In a unanimous decision issued on May 28, 2026, the U.S. Supreme Court ruled in Flowers Foods, Inc. v. Brock on the scope of the transportation worker exemption under the Federal Arbitration Act (FAA).
Justice Neil Gorsuch authored the opinion, which held that a worker who never crosses state lines can still qualify as a worker engaged in interstate commerce.
The ruling is the Court’s fourth decision in recent years interpreting the Section 1 exemption, and each time the Court has sided with workers seeking to avoid arbitration.
The plaintiff, Angelo Brock, worked as an independent distributor, picking up Flowers Foods products from a Colorado warehouse and delivering them to local retailers without crossing any state border.
When Flowers Foods sought to enforce an arbitration clause in its distribution agreement, Brock argued that Section 1 of the FAA exempted his contract from the statute’s coverage.
Lower courts agreed with Brock’s position, and the Supreme Court unanimously affirmed those rulings, cementing a broader interpretation of what it means to be engaged in interstate commerce.
The Court held that what matters is whether a worker plays a direct, active, and necessary role in an interstate journey of goods, even if that individual’s work is confined entirely to one state.
The Court grounded its analysis in the plain text of the FAA and in longstanding precedent interpreting Commerce Clause language dating back more than 150 years.
Taken together with prior decisions, including New Prime Inc. v. Oliveira, Southwest Airlines Co. v. Saxon, and Bissonnette v. LePage Bakeries Park St., LLC, the ruling may support a broader application of the exemption across many industries.
Workers who may now fall within the exemption include last-mile delivery drivers, local warehouse workers moving goods destined for out-of-state customers, and others in similar supply chain roles.
The Court did not resolve whether features of a distributor-style relationship, such as taking title to goods or purchasing products for resale, might place a worker outside the exemption’s scope.
Employers should not assume that structuring a relationship in those ways automatically insulates them from the exemption’s reach, and reviewing specific arrangements may be advisable.
The FAA exemption does not necessarily render arbitration unavailable altogether, as some states maintain their own arbitration statutes that may not carry the same transportation worker exemption.
Whether state arbitration law provides a viable alternative will depend on the specific agreement, the governing law clause, and the applicable state statute in each case.
Businesses using arbitration agreements with workers involved in product distribution, delivery, or supply chain operations may wish to examine existing contracts in light of this ruling.
A proactive approach to arbitration agreement drafting and worker classification is advisable rather than relying on assumptions about what the FAA covers going forward.