On May 28, 2026, the United States Supreme Court issued a unanimous decision in Flowers Foods, Inc. v. Brock, No. 24-935, that meaningfully expands the reach of the Federal Arbitration Act's Section 1 transportation worker exemption. The Court held that a worker transporting goods on an intrastate leg of a larger interstate journey may qualify for the exemption, even where that worker does not personally cross state lines or operate vehicles that do. The ruling allows the plaintiff's Fair Labor Standards Act misclassification claim to proceed in court rather than in arbitration, and it signals a notable shift in how courts will evaluate arbitration agreements with last-mile and intrastate delivery drivers.
Writing for the Court, Justice Gorsuch rejected the bright-line interstate-travel requirement that several lower courts had adopted in recent years. Under that prior approach, a worker generally needed to physically move across state borders to invoke the Section 1 exemption. The Court's opinion makes clear that the proper inquiry focuses on the worker's role within the flow of interstate commerce, not on the geographic boundaries of any single delivery route. As a result, a broader class of workersΓÇöparticularly those handling the final leg of goods that originated out of stateΓÇömay now be positioned to litigate, rather than arbitrate, their employment disputes.
The practical implications for employers are significant. Companies in trucking, logistics, food distribution, and gig-economy delivery should anticipate increased challenges to existing arbitration agreements with last-mile drivers and similarly situated workers. Arbitration clauses that were previously considered enforceable may no longer compel arbitration following Flowers Foods. Employers should also revisit independent contractor classifications, particularly where misclassification exposure under the FLSA or analogous state wage-and-hour laws is a concern, because such claims may now more readily proceed in a judicial forum.
Recommended next steps include a careful audit of workforce classifications, a review of arbitration provisions used with drivers and delivery personnel, and consideration of alternative dispute resolution structures that account for the Court's expanded reading of Section 1. Documentation of the interstate nature of operations, and the worker's relationship to that flow of commerce, will likely take on heightened importance in future enforceability disputes.
This article is provided for general informational purposes only and does not constitute legal advice. Clients facing specific questions about arbitration agreements or worker classification should consult counsel for guidance tailored to their circumstances.