US Supreme Court Expands FAA Exemption for Last-Mile Drivers
Stories are grouped across languages, rewritten into a fixed editorial format, and linked to original sources. How we report.
TL;DR
- US Supreme Court issued a unanimous decision impacting FAA arbitration exemption.
- The case involved Flowers Foods, Inc. and last-mile delivery drivers.
- Decision expands the class of transportation workers exempt from the FAA.
- Employers face increased arbitration risks relating to these workers.
Overview
On May 28, 2026, the United States Supreme Court issued a unanimous decision in Flowers Foods, Inc. v. Brock clarifying and expanding the exemption for transportation workers under the Federal Arbitration Act (FAA). The ruling impacts arbitration agreements for last-mile delivery drivers and may increase the risk of litigation for employers in the transportation sector.
What Happened
The Supreme Court considered whether certain last-mile delivery drivers qualify for the Federal Arbitration Act's exemption for transportation workers engaged in interstate commerce.
In Flowers Foods, Inc. v. Brock, the Court held that these workers, even if they only deliver goods within one state as the final step of an interstate journey, fall within the FAA exemption.
As a result, arbitration agreements with such drivers are not enforceable under the FAA.
The decision is unanimous and clarifies the scope of the FAA's transportation worker exemption, following prior disputes over the interpretation.
Context
The FAA generally favors the enforceability of arbitration clauses in employment contracts but specifically exempts 'workers engaged in foreign or interstate commerce,' including certain transportation workers.
Last-mile delivery drivers often deliver goods that have traveled interstate but may themselves work entirely within a single state. Uncertainty has surrounded their inclusion within the FAA exemption.
This decision provides clarity and expands the group of workers who are exempt from compulsory arbitration under the FAA.
Why It Matters
- Employers who use arbitration agreements with last-mile delivery drivers may now face increased risks, as those agreements can be challenged under the expanded FAA exemption.
- The ruling could lead to more employee claims being resolved in courts rather than through arbitration for similar roles.