Last-Mile Delivery Drivers May Avoid Arbitration Under Supreme Court Ruling

As online shopping and rapid delivery services continue to reshape the economy, employers increasingly rely on individuals who transport goods for their “last mile,” from warehouses and distribution centers to retail locations and consumers. A recent Supreme Court decision may make it more difficult for employers who operate in the “last mile” arena to enforce arbitration agreements against those drivers.

Summary of The Case

On May 28, 2026, the Supreme Court unanimously held in Flowers Foods, Inc. v. Brock that certain last-mile delivery drivers may qualify for the transportation worker exemption under Section 1 of the Federal Arbitration Act (FAA), even if they do not cross state lines as part of their job or directly interact with vehicles that do. The Supreme Court’s decision resolves a question that has divided lower courts, and it may have significant implications for employers that operate in local delivery networks.

The case involved Flowers Foods, the maker of products such as Wonder Bread. Angelo Brock, a distributor in Colorado, delivered Flowers products from an in-state warehouse to local stores. Brock filed wage-and-hour claims against Flowers, and Flowers sought to litigate the claims through arbitration based on arbitration agreement between the two. Brock argued that he qualified for the transportation worker exemption under the FAA and thus could not be compelled to arbitrate his claims. The Supreme Court agreed.

The Supreme Court Rejects a Bright-Line Rule

Flowers argued that workers should qualify for the FAA exemption only if they personally cross state lines or directly interact with vehicles that do. The Supreme Court rejected that argument.

Writing for the Court, Justice Neil Gorsuch stated that Flowers’ theory was simply “incorrect.” The Court explained that a worker may be engaged in interstate commerce even when performing only an intrastate portion of a larger interstate journey.

To illustrate the point, the Court described a shipment involving three drivers: One driver transports goods to a state border, another carries them across the border, and a third completes the delivery. According to the Court, all three drivers play a “direct, active, and necessary part” in moving goods through interstate commerce.

Why the Decision Matters

The decision has implications far beyond the bakery industry. Modern supply chains rely heavily on workers who transport goods from warehouses and distribution centers to retailers and consumers. Employers in industries such as retail, logistics, food distribution, and e-commerce frequently use workers who perform these types of local deliveries.

The Supreme Court’s decision continues a recent trend of broadly interpreting the FAA’s transportation worker exemption. For example, two years ago, in Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024), the Supreme Court rejected the argument that a worker must be employed in the transportation industry to qualify for the exemption, emphasizing instead the worker’s role in the movement of goods through interstate commerce. As a result, employers may face increased challenges when attempting to enforce arbitration agreements against workers involved in the movement of goods through interstate supply chains.

Importantly, the Supreme Court did not hold that all local delivery drivers are exempt from the FAA and it expressly declined to address several issues that may become important in future cases, including whether the worker operates through a separately incorporated business, whether title to the goods changes hands before delivery, and whether the goods have already reached their intended destination before the worker becomes involved in the delivery process.

What This Means for Employers

Employers that utilize delivery drivers, logistics personnel, distributors, or other transportation-related workers should consider reviewing their arbitration agreements in light of the decision.

Employers may also wish to evaluate whether state arbitration laws provide an alternative basis for enforcing arbitration agreements when the FAA does not apply. Because the Court left several important questions unresolved, litigation concerning the scope of the transportation worker exemption is likely to continue.

For employers operating in today’s delivery-driven economy, Flowers Foods serves as a reminder that the FAA’s transportation worker exemption remains an active and evolving area of the law.