Supreme Court Rules that Last-Mile Transportation Workers Cannot Be Compelled into Arbitration

Supreme Court Rules that Last-Mile Transportation Workers Cannot Be Compelled into Arbitration

In a unanimous decision in Flower Foods, Inc. v. Brock, the Supreme Court of the United States held that last-mile transportation workers cannot be compelled into arbitration.

Flowers Foods, Inc., is one of the country’s largest producers of packaged baked goods, including the popular brand Wonder Bread. With bakeries in 19 states, Flower relies on franchisees who “buy the rights to distribute Flowers[’s] products in particular geographic territories.” Angelo Brock is a franchisee who picks up Flowers’s products from a warehouse in Colorado and delivers them to local stores, all without crossing state lines. Brock then brought a putative collective and class action under the Federal Labor Standards Act (FLSA) and Colorado labor law for misclassification and unpaid wages. Flowers attempted to block the suit and force Brock into arbitration under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1–16, arguing that Brock’s franchise contract included a clause requiring him to resolve any disagreements between him and Flowers via individual arbitration. After losing in the district court and the Tenth Circuit, Flowers appealed to the Supreme Court, which granted certiorari.

The Court considered whether the transportation worker exemption (TWE) to the FAA, 9 U. S. C. § 1, applies to last-mile drivers who never cross state lines and never interact with vehicles that do. The Court noted that the exemption had two requirements: workers be (1) “engaged in” (2) “interstate commerce.” Slip Op. at 4. Citing dictionaries from around the time that the FAA was passed in 1925, the Court defined “engage in” to mean “take part in” something or to be “employ[ed]” or “involve[d]” in that thing, and “interstate commerce” as the “[t]raffic,” “intercourse,” or “the transportation of persons or property between or among the several states of the Union, or from or between points in one state and points in another state.” Id. It found “[n]othing in those terms requires an individual to cross state lines or interact with a vehicle that does.” Id. Building upon its previous ruling in Southwest Airlines Co. v. Saxon, 596 U. S. 450 (2022), the Court reaffirmed that the TWE “does not require workers to cross state lines.” Id. at 3. Therefore, Mr. Brock was allowed to maintain his collective and class action suit in federal court and not be forced into individual arbitration.

The Court’s decision today reaffirms existing Ninth Circuit case law about last-mile transportation workers being exempt from the FAA. In Carmona Mendoza v. Domino’s Pizza, LLC, the Ninth Circuit similarly held that drivers who delivered pizza ingredients from a local supply center to Domino franchisees within the state were exempt from the FAA. 73 F.4th 1135 (9th Cir. 2023).

Because the Court only narrowly addressed the bright-line question of whether the TWE applies only to individuals who cross state lines or interact with a vehicle that does, the decision left open whether employers could evade the exemption by structuring their contracts to require transportation workers to set up an independently-operated company, or by requiring transportation workers to buy the goods they transport. Tellingly, however, the Court states in reference to its previous decisions regarding the scope of the TWE, “we have rejected efforts to cabin its reach.” Slip Op. at 3.

If you are a last-mile transportation worker, such as someone who delivers for Amazon or other online retailers, the implication of today’s decision is momentous. Employers are unlikely to be able to compel you into mandatory individual arbitration, and force you to confront your employer or ex-employer alone.

Contact Bryan Schwartz Law today if you have questions.