SCOTUS rules intrastate delivery drivers can bypass forced arbitration

Angelo Brock is a franchisee distributor who picks up Flowers Foods products, including Wonder Bread, Jumbo Honey Buns, and Butterscotch Krimpets, from a warehouse in Colorado and delivers them to retailers in the Denver area. He does not cross state lines. In 2022, Brock filed a class and collective action lawsuit in federal district court alleging that Flowers Foods had misclassified him as an independent contractor in violation of the Fair Labor Standards Act and Colorado wage law.

Flowers Foods is one of the nation's largest packaged baked goods producers, with bakeries in 19 states. The company's distribution model requires franchisees to purchase products from Flowers and resell them to local retailers. The company uses that structure to classify drivers as independent contractors rather than employees.

Flowers Foods moved to compel arbitration, citing the distribution agreement Brock had signed. The Federal Arbitration Act generally requires courts to enforce pre-dispute arbitration agreements. But Section 1 of the FAA carves out an exemption: 'nothing' in the statute compels arbitration in disputes involving 'contracts of employment' of 'any other class of workers engaged in foreign or interstate commerce.' Flowers argued Brock couldn't claim that exemption because he never crossed state lines and never interacted with vehicles that did.

Both the U.S. District Court for the District of Colorado and the Tenth Circuit rejected Flowers's motion. The Tenth Circuit ruled at 121 F.4th 753 that Brock's intrastate route 'formed a constituent part of the interstate journey' of the goods, from out-of-state bakeries to their final retail destinations.

On May 28, 2026, the Supreme Court affirmed the Tenth Circuit in an 8-page opinion authored by Justice Neil Gorsuch, nominated by President Trump and confirmed 54-to-45 by the Senate in 2017. The decision was unanimous.

Gorsuch grounded the ruling in the statutory text. When Congress enacted the FAA in 1925, 'engage' meant to 'take part in' something. 'Interstate commerce' covered transportation of goods 'between points in one state and points in another state.' That definition includes intrastate legs of a larger interstate journey. Nothing in those definitions, Gorsuch wrote, requires a worker to cross state lines or touch a vehicle that does.

The Court reached back to an 1871 case, The Daniel Ball, to support its reasoning. In that case, a steamer operating entirely within Michigan was held to be 'engaged in commerce between the States' because it transported goods destined for other states. The Court wrote that the Daniel Ball principle, that multiple independent actors can each be 'engaged in' the same interstate journey, applies directly to last-mile drivers today.

Gorsuch offered a hypothetical with three Krimpets drivers to illustrate: if one driver takes goods to the state border, one crosses, and a third takes them to the final destination. All three are part of the same interstate transaction. Only the second driver crosses state lines, but under Flowers's theory, only Driver 2 qualifies. 'That cannot be right,' the Court said.

This ruling is the fourth consecutive Supreme Court win for workers on the FAA Section 1 exemption in seven years. In New Prime Inc. v. Oliveira (2019), the Court held that Section 1 applies to independent contractors, not just employees. In Southwest Airlines Co. v. Saxon (2022), the Court ruled that airline cargo loaders qualify even if they don't fly planes across state lines. In Bissonnette v. LePage Bakeries Park St., LLC (2024), the Court held that workers need not be in the transportation industry to qualify. They only need to be directly engaged in moving goods across borders.

Brock adds a fourth dimension: workers don't need to cross state lines themselves or interact with vehicles that do, as long as their intrastate work is part of an interstate journey.

Harvard Law professor Benjamin Sachs, writing on OnLabor the day of the decision, noted the ruling 'will have important implications for many workers, including Amazon's last-mile drivers who deliver goods that originate out of state.' The Court also flagged, but did not decide, two questions Flowers raised in passing: whether Brock's business-entity structure (he owns an 'independently operated company') breaks the employment relationship, and whether title changing hands before delivery disqualifies him.

Those questions are now live for future litigation. Lower courts have split on both. The Ninth Circuit in 2024 held Section 1 inapplicable to contracts 'between two business entities.' The Second Circuit in 2025 held it applicable to single-employee corporations.

The National Federation of Independent Business, the U.S. Chamber of Commerce, the Retail Litigation Center, the National Retail Federation, and the National Association of Manufacturers all filed amicus briefs opposing the worker exemption. Beth Milito, Vice President and Executive Director of NFIB's Small Business Legal Center, said after the ruling: 'This expansive interpretation does not honor Congress' intention with the FAA, and will leave small businesses nationwide vulnerable to lawsuits as a new standard is slowly determined at their expense.'

NFIB's brief had argued that expanding the exemption would overburden the courts and harm small businesses that rely on arbitration to resolve disputes quickly without expensive litigation.

California Attorney General Rob Bonta issued a statement calling the ruling 'a win for workers' rights.' Bonta had joined a multistate amicus brief urging the Court to uphold the Tenth Circuit. 'Truck drivers are critical to state economies, and drivers should have access to courts to redress their workplace concerns to the fullest extent of the law,' Bonta said.

The ruling clears the immediate path for Brock's wage and misclassification claims to proceed in federal court. A separate Flowers Foods misclassification case in California resulted in a $55 million settlement, with the company agreeing to repurchase approximately 350 distribution territories and reclassify drivers as employees.

Companies that use last-mile delivery workers, including Amazon DSP partners, food delivery platforms, and regional baked-goods distributors, now face broader exposure to federal court lawsuits if those workers' routes are part of interstate supply chains. Over 30% of employers that require include class action waivers that bar workers from bringing collective claims; losing the arbitration shield could expose companies to costly class actions.

The Court's narrow framing answered only Flowers's 'cross-or-tag' theory and explicitly left open the business-entity and title-transfer questions. More FAA exemption cases are likely in coming terms. The employer coalition is expected to refocus future litigation on those unanswered questions.