Justices Say Transit Details, Not Labels, Determine Arbitration

The US Supreme Court’s decision last month in Flowers Foods, Inc. v. Brock points toward a more nuanced future by reaffirming two principles that at times can sit uneasily together.

On one hand, the Federal Arbitration Act reflects a federal policy choice strongly favoring the enforcement of arbitration agreements. On the other hand, Congress specifically carved out an exemption in the act for certain transportation workers engaged in interstate commerce.

The unanimous opinion, written by Justice Neil Gorsuch, notes that while a stay of proceedings in favor of enforcing an arbitration clause may commonly be the correct decision, the availability of the act’s exemption turns on the facts of the particular case and the worker’s actual role in the flow of interstate commerce.

Rather than relying on labels such as “intrastate” or “local,” courts will be required to engage more deeply with how goods actually move through modern supply chains.

The case arose from claims brought by Angelo Brock, a distributor who delivered products from in-state warehouses to local retail stores. Although Brock never crossed state lines, the goods he handled had traveled through an interstate supply chain.

The employer argued that this intrastate activity required enforcement of an arbitration clause under the Federal Arbitration Act. The court unanimously rejected that approach, but more importantly, it declined to adopt a bright-line rule that would make geography dispositive.

Justice Gorsuch emphasized a functional inquiry grounded in Congress’ Commerce Clause authority, focusing on whether a worker is part of the broader interstate movement of goods. For last-mile delivery workers, this reframing is important. Their work may appear local but, under Flowers Foods, it still can be treated as part of a continuous interstate journey depending on the structure of the supply chain.

Applying that framework, the justices found that Brock’s deliveries were the final leg of an unbroken interstate process.

The opinion doesn’t find that all last-mile drivers fall within the exemption. However, it invites courts to examine the operational realities of each distribution system. This could include examining the continuity of movement of goods, asking if goods have merely paused along their journey or if they have come to rest in a way that would break the interstate chain.

Inventory practices, distribution logistics, warehousing, and the title to goods could prove decisive when it comes to assessing whether a local delivery is functionally a part of an interstate transaction or instead represents a distinct, downstream commercial activity.

For attorneys, facts in these cases could make the difference.

Building out a detailed factual record showing how goods are sourced, transported, stored, and ultimately delivered are crucial facts. This could include reviewing and analyzing contractual arrangements between manufacturers and distributors, supply chain maps, and evidence of how goods are tracked and routed from origin to final destination. Logistics data, shipping records, and title to goods could be the difference between the “last mile” being an integrated part of an interstate journey or something that can be severable from it.

As an example, given the importance of control and coordination across a supply chain, if a manufacturer, distributor, and delivery network are operating under an integrated system with predetermined endpoints, that may support a finding of continuous interstate movement. In contrast, if goods are handed off to an in-state entity that takes title and makes independent decisions about resale, routing, and final delivery, that may look more like a break in the chain.

The court didn’t retreat from its longstanding support for arbitration. The Federal Arbitration Act remains a powerful tool, and there is still the presumption that agreements will be enforced. But Flowers Foods underscores that the transportation-worker exemption is neither symbolic nor static. It has renewed relevance in an economy defined by e-commerce and rapid delivery, where the “last mile” isn’t an isolated endpoint but an integral part of interstate commerce.

For last-mile delivery workers, that shift may prove decisive. In that sense, Flowers Foods underscores that the Federal Arbitration Act’s transportation worker exemption is neither narrow to the point of irrelevance nor so broad as to displace arbitration policy altogether. Its application depends on the facts of each case, even in a legal landscape that otherwise favors arbitration.

The case is Flower Foods Inc. v. Brock, U.S., No. 24-935, 5/28/26.

This article does not necessarily reflect the opinion of Bloomberg Industry Group Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Christopher Riano is a constitutional, public law, and regulatory partner at Holland & Knight.

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