Nothing in the terms of Section 1 requires an individual to cross state lines or interact with a vehicle that does.
A unanimous U.S. Supreme Court ruled that a bakery employer incorrectly asserted that, in order for one of its distributors to qualify for the Federal Arbitration Act’s Section 1 interstate commerce exemption, the worker must either cross state lines or interact with a vehicle that does. Section 1 “exempts from the FAA contracts of employment of transportation workers.” Here, the Court rejected the employer’s brightline rule that an individual can never qualify for Section 1’s exemption unless he or she crosses state lines or interacts with vehicles that do. Accordingly, the Court affirmed the judgment of the Tenth Circuit (Flowers Foods, Inc. v. Brock, No. 24-935 (May 28, 2026)).
Flowers Foods, Inc., is one of the nation’s largest producers of packaged baked goods. From its bakeries in 19 states, Flowers distributes its products across the country.
Distribution agreement. To get its products to market, the company depends in part on distributors who “buy the rights to distribute Flowers[’s] products in particular geographic territories.” For instance, the distributor in this instance, who served the Denver area, picks up the employer’s products from a warehouse in Colorado and delivers them to local stores, all without leaving the state.
In 2022, the distributor sued Flowers in federal district court alleging that the company had underpaid him and other...
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