On May 28, 2026, the United States Supreme Court issued a unanimous decision in Flowers Foods v. Brock that significantly broadens the scope of workers who fall outside the reach of the Federal Arbitration Act (FAA). The Court held that a worker transporting goods on an intrastate leg of an interstate journey can qualify for the Section 1 exemption from the FAA, even if that worker does not personally cross state lines. The ruling marks a notable shift in how courts will evaluate arbitration agreements covering transportation workers and signals a more expansive reading of the statutory exemption than many employers had anticipated.
At issue was whether the FAA's exemption for contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce reaches workers whose own routes remain within a single state. The Court rejected the bright-line, geographic test advanced by Flowers Foods, which would have limited the exemption to workers who themselves traverse state lines. Instead, the Court endorsed a functional approach that focuses on the worker's role in the broader stream of interstate commerce, rather than on the individual worker's physical movements.
The practical implications for employers are substantial. Companies that rely on arbitration agreements with last-mile delivery drivers, distributors, and other intrastate transportation workers must now reassess the enforceability of those agreements. A broader class of workers may be positioned to litigate wage-and-hour, misclassification, and other employment-related claims in court, rather than through arbitration. Class and collective action exposure may also increase, as workers previously bound to individual arbitration may now pursue aggregated claims in judicial forums.
Employers in the trucking, food distribution, e-commerce, and logistics sectors should review their current arbitration agreements, classification practices, and dispute resolution strategies in light of the Brock decision. Consideration should be given to alternative contractual mechanisms, including state-law arbitration provisions where appropriate, as well as proactive evaluation of underlying employment classifications and policies that may be tested in litigation going forward.
This alert is provided for general informational purposes only and does not constitute legal advice. Clients facing specific questions about the impact of Flowers Foods v. Brock on their arbitration programs or workforce arrangements should consult with counsel for tailored guidance.