Unanimous Supreme Court Affirms Arbitration Exemption for “Last-mile” Drivers

In Flowers Foods, Inc. v. Brock, 608 U.S. ____ (2026), the U.S. Supreme Court unanimously held that local “last-mile” delivery drivers are exempt from mandatory individual arbitration under the Federal Arbitration Act (FAA), even if they do not cross state lines. 

Facts of the Case

The Federal Arbitration Act (FAA) requires courts to enforce many private arbitration agreements, but it also provides that “nothing” in the law shall be used to compel arbitration in disputes involving the “contracts of employment” of any class of workers “engaged in…interstate commerce.” This case centered on whether someone can qualify as a worker under the 9 U.S.C. §1 exemption if he never crosses state lines and never interacts with vehicles that do.

Flowers Foods, Inc., is a large producer of packaged baked goods with bakeries in 19 States. To get its products to market, the company depends in part on franchisees who buy the distribution rights to Flowers’s products in specific geographic territories. Angelo Brock is one such franchisee serving the Denver area; he picks up Flowers’s products from a warehouse in Colorado and delivers them to local stores, all without leaving the State.

In 2022, Brock sued Flowers in federal district court alleging that the company had underpaid him and other distributors in violation of various federal and state laws. Flowers moved to compel arbitration, arguing that the FAA generally requires courts to stay or dismiss cases when the parties have agreed to resolve their disputes by arbitration and that Brock had signed a distribution agreement promising to arbitrate any disagreement.

The district court denied Flowers’s motion, and the Tenth Circuit affirmed. Resting its decision on 9 U.S.C. §1, the Tenth Circuit reasoned that Brock belonged to a class of workers engaged in interstate commerce and thus the court lacked authority to compel arbitration.

Supreme Court’s Decision

The Supreme Court affirmed by a vote of 9-0. According to the Court, aworker who transports goods on an intrastate leg of an interstate journey can qualify for §1’s exemption without crossing state lines or interacting with vehicles that do.

Writing on behalf of the Court, Justice Neil Gorsuch emphasized that the Court has previously rejected attempts to narrow the scope of the interstate transportation exception. It went on to do so again.

Citing the statute’s text, the Court rejected Flower’s invitation to adopt a bright-line rule that a worker can never qualify for § 1’s exemption unless the worker crosses state lines or interacts with vehicles that do.It further noted that interstate commerce includes transporting products “between points in one state and points in another state,” which involves not just crossing state lines, but intrastate activity too.Justice Gorsuch wrote:

Before us, Flowers’s sole theory is that, to be engaged in interstate commerce for purposes of §1, a worker must either cross state lines or interact with a vehicle that does (say, by loading or unloading the goods it carries). That theory is incorrect. We have already held in Saxon that §1 does not require workers to cross state lines. Nor, we now add, does §1 turn on a game of tag with vehicles that do. 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.

The Supreme Court also noted that historical precedent supported its interpretation. For instance, in The Daniel Ball, 10 Wall. 557 (1870), the Court held that a steamer transporting goods entirely within Michigan was “engaged in commerce between the States” because it “was employed in transporting goods destined for other States, or goods brought from without…Michigan.” 

The Court acknowledged that these cases interpreted the Constitution’s Commerce Clause, not §1 of the FAA, and made it clear that it was not suggesting that the scope of §1 is coterminous with the scope of the Commerce Clause as interpreted at the time of the FAA’s adoption in 1925. However, it ultimately found that cases using the same language as §1, or formulations very close to it, offer probative evidence of what an ordinary person at the time of the FAA’s enactment would have understood its terms to mean.