On May 28, 2026, the United States Supreme Court issued a unanimous decision in Flowers Foods, Inc. v. Brock, fundamentally expanding the Federal Arbitration Act’s transportation worker exemption. Justice Neil Gorsuch authored the eight-page opinion that affirmed the Tenth Circuit’s ruling and rejected efforts by Flowers Foods to establish a bright-line rule requiring workers to cross state lines or interact with interstate vehicles to qualify for the exemption.

The case centered on Angelo Brock, a Denver-based delivery franchisee who transported Flowers Foods products exclusively within Colorado. Brock filed a putative class and collective action in federal district court in 2022, alleging the company underpaid him and other distributors in violation of the Fair Labor Standards Act and state laws.

Flowers Foods moved to compel arbitration under the terms of Brock’s distribution agreement. The district court denied that motion, citing Section 1 of the Federal Arbitration Act, which exempts ‘contracts of employment’ of workers ‘engaged in interstate commerce’ from mandatory arbitration.

Supreme Court Affirms Tenth Circuit Decision

The Supreme Court granted certiorari to answer a single question: whether a worker can qualify as ‘engaged in interstate commerce’ under Section 1 of the Federal Arbitration Act without crossing state lines or interacting with vehicles that do.

Justice Gorsuch’s opinion examined the statutory text, noting that when the FAA was enacted in 1925, ‘engage’ meant to ‘take part in’ or be ’employed’ or ‘involved’ in something. The Court referenced Black’s Law Dictionary’s 1933 definition of ‘interstate commerce’ as including “the transportation of persons or property between or among the several states or from or between points in one state and points in another state.”

Nothing in those terms requires crossing state lines physically, the Court concluded.

The opinion cited historical precedent from The Daniel Ball, an 1871 case where a steamer operating entirely within Michigan was deemed engaged in interstate commerce because it transported goods destined for other states. The Supreme Court explained that “several different and independent agencies” can participate in interstate commerce, ‘some acting entirely in one State.’

The Court also referenced Rearick v. Pennsylvania (1906), where a Pennsylvania salesman delivering goods shipped from out of state was held to be ‘engaged in interstate commerce’ despite never leaving the state.

Flowers Foods Argument Rejected

Flowers Foods argued that prior Supreme Court precedents establishing transportation worker exemptions were based on the Constitution’s Commerce Clause rather than the FAA’s statutory language. The Court acknowledged this distinction but found those cases ‘probative evidence’ of what ordinary people understood the terms to mean when the FAA was enacted.

The company also hinted at other grounds for excluding Brock from the exemption. Flowers Foods noted that Brock operates an independently owned company, orders and purchases goods before taking title, then resells them to local stores. Some lower courts have considered these factors relevant when determining whether a ‘contract of employment’ exists under Section 1.

However, the Supreme Court observed that Flowers Foods did not formally ask the Court to decide the legal significance of those facts. Instead, the company ‘ventures all upon one cast’ by requesting a bright-line rule based solely on crossing state lines or touching interstate vehicles.

That request was unanimously denied.

Winners and Losers After the Ruling

The decision represents a clear victory for workers in the logistics and transportation industries. Companies can no longer automatically compel arbitration simply because their delivery workers operate within a single state.

Flowers Foods and similar employers face significantly weakened arbitration defenses in class and collective actions. The transportation worker exemption now applies broadly to intrastate delivery workers who handle goods that originated in or are destined for other states, even if those workers never personally cross borders.

Legal observers at Duane Morris noted the ruling “further expands the FAA exemption for transportation workers seeking to bypass arbitration’ and predicted ‘a new wave of class actions is likely headed” for logistics organizations.

The decision builds on three recent Supreme Court rulings that progressively expanded Section 1 protections. In New Prime Inc. v. Oliveira (2019), the Court held the exemption covers independent contractors, not just employees. Southwest Airlines Co. v. Saxon (2022) extended the exemption to an airline cargo worker who never crossed state lines. Bissonnette v. LePage Bakeries Park Street, LLC (2024) clarified that workers in any industry can qualify if they “play a direct and necessary role in the free flow of goods across borders.”

The Supreme Court’s latest ruling in arbitration cases follows a broader pattern of the Court examining federal regulatory authority and employment relationships, as seen in recent decisions supporting SEC and FCC enforcement powers.

Undecided Issues Remain

Despite the unanimous outcome, the Supreme Court explicitly left several critical questions unanswered. The opinion notes that Flowers Foods ‘does not ask the Court to decide’ the legal significance of Brock operating through an independently owned company or taking title to goods before reselling them.

These unresolved issues have already created circuit splits among federal appeals courts. The Ninth Circuit held in Fli-Lo Falcon, LLC v. Amazon.com, Inc. (2024) that Section 1 does not apply to contracts ‘between two business entities.’ By contrast, the Second Circuit ruled in Silva v. Schmidt Baking Distribution, LLC (2025) that certain agreements with ‘single-employee corporations’ do trigger the exemption.

Whether goods have reached their ‘intended destination’ under an interstate contract also remains contested. The Ninth Circuit considered this factor relevant in Rittmann v. Amazon.com, Inc. (2020). The First Circuit held in Immediato v. Postmates, Inc. (2022) that intrastate couriers fulfilling take-out orders made within the state are not engaged in interstate commerce.

The Supreme Court declined to establish how attenuated a worker’s role can be from interstate commerce while still qualifying for the exemption. Justice Gorsuch wrote that the opinion “does not opine on whether a worker could be so attenuated from interstate commerce that they fall outside the scope of the exemption.”

Corporate counsel must now navigate this gray area without clear guidance. As noted by attorneys at Duane Morris Class Action Defense Blog, “some arbitration agreements may be enforceable under state law and, therefore, the choice of law provisions in those agreements will likely be the difference maker.”

Implications for Logistics and Transportation Employers

Companies employing delivery drivers face immediate pressure to reassess their arbitration programs. The Supreme Court’s rejection of the ‘cross-or-tag’ rule means thousands of intrastate delivery workers who previously could have been compelled to arbitrate now have access to federal court class actions.

The decision particularly impacts gig economy platforms and franchise models that rely on independent contractors for final-mile delivery. While the Court did not resolve whether independent business entities fall under Section 1, the ruling makes clear that physical movement across state lines is not dispositive.

Employers must examine whether their products originate from out-of-state facilities. If goods cross state lines at any point before reaching the final consumer, intrastate delivery workers handling those goods likely qualify for the arbitration exemption under Flowers Foods v. Brock.

The opinion also creates strategic considerations around warehouse and distribution center locations. Companies cannot insulate themselves from the exemption simply by employing separate drivers for interstate transport and final-mile delivery.

Choice of law provisions in distribution agreements gain heightened importance. Some state arbitration laws may provide enforcement mechanisms unavailable under the FAA, though those provisions must be carefully drafted to withstand scrutiny after this ruling.

The broader implications extend beyond transportation to any industry where goods cross state lines before final delivery. Food service, retail distribution, and e-commerce fulfillment operations all face potential exposure to class litigation from workers who previously were bound to arbitration.

Justice Gorsuch emphasized that workers must still play a ‘direct,’ ‘necessary,’ and ‘active’ role in moving goods across borders to qualify for the exemption. This language preserves some limits, but the Court provided little practical guidance on applying those standards to specific fact patterns.

The unanimous nature of the decision signals strong Supreme Court consensus on reading Section 1 broadly to protect transportation workers. This continues a trend visible in other recent Supreme Court employment cases where the Court has favored worker protections over employer arbitration agreements.

Frequently Asked Questions

What is the Federal Arbitration Act transportation worker exemption?

Section 1 of the Federal Arbitration Act exempts ‘contracts of employment’ of workers ‘engaged in interstate commerce’ from mandatory arbitration. This means transportation workers covered by the exemption can file lawsuits in court rather than being forced into arbitration, even if they signed arbitration agreements. The Supreme Court has interpreted this exemption broadly to include not just employees but also independent contractors who play a direct, necessary, and active role in moving goods across state lines.

Does a delivery driver need to cross state lines to qualify for the arbitration exemption?

No. The Supreme Court unanimously held in Flowers Foods v. Brock that workers do not need to physically cross state lines or interact with vehicles that do to qualify for the Federal Arbitration Act exemption. A driver who handles goods on an intrastate portion of an interstate journey can qualify for the exemption. For example, a Colorado driver delivering products that were manufactured in another state can be engaged in interstate commerce even though the driver never leaves Colorado.

What issues did the Supreme Court leave unresolved in Flowers Foods v. Brock?

The Court explicitly declined to decide whether workers who operate through independent companies or who take title to goods before reselling them qualify for the exemption. Federal appeals courts remain split on these questions, with some circuits holding that contracts between business entities fall outside Section 1 while others find the exemption applies to single-employee corporations. The Supreme Court also did not clarify how attenuated a worker’s connection to interstate commerce can be while still triggering the exemption.

Conclusion

Flowers Foods v. Brock marks the fourth Supreme Court decision in six years expanding protections for transportation workers against mandatory arbitration. The unanimous opinion eliminates any bright-line rule based on crossing state lines and establishes that participation in an interstate journey, even on an entirely intrastate leg, can trigger the Federal Arbitration Act exemption.

The decision creates immediate challenges for logistics companies and delivery-based businesses that relied on arbitration agreements to prevent class actions. While several critical issues remain unresolved, the trajectory of Supreme Court precedent clearly favors broad interpretation of worker protections under Section 1.

Employers in transportation and adjacent industries face a narrowing window to enforce arbitration agreements. Corporate counsel should conduct immediate reviews of their driver classification models, distribution agreements, and choice of law provisions to identify exposure to class litigation under this expanded exemption standard.