No Limit: The Supreme Court Rejects Narrowing the FAA Sec. 1 Arbitration Exemption

This morning, in Flowers Foods Inc. v. Brock, 24-935 (May 28), the U.S. Supreme Court clarified whether the Federal Arbitration Act Sec. 1 transportation-worker exemption from the ADR process applies to last-mile delivery drivers who transport goods locally after those goods have moved in interstate commerce.

The unanimous 9-0 opinion by Justice Neil Gorsuch left little doubt: The Court held that these drivers can qualify for Sec. 1’s exemption from arbitration when they transport goods on the intrastate leg of an interstate journey.

Gorsuch wrote, “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.”

The franchisee-driver who filed suit under federal and state laws for unpaid wages against the national bakery, which produces Wonder Bread, will be able to take his pay claims to court. 

The case is Flowers Foods' second Supreme Court loss in two years for its attempts to narrow the FAA Sec. 1 exemption from arbitration so it could use the ADR process in matters with its workforce and contractors. Before rejecting today’s location-centric focus, the nation’s top Court declined to limit the exemption to the transportation industry, holding instead that the bakery industry workers’ duties were the test of FAA Sec. 1 exemption applicability. Bissonnette v. LePage Bakeries Park St. LLC, 601 U.S. 246 (2024) (available at https://bit.ly/4txWaA7);

CPR Speaks previously reported on the Flowers Foods v. Brock March 25 oral argument, available here, and on the amici briefs filed by both parties, available here (in support of limiting the exemption) and here (in support of the exemption). CPR Speaks also covered Flowers Foods when the case was under consideration for Supreme Court review, here; when the Court granted certiorari, here; and in connection with a March 27 CPR Institute YouTube panel discussion, here.

The case reached the Supreme Court amid a broader wave of litigation over the FAA Sec. 1 transportation-worker exemption and its application to modern supply chains. The Tenth U.S. Circuit Court of Appeals deepened a circuit split by holding that last-mile delivery drivers such as Brock were engaged in interstate commerce, while the Fifth and Eleventh Circuits had resolved similar questions the other way.

At oral argument, Flowers Foods asked the Supreme Court to adopt a bright-line rule under which FAA Sec. 1 would apply only when the driver personally crosses state borders or directly interacts with vehicles carrying goods across borders. Flowers Foods maintained that Brock performed local, intrastate delivery work because he loaded and unloaded goods only for deliveries within Colorado. Justice Ketanji Brown Jackson pushed back by questioning whether that approach placed too much emphasis on the drivers’ exact role in the delivery chain and too little on the continuous movement of the goods through interstate commerce.

Justice Gorsuch picked up on that reasoning with his characteristic plain reading of the statute in today’s decision. “Start with the statutory text,” he wrote, explaining, “Section 1’s exemption applies to 'workers engaged in . . . interstate commerce.' When the FAA was enacted, to 'engage' meant to 'take part in'  something or to be 'employ[ed]' or 'involve[d]' in that thing.  . . . Nothing in those terms requires an individual to cross state lines or interact with a vehicle that does. Interstate commerce includes transporting products 'between points in one state and points in another state.' That involves not just crossing state lines, but intrastate activity too.” (Five law dictionary citations in the opinion are omitted.)

Gorsuch then addressed Flowers Foods’ response to that textual problem, which is that cases interpreting similar language arose under the Constitution’s Commerce Clause, not FAA Sec. 1. Gorsuch acknowledged that distinction, but explained that such cases still “offer probative evidence of what an ordinary person at the time of the FAA’s enactment would have understood its terms to mean.”

Gorsuch also left a sliver of an opening for future FAA Sec. 1 challenges. The opinion declined to resolve additional arguments that Flowers Foods raised, including that Brock fell outside the exemption because he operated through an independently owned company and because he purchased and took title to the goods before reselling them locally. As Gorsuch explains:

“The trouble is that, while Flowers discusses these facts in passing, it does not ask us to decide their legal significance. Instead, it ventures all upon one cast, asking us to adopt a bright-line rule that an individual can never qualify for §1’s exemption unless he crosses state lines or interacts with vehicles that do. And whatever other limits §1 may or may not contain, we do not see how the statutory text can support that one.”

So, while the decision resolves the last-mile driver question, it appears to leave open for future cases whether other features of modern supply chains, such as independently operated company status, title passage, or resale, may limit FAA Sec. 1’s reach.

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The author, who completed her first year at the Northeastern University School of Law in Boston, is a 2026 CPR summer intern.

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