Takeaways
- The Supreme Court declined to create a bright-line rule that automatically exempts transportation workers from the Federal Arbitration Act.
- The decision leaves several important questions unresolved, including how the exemption applies in certain business-to-business delivery relationships.
- Despite early headlines, Flowers Foods does not broadly eliminate arbitration for transportation workers and instead reinforces the need for careful, fact-specific analysis.
On May 28, 2026, the United States Supreme Court issued an opinion in Flowers Foods, Inc. v. Brock, 146 S. Ct. 1358 (2026). The Court held that workers transporting goods within a state’s borders, as part of an “intrastate” journey, could qualify for the exemption in the Federal Arbitration Act for workers engaged in “interstate commerce.” Many news outlets and Plaintiffs’ firms stated that the Flowers opinion was a big win for transportation workers, who may now pursue their claims in court instead of being compelled to arbitrate under the FAA. However, a nuanced review of the unanimous opinion, written by Justice Gorsuch, shows the Court’s refusal to adopt any bright-line rules regarding the exemption is good news for employers with transportation workers.
In Flowers Foods, Brock, a transportation “franchisee,” sued the company alleging that it violated federal and state wage and hour laws. Flowers Foods moved to compel arbitration. The district court denied the motion. The Tenth Circuit affirmed, reasoning that even though Brock did not cross state lines or interact with interstate actors, his “intrastate route formed a constituent part of the… interstate journey.” The Supreme Court granted certiorari to determine whether to establish a bright-line test that the transportation worker exemption to the FAA, otherwise known as Section 1, applies only to workers who cross state lines or interact with vehicles that do. The Supreme Court declined to adopt such a test.
The Supreme Court reasoned that Flowers Foods did not present it with the opportunity to specify the limits of the exemption. Nevertheless, the Court did give some guidance to employers. For example, the Court left unaltered lower court rulings that state that interstate commerce ends when an intrastate actor “takes title” to goods, when they are sold in local stores, and when the product arrives at its intended intrastate destination. It also left open the question of whether business-to-business contracts are outside the scope of Section 1. In addition, the Court cited precedent from the time of the FAA’s adoption to reject the argument that the exemption applies to any worker who delivers products from the manufacturer to the consumer.
Therefore, while plaintiffs’ firms are drawing on the Flowers Foods decision to widen the scope of the Section 1 exemption to the FAA, it must be noted that the Supreme Court affirmed a very detailed Tenth Circuit opinion that clearly demonstrated that Brock’s deliveries “form[ed] the last leg of the products’ continuous interstate route.” As such, there are many factual scenarios where the transportation worker will still be covered by the FAA.
If you have any questions about this decision or the use of mandatory arbitration agreements, please contact the author of this blog or a member of Dykema’s Labor and Employment practice group.