May 11, 2026 SCOTUS Last-Mile Case May Weaken Arbitration

A SCOTUS case on last-mile delivery could limit manufacturers’ ability to enforce worker arbitration agreements.

By John Amabile and Debbie Edney

A case argued before the U.S. Supreme Court this spring and expected to be decided this summer could significantly affect when manufacturers and other employers can enforce arbitration clauses in their employment and worker-classification agreements.

The court is wrestling with the question of whether “last mile” delivery workers — those who deliver goods locally and do not cross state lines — are nonetheless covered under the Federal Arbitration Act’s exemption for workers “engaged in foreign or interstate commerce.” During oral argument in Flowers Foods Inc. v. Brock, the court’s questions were focused on whether the exemption status under the FAA turns on a worker’s functional role in the free flow of goods across borders or whether workers are required to cross borders themselves to benefit from the exemption.

While the justices’ questions suggested they were inclined to rule against employers in this case, they also appeared challenged by exactly how to define the type of worker that falls under the FAA exemption. This case comes on the heels of SCOTUS’s ruling in Bissonnette v. LePage Bakeries Park St., another case examining the FAA’s exemption provisions from April 2024. In Bissonnette, the court rejected an industry-focused path to exclude workers from the exemption, which the justices were concerned would breed more litigation. 

While a SCOTUS decision in Flowers is pending, companies engaged in interstate commerce should prepare for an outcome where the number of workers exempted from the FAA will broaden. For decades, companies have relied on the FAA to enforce arbitration provisions in their contracts, with only a limited statutory exemption for “transportation workers.”  If the Flowers’ decision expands the exemption to encompass “last mile” workers whose travel is purely intrastate, then companies are likely to face more lawsuits and class actions without the protections of their arbitration provisions for individuals who have not traditionally been considered “transportation workers.” As these cases narrow the FAA’s reach and expand the category of workers who may fall under the exemption, creating more uncertainty for businesses, companies should consider whether state law may provide an alternative or supplemental foundation for enforcing their arbitration provisions.

Case Background

At the center of Flowers Foods Inc. v. Brock is a dispute over the scope of the FAA, specifically the Section 1 exemption for “transportation workers engaged in interstate commerce.” The court must determine whether a “last-mile” delivery driver who transports goods entirely within one state, but as part of a broader interstate supply chain, falls within that exemption.

In the case, Flowers Foods argued for a narrow, bright-line rule: only workers who directly participate in cross-border transportation, either by crossing state lines themselves or by loading/unloading goods onto vehicles that do, are exempt from arbitration under Section 1. Because the respondent, Angelo Brock, delivers goods from an in-state warehouse to local retailers after those goods have already completed their interstate journey, Flowers contends Brock is not engaged in interstate commerce for purposes of the exemption.

Brock, by contrast, argued for a broader view of the exemption. He maintains that interstate commerce is a continuous flow from initial loading until the product reaches the final destination, and that a temporary stop at a warehouse is not the end of that journey. Under this view, last-mile drivers are integral to completing the interstate journey, and thus should be treated as transportation workers engaged in interstate commerce even if they never cross state lines themselves.

The justices’ questioning highlights a key tension in this case: whether the analysis should focus on the worker’s specific activities (Flowers’ approach) or the overall movement of goods in commerce (Brock’s approach).

What the Justices Argued About Arbitration Exemptions

The justices spent considerable time going back and forth with both attorneys over the types of products at play in interstate commerce and what constitutes the end of the product’s journey. Is the end point the warehouse, or is it the consumer at the supermarket? For the justices, these questions appeared important to clarify whether both a person who drives a product 100 miles across state lines and a person who picks up bread at a warehouse and drives it five miles within a state qualify for the Section 1 FAA exemption.

In one telling part of the arguments, Justice Elena Kagan said about the exemption: “Practically speaking…the manufacturer of bread needs to get it to all the local markets that sell bread. When we think of interstate commerce…it might be one leg or three legs or eight legs…different legs might cross different state boundaries or not.”

“If that’s in interstate commerce,” she continued, “…then everybody who’s involved in making the goods cross those state lines ought to fall into the same category, not be split up based on the sort of happenstance of did you take the first mile, did your 10-hour shift cross a state line or didn’t it.”

Takeaways for Companies Engaged in Interstate Commerce

For businesses engaged in interstate commerce, the stakes are significant. The ruling will determine which categories of workers will be compelled to arbitrate disputes if their agreements include an arbitration clause. Broadening the exemption could expand litigation exposure and limit arbitration agreements, particularly in logistics-heavy industries, while a narrower rule would preserve arbitration as a key risk-management tool. Either way, the argument in this case indicated that this will likely not be the last case about this issue to make its way to the Supreme Court. Uncertainty will therefore continue.

The Supreme Court’s 2024 ruling in Bissonnette, coupled with the arguments in Flowers, suggest manufacturers and businesses will continue to see the scope of workers covered by the exemption widen. This means that the number of arbitration clauses that may not be enforceable under the FAA will also get expanded and companies that have included such clauses in their contracts in hopes of avoiding traditional lawsuits and litigation might find themselves in court more often.

For now, companies should consider using state law as an alternative to the FAA to anchor their arbitration clauses. Companies should also focus on customizing their arbitration provisions as well as reviewing their current arbitration provisions if they haven’t been revised in some time.

About the Authors:

John Amabile is a Parker Poe litigator with more than 30 years of experience representing manufacturers and other businesses in complex disputes, including arbitration and commercial litigation in state and federal courts.

Debbie Edney is a Parker Poe litigator with more than 20 years of experience advising manufacturers and other business clients in complex disputes involving noncompete agreements, trade secrets, worker classification, and employment litigation.

Read more from the authors:

SCOTUS Ruling Could Impact Massive Amount of Companies | Industry Today, March 11, 2024

What Recent SCOTUS Rulings Means for Manufacturers | Industry Today, June 4, 2024

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