Supreme Court Rules FAA Arbitration Exemption Covers Last-Mile Drivers
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TL;DR
- Supreme Court ruled in Flowers Foods v. Brock.
- Last-mile drivers engaged in interstate commerce are exempt from the FAA's arbitration requirement.
- Drivers do not need to cross state lines to qualify for the exemption.
- The decision may influence how lower courts interpret the FAA exemption.
Overview
On June 2024, the US Supreme Court unanimously held in Flowers Foods v. Brock that drivers delivering goods as part of an interstate journey-known as 'last-mile' drivers-are exempt from mandatory arbitration under the Federal Arbitration Act (FAA), even if they do not personally cross state lines.
What Happened
The Supreme Court reviewed whether drivers who deliver goods locally, as the final step in an interstate delivery process, qualify for exemption from the FAA requirement to arbitrate employment disputes.
Flowers Foods argued that only employees who cross state lines or interact directly with vehicles that do should be covered by the exemption.
Justice Neil Gorsuch, delivering the opinion for a unanimous court, rejected that limitation, stating that workers engaged in the broader process of interstate commerce qualify for the exemption regardless of whether they cross state boundaries themselves.
The Court upheld the lower court's judgment, clarifying that participation in the continuous interstate transportation of goods-without personally crossing state lines-meets the standard for exemption from FAA-mandated arbitration.
Context
The Federal Arbitration Act normally compels disputes to arbitration, but exempts 'workers engaged in interstate commerce,' a phrase long debated in litigation involving transportation and delivery personnel.
Recent Supreme Court cases have considered the boundaries of this exemption, with the Court consistently interpreting it broadly to protect workers whose jobs are part of interstate commerce, even if their own activities are localized.
Why It Matters
- The ruling establishes that last-mile delivery drivers, whose work completes an interstate supply chain, cannot be compelled to arbitrate employment disputes under the FAA.
- This clarifies the legal rights of many transportation and delivery workers and may affect employer arbitration policies in the logistics and delivery sectors.