The U.S. Supreme Court on May 28 unanimously ruled that delivery drivers may qualify for the Federal Arbitration Act’s (FAA’s) transportation-worker exemption even if they never cross state lines themselves, a decision that could limit employers’ ability to enforce arbitration agreements in portions of the logistics and delivery economy.
In Flowers Foods, Inc. v. Brock, the justices held that workers transporting goods during an intrastate leg of a broader interstate journey can still be considered workers “engaged in interstate commerce” under Section 1 of the FAA.
The case involved Angelo Brock, a Colorado distributor for Flowers Foods, the producer of packaged baked goods including Wonder Bread. Brock delivered products from a Colorado warehouse to local retail stores without leaving the state. After Brock filed wage-and-hour claims against the company, Flowers Foods sought to compel arbitration under a distribution agreement requiring disputes to be resolved privately.
The Supreme Court rejected the company’s argument that workers must either cross state lines or directly interact with vehicles that do in order to fall within the FAA exemption. Writing for the court, Justice Neil Gorsuch said the statute’s text does not support such a bright-line rule. The opinion emphasized that interstate commerce can include a “continuous journey” in which portions of transportation occur entirely within one state.
“The individual does not have to physically cross state lines to be...
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