On March 25, 2026, the U.S. Supreme Court heard oral argument in Flowers Foods, Inc. v. Brock, a case that could reshape the enforceability of arbitration agreements for delivery drivers, warehouse workers, and other employees across the supply chain. At issue is whether delivery drivers whose routes do not cross state lines may qualify as “workers engaged in foreign or interstate commerce” under Section 1 of the Federal Arbitration Act — and thus fall outside the FAA’s pro-arbitration framework. The Court’s ruling, expected later this year, will provide much-needed clarity on the scope of the FAA’s transportation worker exemption and could have significant practical implications for employers that rely on arbitration agreements with their workforce.
Legal Background
As we have previously written, the Federal Arbitration Act (“FAA”) requires courts to enforce agreements to arbitrate disputes that arise from transactions involving interstate commerce. Passed in 1925, the FAA embodies a liberal federal policy in favor of the enforcement of arbitration agreements. The FAA provides that written arbitration provisions in any contract involving a commercial transaction shall be “valid, irrevocable, and enforceable.” 9 U.S.C. § 2. However, the FAA exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from the Act’s coverage. 9 U.S.C. § 1. This exemption is commonly referred to as the “transportation worker” exemption.
The Supreme Court has previously opined as to the scope of Section 1 of the FAA. In 2001, the Court decided Circuit City Stores, Inc. v. Adams, in which the Court held that the exemption in Section 1 of the FAA is limited to transportation workers. More than two decades later, the Court issued its unanimous decision in Southwest Airlines Co. v. Saxon. In Saxon, the Court held that airline cargo ramp supervisors were exempt from the FAA under the Act’s transportation worker exemption, even when they do not physically accompany cargo across borders. Because the job duties of the cargo ramp supervisors regularly involved loading and unloading cargo that would be transported across state lines, the Court concluded that the employees were exempt from FAA coverage. However, the Court cautioned that the exemption may not apply to workers whose job duties are “further removed from the channels of interstate commerce or the actual crossing of borders.” Thus, following Saxon, the exact extent of the transportation worker exemption remains unsettled.
Facts and Procedural History
Flowers Foods, Inc. is a packaged-bakery-foods company that produces various baked goods that are sold in retail stores throughout the United States. Flowers Foods, Inc. owns various subsidiaries, including Flowers Bakeries, LLC and Flowers Baking Co. of Denver, LLC (“Flowers Denver”). These entities (collectively, “Flowers”) use a “direct-store-delivery” system where independent distributors purchase the rights to distribute Flowers’ products in particular geographic locations, and the distributors also stock shelves, maintain special displays, and develop and maintain customer relationships.
The plaintiff in Flowers, Angelo Brock, owns and operates an independent distributor that contracts with Flowers Denver to deliver baked goods produced out-of-state to retail stores in Colorado. The independent distributor orders products from Flowers Denver or its affiliates, and Mr. Brock picks up the products from a warehouse and loads the products onto his vehicle. Mr. Brock then delivers the products to the various stores that serve as his end customers. Neither Mr. Brock nor anyone he employs cross state lines in connection with the operation of Mr. Brock’s business. The distributor agreement Mr. Brock signed in 2016 to become an independent distributor for Flowers contained a mandatory arbitration provision requiring any claim, dispute, or controversy to be arbitrated exclusively under the FAA.
In September 2022, Mr. Brock filed a class and collective action complaint against Flowers in the United States District Court for the District of Colorado. In his complaint, Mr. Brock alleges that Flowers violates the Fair Labor Standards Act and Colorado law by misclassifying its workers as independent contractors and failing to pay overtime and other wages. Flowers moved to compel arbitration under the FAA, but the District Court denied the motion. The Tenth Circuit Court of Appeals affirmed the District Court’s denial of the motion to compel arbitration, reasoning that Mr. Brock and the workers he seeks to represent are engaged in interstate commerce and they are therefore exempt from the FAA as transportation workers. The Supreme Court granted certiorari on October 20, 2025.
What Happened at Oral Argument — And What It May Signal
The oral argument revealed a Court grappling with where to draw the line between workers who are “engaged in interstate commerce” and those who are not. Flowers urged the Court to adopt a bright-line rule: a delivery driver is engaged in interstate commerce for purposes of Section 1 only if the driver personally crosses a state border or loads or unloads a vehicle that does so. Under this framework, Mr. Brock — who picks up goods from a Colorado warehouse and delivers them to Colorado retail stores — would fall outside the exemption because his work involves only an intrastate leg of the distribution chain. Flowers argued that the interstate journey of its products ends when the goods arrive at the warehouse and are unloaded by someone other than Mr. Brock.
Mr. Brock countered that he is covered by the transportation worker exemption because he transports goods on the last leg of an interstate journey — delivering products that originated out of state to their final commercial destination at retail stores. His counsel argued that last-mile drivers are exempt under the plain text of the FAA, and that Flowers’ proposed bright-line test requiring interaction with a cross-border vehicle has no basis in the statute or case law. Notably, several justices pointed out that Flowers had previously conceded at the class certification stage that Mr. Brock is Flowers’ last-mile driver who delivers products that have traveled across state lines — a concession that appeared to cut against Flowers’ argument that Mr. Brock’s journey is purely intrastate.
The justices wrestled with how the Court’s 2022 decision in Southwest Airlines Co. v. Saxon fits into the analysis. In Saxon, the Court unanimously held that airline cargo ramp supervisors were exempt from the FAA even though they did not personally accompany cargo across state lines — because their job duties involved loading and unloading cargo onto cross-border vehicles. Flowers embraced Saxon but argued it supports a vehicle-focused inquiry: the cargo ramp supervisors were exempt because they interacted directly with a cross-border vehicle, whereas Mr. Brock does not. Justice Jackson questioned whether the analysis should instead focus on the journey of the goods themselves, but Flowers maintained that the text of Section 1 is “dripping with workers’ work and vehicles.”
Several conservative justices expressed skepticism about Mr. Brock’s approach. Justice Alito suggested that under Mr. Brock’s framework, the exemption could sweep far beyond last-mile delivery drivers, observing that “anybody who produces consumer goods intends for the final destination of those goods to be with the consumer.” Justice Gorsuch questioned whether Mr. Brock’s approach would lead to a world “where everything’s relevant and nothing’s dispositive.” And Justice Barrett cautioned that in the modern world with complicated distribution chains, Mr. Brock’s approach would present “very difficult line-drawing questions” for courts. Mr. Brock’s counsel acknowledged that line-drawing challenges may arise but argued they are manageable and that shippers ordinarily know where they sent their goods.
Key Takeaways
The Supreme Court will issue its decision in the Flowers case later this year. Based on the tenor of oral argument, the conservative justices appeared more sympathetic to Flowers’ position and its proposed bright-line rule, while the liberal justices seemed more open to Mr. Brock’s goods-focused approach. Although oral argument is not always a reliable predictor of outcomes, employers have reason to be cautiously optimistic that the Court may narrow the transportation worker exemption — potentially limiting it to workers who personally cross state lines or who load or unload cross-border vehicles.
Whatever the outcome, the ruling will have broad ramifications across industries. If the Court adopts a vehicle-interaction test, the decision could affect not only delivery drivers but also warehouse workers who assist with loading or unloading goods from vehicles that have crossed state lines. Employers in the logistics and distribution space should consider evaluating which employees interact with cross-border vehicles as part of their job duties, as those workers may be more likely to fall within the exemption, and whether operational changes may be desirable or practical to limit the number of workers who could potentially claim exemption from arbitration agreements. Notably, one day after oral arguments were held in Flowers, a New York federal judge ruled that rideshare drivers do not sufficiently engage in interstate commerce under Section 1 of the FAA and are therefore required to arbitrate their claims against Uber — a decision that may foreshadow the direction of the law in this area.
Employers are encouraged to consult their legal counsel to understand the enforceability of existing arbitration agreements with delivery drivers, warehouse workers, and other employees in the supply chain, and to evaluate whether any operational or contractual adjustments should be considered depending on the anticipated ruling.