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

11th Cir.: Arb Clickwraps Valid in Fla.

The 100 year-old Federal Arbitration Act (FAA) requires courts to enforce arbitration agreements according to their terms. But arbitration is a matter of contract, and the FAA does not allow a court to compel arbitration unless it is satisfied that the parties agreed to arbitrate. If the existence of the agreement is not genuinely disputed, the court must compel arbitration.These principles apply equally to so-called “clickwrap” agreements, in which users assent to terms by clicking a button near a disclosure referencing those terms. Under Florida law, the central question is whether the parties mutually assented to be bound. In the Eleventh Circuit's recent ruling, Lamonaco v. Experian Inform. Sols., Inc., 2025 WL 1831283 (11th Cir. July 3, 2025), because Experian submitted competent and unrebutted evidence of an agreement to arbitrate, the federal district court for the Middle District of Florida erred in denying its motion to compel arbitration. Relying heavily on Bazemore v. Jefferson Capital Systems, LLC, 837 F3d. 1325 (11th Cir. 2016), appellee argued that a declaration was insufficient to prove that she had agreed to arbitrate her claims. She also claimed that Experian had by its litigation conduct waived its right to insist on arbitration. The district court denied the motion to compel arbitration, finding that the declaration submitted in support of the motion offered only conclusory assertions and rested on business records not attached to the declaration. The district court also held that Experian had waived its right to insist on arbitration which it then appealed. The Eleventh Circuit reversed, holding that the district court erred on both issues. Because the arbitration agreement delegated to the arbitrator “all disputes over the interpretation, applicability, or enforceability of the arbitration agreement,” and an amendment to the agreement stated specifically that the delegation included questions of waiver, whether Experian waived its arbitration right was for the arbitrator to decide. See more here-- https://tinyurl.com/2u45se7k and https://media.ca11.uscourts.gov/opinions/pub/files/202411270.pdf

Did The Mouse Give Arb a Black Eye?

Recent stories of a wrongful death case that Disney sought to arbitrate through a clickwrap-type agreement from its streaming service have caused an uproar. After a media frenzy, Disney relented yesterday, waiving arbitration and stating: "'We strive to put humanity above all other considerations. With such unique circumstances as the ones in this case, we believe this situation warrants a sensitive approach to expedite a resolution for the family who have experienced such a painful loss.'” Though Disney has withdrawn its motion to arbitrate and will proceed in Orange County Circuit Court, those legal clauses still exist across Disney’s platforms, including on its streaming services and park entrance tickets. For instance, when you create a Disney+ or ESPN+ account, you also agree to the Walt Disney Company’s Terms of Use that include waiving a jury trial. Disney said it was defending against the attempt to include them in the lawsuit against a restaurant, an Irish pub inside Disney Springs where the decedent dined, at the shopping complex Disney leases to other companies. The lawsuit alleges it was billed on Disney’s website as having allergen free food and that the waiter then “'guaranteed'” that the food was allergen-free. The patron, a physician, later died from anaphylaxis, even after self-administering an EpiPen. Arbitration was sought based on an older Disney+ subscription, as well as use of the company's website in 2023 to buy theme park tickets. These headlines, combined with the recent controversy over Olympic gymnastics medals, seemingly gives pause to those that would otherwise utilize an ADR process that often leads to faster outcomes with less associated costs and finality in deciding disputes. See more here-- https://tinyurl.com/35dva36a and https://tinyurl.com/nhkbkrrm and https://shorturl.at/6qU3C (image via Deviant Art)

SCOTUS to decide Coinbase Arbitrability

Last week, the U.S. Supreme Court granted cert and agreed to hear a cryptocurrency case that would move a dispute with users of a cryptocurrency exchange out of courts and into private arbitration. At issue is whether upon creating their Coinbase accounts, users agreed to resolve disputes through arbitration. A subsequent agreement related to a Dogecoin sweepstakes stipulated that any issues related to the contest must be addressed in state court. Users later accused Coinbase of violating California’s false advertising law by luring them into a sweepstakes offering Dogecoin prizes so they brought a class-action lawsuit in federal court. A federal district judge in California refused Coinbase's request to enforce arbitration, as the company argued its user agreements required. The Ninth Circuit Court of Appeals affirmed the trial judge's decision. In a related dispute last summer, the U.S. Supreme Court ruled 5-4 in favor of Coinbase. In that case, the justices supported Coinbase’s request to suspend customer lawsuits while seeking appeals to move disputes from courts to private arbitration. The review of the current case will likely impact the current status of arbitrability decisions by courts verus arbitrators and the utilization of arbitration clauses and enforcement of user agreements, especially in digital currency trading. When parties enter into successive contracts, and the first contains an arbitration agreement with a delegation clause but the second does not, who decides whether the first contract’s arbitration agreement governs any later disputes? This may finally resolve a regional circuit split. See more here-- https://tinyurl.com/ycy8xr67 and https://tinyurl.com/32s87z6t and https://tinyurl.com/2z57nbez

SCOTUS Arbitration Decisions

As this tumultous term comes to a close, a pair of recent employment case rulings has given some to insight into the future of the U.S. Supreme Court's direction on arbitration which has been pretty firm as of late. Traditionally, the Court has relied upon precendent and the Federal Arbitration Act (FAA) in enforcing the right to arbitrate as contractual in nature and upholding those agreements. More recently, the Court is reversing decisions that apply even-handed rules to the FAA. In Morgan v. Sundance, a unanimous Court rejected the two-part test applied by most federal circuits in evaluating whether a party has waived its right to compel enforcement of an arbitration agreement. Under that test, waiver would be found only if a party acted in a manner inconsistent with its arbitration rights and that inconsistency caused prejudice to the other side. The principal justification for requiring prejudice was federal policy favoring arbitration. Finding that the usual test for contractual waiver typically requires only inconsistent conduct, the Court held it improper to add a prejudice requirement onto the waiver analysis just for arbitration agreements. The text of the FAA makes clear that courts are not to create arbitration-specific procedural rules. In Viking River Cruises v. Moriana, eight of nine justices agreed with the result relying in part on a severability provision in the arbitration agreement to narrow an otherwise invalid wholesale waiver of state Private Attorneys General Act (PAGA) claims. This suggests that whether courts will compel arbitration of individual PAGA claims may turn on the specific language of the arbitration agreement at issue. The lone dissent came from Justice Thomas, who long has viewed the Federal Arbitration Act does not apply to cases in state courts. The FAA also can preempt rules “that are generally applicable as a formal matter” but have the effect of making arbitration agreements ineffective because they are inherently inconsistent with arbitration. Such rules would include those that would require a party to arbitrate on a class basis or not at all. See decisions-- http://tinyurl.com/3e6hbek9 and http://tinyurl.com/57r87jzc and more here-- http://tinyurl.com/yeaw7sdd and http://tinyurl.com/yc4ktrmv

Rare Florida Case Addresses Arbitrability

This year, a Florida district court of appeal chose to delve into what they saw as a "rather arcane" issue in arbitration of who decides whether a dispute is subject to a contract's arbitration provision: an arbitrator or a judge? There are many recent decisions from around the country deferring to the arbitrator. However, the majority explains the contract's provision in this case did not provide clear and unmistakable evidence that only the arbitrator could decide the issue of arbitrability. Unbeknownst to the renter of an Airbnb, the host had installed hidden cameras throughout the unit. Plaintiff alleged that Defendant secretly recorded the entire stay in the unit. For this violation of privacy, a lawsuit was filed in state court. Airbnb then filed a motion to compel arbitration. Airbnb argued the claims were subject to arbitration through Airbnb's Terms of Service, under which the renter agreed to be bound to pursuant to a "clickwrap" agreement. The arbitration provision contained fairly standard language such as "You acknowledge and agree that you and Airbnb are each waiving the right to a trial by jury." The court held that the clickwrap agreement's arbitration provision and the AAA rule it referenced that addresses an arbitrator's authority to decide arbitrability did not, in themselves, arise to "clear and unmistakable" evidence that the parties intended to remove the court's presumed authority to decide such questions. The evidence on what these parties may have agreed to about the "who decides" arbitrability question was considered ambiguous. Therefore, the trial court retained its presumed authority to decide the arbitrability dispute. A conflict with decisions from other districts was certified. See full opinion here-- https://tinyurl.com/y4oyxsgv