“Last-mile” drivers for gig programs such as Amazon Flex can leverage a new US Supreme Court decision to help keep their wage-and-hour suits out of arbitration, though for many working for companies such as Instacart or DoorDash it’s far from a surefire solution.
The Supreme Court ruled unanimously Thursday that the Federal Arbitration Act’s exemption for transportation workers in interstate commerce applies to truck driver Angelo Brock, whose trips delivering Flowers Foods Inc. products all took place within Colorado but were part of a continuous interstate journey.
Workers who deliver products for
Flowers Foods Inc. v. Brock is the justices’ fourth opinion on who falls under the exemption since 2019, marking another victory for workers seeking to pursue wage-related claims in court. The FAA exemption bars the enforcement of mandatory arbitration clauses respecting “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
The latest opinion “removed yet another obstacle standing in the way of at least some gig workers qualifying for” the carve-out, said University of Alberta arbitration law professor Tamar Meshel.
Attorneys and arbitration law scholars previously told Bloomberg Law that a ruling for last-mile delivery drivers would likely push gig and other companies that rely on them to rethink their supply chains and rewrite contracts to manage labor risks and work around the arbitration exemption.
Even if companies decide to contract with worker-formed business entities instead of individuals—a practice worker advocates decry as creating “sham corporate agreements"—to help mitigate wage liability, whether such contractual agreements are covered by the exemption will occupy murky legal ground until the high court weighs in, said Foley & Lardner LLP partner Christopher Ward, who co-authored a brief backing Flowers Foods.
The issue wasn’t presented for review in Flowers Foods. However, Ward said it’s a “major area of litigation” that lower courts are currently weighing.
No Bright-Line Rule
Justice Neil Gorsuch’s opinion rejected the argument that a delivery driver must either cross state lines themselves or must load or unload goods from a vehicle that crossed borders to invoke the exemption. The court’s earlier Southwest Airlines Co. v. Saxon ruling made clear that workers don’t have to go from one state to another, he said. “Nor, we now add, does §1 turn on a game of tag with vehicles that do.”
The justices’ “textual approach is very different from how the Court interpreted the FAA in prior decades,” said Pace University arbitration law professor Imre Szalai. The result in Flowers Foods, “with a worker winning, would have been unlikely ten or twenty years ago.”
With each new ruling, more workers have received guidance on whether their duties allow them to claim the carve-out and avoid arbitration. But the justices’ refusal to establish the bright-line rule Flowers sought indicates it may take several years parsing nuanced, fact-specific legal issues until there’s a precise definition of the classes of workers that engage in interstate commerce and when the journey ends, attorneys and arbitration law scholars said.
The high court’s past FAA exemption rulings established that workers must play a direct, necessary, and active role in “moving goods across borders” to qualify, Meshel said. There’s “still an argument to be made” that some gig workers involved in transportation—"such as mobile-based ride-sharing drivers and food delivery drivers"—lack those characteristics, she added.
“A DoorDash local delivery driver who goes to the local supermarket to pick up my groceries is not playing a direct and necessary role in the free flow of goods, but an Amazon local delivery driver who carries and delivers my order for the final mile of an interstate journey does play a direct role and should qualify for the exemption,” Szalai said.
Incremental Opinions
The justices “really don’t have a choice” but to use incremental rulings that slowly define who falls under the arbitration carveout, said Lise Gelernter, a labor and employment arbitrator based in Buffalo, N.Y., who co-authored an amicus brief for the National Academy of Arbitrators supporting Brock.
They could issue broader decisions, but “they set themselves up for dealing with how to define it because they never defined it from the beginning,” in the 2001 Circuit City Stores Inc. v. Adams decision, she said.
Circuit City established that the exemption applies to transportation workers involved in the flow of interstate commerce. Since then, the justices have taken a worker-by-worker approach to clarifying who falls under the carve-out, without issuing a sweeping exemption rule.
Gorsuch pointed out several unresolved legal issues that the court may need to address in future cases. These include whether the exemption applies to contracts between corporate entities, and the exact point at which an interstate shipment of goods officially reaches its intended destination and makes additional transport purely local commerce.
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But last week, the high court declined to take up a case seeking clarity on whether the Second Circuit correctly held that the exemption can be applied to agreements involving single-employee corporations like the LLCs some companies have directed workers to form.
That’s “the only issue that is currently subject to a circuit split, as far as I know,” Meshel said.
The case is Flowers Foods Inc. v. Brock, U.S., No. 24-935, opinion filed 5/28/26.
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