Brock himself) may see an increase in federal and state cases alleging wage-and-hour violations, including unpaid overtime and worker misclassification. Although existing contracts with arbitration agreements may no longer be applicable, enough open questions remain such that compelling arbitration may still be a cost-effective strategy.

Open Questions Following Brock

Now that Brock has expanded the definition of transportation workers, the main unresolved question is whether the transportation worker has a “contract of employment.” Flowers Foods argued, for example, that it contracted with Brock’s independently operated company under its distribution agreement. Appellate courts are already coming to conflicting determinations. In Fli-Lo Falcon, LLC v. Amazon.com, Inc., 97 F. 4th 1190 (9th Cir. 2024), the Ninth Circuit held the transportation worker exemption does not extend to business entities and commercial contracts, including single-member LLCs, and applies only to contracts with individual people. In Silva v. Schmidt Baking Distribution, LLC, 162 F. 4th 354 (2d Cir. 2025), the Second Circuit reached the opposite conclusion, holding § 1 applicable to certain agreements with “single-employee corporations.” We expect this to be the next major development in the scope of the transportation worker exemption.

In addition, because it was not at issue in Brock, there is an open question whether transportation workers who contract with logistics brokers have a “contract of employment” with the broker, even though the worker does not deliver anything on the broker’s behalf. Logistics brokers are businesses that market, sell, and provide logistical support for the delivery of tangible items by its delivery customers. Oftentimes, workers will sign up with a logistics company that helps them, among other things, receive payments for their services rendered. If the transportation worker is not employed by the logistics broker, the FAA may be a basis to compel arbitration if the worker sues the broker.

Finally, although Brock did not impose any bright-line requirements on interstate contact, the Supreme Court did reaffirm that engaging in interstate commerce requires a “direct, necessary, and active” role in moving goods across borders. Thus, another open question is whether the goods’ interstate journey has ended or, at least, paused long enough to interrupt the continuous flow of goods.

The bottom line is this: Regardless of their level of contact with state borders or vehicles carrying interstate goods, so long as a worker is “directly and necessarily” involved in the free flow of goods across borders, the FAA likely exempts them as a “transportation worker” from mandatory arbitration. The decision shifts the legal test from “Where does the worker operate?” to “Is the worker part of the interstate movement of goods?” Clients are advised to review with counsel their overall role in moving goods through interstate commerce and whether pre-existing arbitration agreements are still viable.

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