Flowers Foods Gets Another SCOTUS Chance at Limiting the FAA Sec. 1 Arbitration Exemption
The U.S. Supreme Court today agreed to hear the third of the three arbitration cases it had considered taking in the new 2024-2025 term that opened earlier.
In this morning’s order list, the Court granted certiorari on Flowers Foods Inc. v. Brock, No. 24-935. The case presents the issue of whether workers who deliver locally goods that travel in interstate commerce—but who do not transport the goods across borders nor interact with vehicles that cross borders—are transportation workers “engaged in foreign or interstate commerce” for purposes of the Federal Arbitration Act Sec. 1 exemption.
It’s the second time in two years that Thomasville, Ga.-based Flowers Foods--one of the nation's largest baked goods companies and the maker of Wonder Bread--has sought relief in the nation’s top Court for help in enforcing its employment arbitration agreements. Last year, Flowers Foods lost a similar Sec. 1 arbitration case. In that case, the company sought an industry-specific limitation for FAA Sec. 1. Because its delivery drivers were working for a bakery, not a transportation company, Flowers Foods maintained that the Sec. 1 exemption didn’t apply.
But the Supreme Court disagreed. In an opinion authored by Chief Justice John G. Roberts Jr., a unanimous Court held that a transportation worker need not work in the transportation industry to be exempt from coverage under FAA Sec. 1. Bissonnette v. LePage Bakeries Park St. LLC, 601 U.S. 23 (2024) (available at https://bit.ly/4avulyl). See also Lee Williams, “Supreme Court Expands Federal Arbitration Act Exemption from ADR,” CPR Speaks (April 12, 2024) (available at https://bit.ly/41YRmrt).
Today’s cert grant gives Flowers Foods another opportunity to arbitrate employment and wage cases with its workers and contractors. In the lower court opinions at issue here, the company sought to arbitrate a case brought by an independent distributor for Flowers Baking Co. of Denver LLC, who delivered baked goods produced out-of-state to various retail stores solely in Colorado. The case focused on the delivery contractors’ tasks, and how they do them in relation to the U.S. Constitution’s Commerce Clause, rather than the industry classification. For full details on the new case, see Sasha Hill, "A Review: Supreme Court Considers Another FAA Sec. 1 Arbitration Exemption,” CPR Speaks (Sept. 22) (available at https://bit.ly/4gGvh7h).
Flowers Foods seeks to overturn the lower courts’ interpretation of interstate commerce under the Commerce Clause. The lower courts sent the case to trial rather than arbitration, focusing on the goods the individuals deliver rather than the contractors’ location for purposes of determining whether the workers are exempt from arbitrating under the interstate commerce language in FAA Sec. 1. See Brock v. Flowers Foods Inc., No. 23-1182 (10th Cir. Nov. 12, 2024) (available at https://bit.ly/42QO366).
Flowers Foods is the last of three arbitration cases the Court assigned for review to its so-called long conference addressing the summer pileup of cert requests. The Sept. 29 conference, which assessed certiorari requests for the new 2025-2026 Court term that began last Monday, produced an order list dismissing many cases, including a high-profile mass arbitration case that was detailed at. Bryan Ward, “A Review: The Scotus Papers in Live Nation v. Heckman, CPR Speaks (Updated 9/19) (Sept. 17) (available here).
The Court also rejected hearing a South Carolina Supreme Court case that will allow a state law prohibiting limits on filing arbitration claims to stand; the case held that as a public policy matter, the law doesn’t conflict with or violate the Federal Arbitration Act. For details, see Bryan Ward, “A Review: Scotus Weighs Taking a South Carolina Supreme Court Decision on Severability & Arbitration,” CPR Speaks (Sept. 24) (available at https://bit.ly/3WeTRCB).
See also Russ Bleemer, “UPDATED: Scotus’s New Term Won’t Include New Arbitration Cases. But Wait.” CPR Speaks (Oct. 6) (available at https://bit.ly/4qcOQII).
Flowers Foods was on the Sept. 29 conference agenda, but was relisted for discussion last Friday, sparking ADR list serv speculation that the Court was preparing to take the case. The Court will soon announce an argument date, and the case is expected to be heard and decided before the current 2025-2026 term ends in June.
* * *
The author edits Alternatives to the High Cost of Litigation for the CPR Institute.
[END]