On May 28, 2026, the Supreme Court unanimously held in Flowers Foods, Inc. v. Brock that workers transporting goods within one state’s borders, as part of an interstate journey, qualified for the Federal Arbitration Act’s (FAA) exemption for workers “engaged in … interstate commerce.”  The decision resolved a lingering issue about the scope of the FAA exemption, and clarified that last-mile delivery drivers will, in many cases, not be required to arbitrate claims one-by-one under the FAA.

The FAA was originally enacted in 1925 to clarify procedural rules that apply to business-to-business pre-dispute arbitration provisions. In the last few decades, the Supreme Court issued a series of decisions interpreting the FAA as generally requiring the enforcement of forced arbitration provisions and class action waivers unilaterally drafted and imposed by corporations on workers and consumers. But there is a key exception:  Section 1 of the FAA exempts “contracts of employment” of “any [] class of workers engaged in . . . interstate commerce” from compelled enforcement.

Prior to its decision in Brock, the Court addressed the scope of the Section 1 exemption on several other occasions.  In New Prime Inc. v. Oliveira, 586 U. S. 105 (2019), it held that the exemption of “contracts of employment” was not limited to statutory employees in the modern sense, but included contracts governing independent contractors.  In Southwest Airlines Co. v. Saxon, 596 U. S. 450 (2022), it held that an airline worker who loaded and unloaded cargo was “engaged in . . . interstate commerce” and fell within the Section 1 exemption, even though she did not cross state lines.  Then, in Bissonnette v. LePage Bakeries Park St., LLC, 601 U. S. 246 (2024),  the Court held that transportation workers were not required to work in the “transportation industry” to qualify for the exemption, deciding that the exemption focused on the work performed by the transportation worker, rather than the industry of their employer.

The Flowers Foods Inc. v. Brock Decision

Flowers Foods is one of the largest producers of packaged baked goods in the U.S.  The company is home to many familiar consumer brands, such as Nature’s Own and Tastykake, and produces well-known baked products, including Wonder Bread and Krimpets. Flowers Foods relies on transportation workers characterized as “franchisees” who enter into territory-based distribution agreements with the company to distribute its products throughout the country.

In Brock, Angelo Brock, a worker for Flowers Foods—who the company called a “franchisee”—sued the company in federal court alleging that it had violated federal and state wage laws by underpaying him and other distributors of its baked products.  Mr. Brock drove a truck and delivered Flowers Foods products within the Denver, Colorado area, picking up its products from a Colorado warehouse and delivering them to local stores.

Flowers Foods moved to compel arbitration pursuant to an arbitration provision in the “distribution agreement” Mr. Brock was required to sign with the company.  The district court denied its motion.  The Tenth Circuit affirmed, holding that Mr. Brock fell within the Section 1 exemption.  The Tenth Circuit reasoned that, though Mr. Brock did not cross state lines or interact with interstate actors, his “intrastate route formed a constituent part of the . . . interstate journey.”

Flowers Foods appealed, and the Supreme Court granted certiorari to resolve the question of whether someone could qualify as a worker “engaged in . . . interstate commerce” under Section 1 if they never cross state lines and never interact with vehicles that do. The Court unanimously decided that such workers can qualify for the exemption.

The Court (in a unanimous opinion authored by Justice Gorsuch) recounted its prior decisions on the scope of the Section 1 exemption, noting that its holding in Saxon rendered Flowers Foods’ theory that a worker must cross state lines to be engaged in interstate commerce incorrect.  The Court declined to add a requirement to the exemption that workers must interact with vehicles crossing state lines to be engaged in interstate commerce, determining “at least sometimes, a worker who transports goods on an intrastate leg of an interstate journey can qualify for §1’s exemption without satisfying either of those criteria.”

Reviewing the statutory text, the Court reasoned that the term “interstate commerce” was defined to involve the transportation of goods between points in different states, which also included intrastate activity.  The Court reviewed prior decisions interpreting what it means to be “engaged in interstate commerce,” including under the similar language of the Commerce Clause of the U.S. Constitution, including decisions where the Court found that workers involved in intrastate activity were engaged in interstate commerce.  It determined that these interpretations of the Commerce Clause were “probative evidence of what an ordinary person at the time of the FAA’s enactment would have understood its terms to mean.”  This is significant because there was previously uncertainty about how similar this language was understood, with a number of courts insisting that “engaged in interstate commerce” in the FAA meant something much narrower than the scope of the Interstate Commerce Clause.

In passing, Flowers Foods also argued that the Section 1 exemption should not apply to Mr. Brock because: 1) Flowers Foods’ distribution agreement with Mr. Brock was with an independently operated company he owned, and no “contract of employment” existed to trigger the Section 1 exemption; and 2) Mr. Brock ordered, purchased, and took title to the company’s goods before it sold them to local stores, which some lower courts have found relevant in determining whether the worker was engaged in interstate commerce. The Court did not address these arguments, holding only that it would not adopt the bright-line rule requested by Flowers Foods that individuals can never qualify for Section 1’s exemption unless they cross state lines or interact with vehicles that do.

The Implication of Flowers Foods Inc. v. Brock for Workers

The Brock decision clarifies the broad scope of the FAA’s Section 1 exemption and protects a wider class of transportation workers from forced arbitration.  While Brock solely considered the exemption’s application to last-mile drivers, or drivers involved in the local delivery of goods traveling interstate, it leaves open the possibility that other workers involved in intrastate operations of interstate commerce may also be exempt.

However, the Court’s decision left unresolved Flowers Foods’ other arguments that a distribution agreement with an independently operated company did not qualify as a “contract of employment” and that the passage of title to a distributor operating an intrastate operation may cut off the interstate commerce journey.  That said, in Silva v. Schmidt Baking Distrib., LLC, 162 F.4th 354 (2d Cir. 2025), the Second Circuit has already rejected the argument that the precise form of the contract makes a difference, holding that where the employer had required workers to create LLCs and enter distribution agreements with the employer through the LLCs, those agreements were contracts of employment—and noting that in New Prime the Supreme Court already found that “independent contractor” agreements between an LLC and a company could still be “contracts of employment.”  The Second Circuit highlighted that, notwithstanding that the workers entered agreements with the employer under a business entity, the substance of the agreements were for the performance of work.

Already, workers have drawn on the Brock decision and the Court’s suggestion that these factors may be relevant as supplemental authority in Madero et al. v. McLane Foodservice Inc. et al., before the U.S. Court of Appeals for the Ninth Circuit.  In that case, the employees argue, alternatively, that the Motor Carrier Act exemption of the Fair Labor Standards Act, which allows companies to deny overtime pay to drivers engaged in interstate commerce, does not apply to the intrastate operation of goods involved where title transferred upon delivery of the goods to the warehouse and the termination of the continuous interstate journey, prior to the intrastate journey.

While it remains to be seen how courts will address the questions left open by the Court’s decision in Brock, the opinion is a huge win for numerous workers who may now pursue claims in court, without being compelled to arbitrate under the FAA.