SCOTUS Unanimous: Last Mile Exempt §1 FAA

Last week, the U.S. Supreme Court issued a decision in Flowers Foods, Inc. v. Brock, U.S. Sup. Ct. No. 24-935, 608 U.S. ___ (May 28, 2026) regarding the Federal Arbitration Act (FAA) and the question of whether someone can qualify as a worker under the §1 exemption if they never cross state lines and never interact with vehicles that do. Typically, the FAA requires courts to enforce many private arbitration agreements, but it also provides that “nothing” in the law shall be used to compel arbitration in disputes involving the “contracts of employment” of any class of workers “engaged in . . . interstate commerce.” 9 U.S.C. §1. The Supreme Court’s latest decision eliminates one of the many arguments that have been raised to counteract the interstate arbitration exemption under the FAA. In recent years, SCOTUS addressed the scope of §1’s exemption no fewer than three times. In each case, they rejected efforts to cabin its reach. First, in New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), they held that the “contracts of employment” §1 embraces include contracts governing independent contractors, not just employees. Then, in Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), they held an airline worker who loaded and unloaded cargo fit within §1’s exemption, even though she did not fly planes or otherwise cross state lines. Finally, in Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246, 249 (2024), they held that a worker can fall under §1 whether employed in the “transportation industry” or some other, so long as their work “play[s] a direct and necessary role in the free flow of goods across borders.” In the instant mattter, they clarified that independent contractors and employees that make “last mile” deliveries as part of a “continuous journey” of goods from one state to another are exempt from arbitration under §1 of the FAA covering interstate transportation workers, even if all of the distributor’s services are intrastate. The Court stated such workers “can sometimes be direct, necessary, and active participants in moving goods ‘from … points in one state’ to ‘points in another state’ without crossing state lines or interacting with vehicles that do.” See more here-- https://tinyurl.com/52rvabua and https://tinyurl.com/mj39rvtf