High Court Weighs Arbitration Limits for ‘Last Mile’ Drivers (2)

The US Supreme Court attempted to parse whether “last mile” delivery drivers fall under a federal arbitration law carve out for transportation workers, with the justices pressing attorneys on the workers’ connection to interstate commerce.

The debate at oral arguments Wednesday in Flowers Foods v. Brock largely centered on whether someone qualifies for the Federal Arbitration Act’s transportation worker exemption if they physically cross state lines or if they’re covered simply by being part of a larger supply chain that crosses borders.

Justices Ketanji Brown Jackson, Elena Kagan, and Sonia Sotomayor expressed support for affirming the circuit ruling and repeatedly pushed back on Flowers Foods’ attorney’s argument that the driver wasn’t engaged in interstate commerce because he only delivered products from a Colorado warehouse to local customers.

But Justices Samuel Alito and Amy Coney Barrett, in particular, focused on how to prevent the exemption from becoming limitless while safeguarding those who are part of the interstate supply chain. Both asked if the exemption is purely tied to the goods and if the workers’ specific actions are taken into account.

The conservative justices stated that complexities arise when attempting to define who’s a transportation worker in the modern supply chain framework.

A decision, expected to come before July, would settle the long-standing legal question of whether local delivery drivers fall under the exemption for mandatory arbitration clauses respecting “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

A high court ruling that these drivers are exempt would cause companies like Amazon Flex and Instacart that rely on such gig drivers to lose one of their strongest legal safeguards against potentially costly class actions these workers could bring over wages and other benefits.

It would also keep in place a 2024 US Court of Appeals for the Tenth Circuit order, which allowed a driver to invoke the exemption to pursue claims that the bakery misclassified workers as independent contractors when they were really employees entitled to greater wage protections.

Saxon Applies

The three liberal justices reinforced their position by citing the high court’s 2022 unanimous Southwest Airlines Co. v. Saxon holding that airplane cargo loaders qualify for the arbitration carve out because of their involvement in the process of transporting goods that crossed state or international borders.

Applying that analogy in Flowers Foods, the three justices indicated that the entire route from factory to supermarket is considered a single interstate trip. Whether a particular driver manages the first or final mile, they are all engaged in the same cross-border mission, they said.

The interstate commerce analysis requires the court to examine the actual work performed by the worker, Flowers Foods counsel, Traci Lovitt, head of Jones Day’s issues and appeals practice group, told the justices.

“The interstate journey ends at the warehouse when the goods are unloaded by someone other than” the driver at issue, who only transports bakery goods locally, she said.

“But the problem is we have too many cases that say you don’t have to be the person who actually does the transport” of goods across state borders to qualify for the exemption, Sotomayor replied.

Lovitt’s argument is “a little puzzling” because her logic treats workers differently based on which leg of the interstate journey they performed Brown Jackson said.

The worker in Saxon never crossed a border, so the only thing making their work “interstate” is the nature of their involvement in helping the transportation of goods, the justice reiterated. In that vein, she added, the “last-mile” driver is essential to that interstate journey.

Conservatives’ Questions

Justice Clarence Thomas asked counsel for both sides to explain when the interstate journey ends, but didn’t indicate how he might rule on the case.

Justice Neil Gorsuch attempted to boil the case down to a single bright-line rule that suggests that a delivery driver isn’t in interstate commerce and therefore not exempt from the FAA unless they cross state borders themselves or interact with a vehicle with goods that are on an interstate journey.

“If we can answer the question,” he said, “we’d be done with this case.”

Jennifer Bennett, a principal at Gupta Wessler LLP who argued for the drivers, urged the justices to uphold the circuit decision.

She faced pointed questions from Alito and Barrett about the challenges of applying the century-old law in the context of a modern, multi-state supply chain.

The justices said future clarification is needed on the implications of supply chain logistics, like when legal ownership transfers to the driver—distinct from physical possession—to clearly define the end of the interstate journey.

“There would be very difficult line-drawing questions,” Barrett told Bennett, “even if your position is right.”

The case is Flowers Foods Inc. v. Brock, U.S., No. 24-935, oral arguments held 3/25/26.