The Supreme Court holds last‑mile delivery drivers may avoid forced arbitration under the FAA’s Section 1 exemption. What this means for workers and employers.
Supreme Court Confirms Last-Mile Drivers Can Bypass Forced Arbitration
In a unanimous decision issued on May 28, 2026, the U.S. Supreme Court ruled that delivery drivers who move goods on the final, intrastate leg of an interstate journey can fall within the Federal Arbitration Act’s Section 1 transportation‑worker exemption—even if they never cross state lines or handle vehicles that do. The Court held that “[a] worker who transports goods on an intrastate leg of an interstate journey can qualify for §1’s exemption without crossing state lines or interacting with vehicles that do.” Flowers Foods, Inc. v. Brock, No. 24-935, 2026 WL 1485669, at *3 (U.S. May 28, 2026).
The case arose from a wage-and-hour class action brought by a Flowers Foods distributor who picked up baked goods in Colorado and delivered them to local stores, all within the state. The Court affirmed the Tenth Circuit’s denial of Flowers Foods’ motion to compel arbitration, rejecting the company’s proposed bright-line rule requiring that exempt workers cross state lines or interact with vehicles that do. The decision resolves lingering questions following prior Supreme Court arbitration decisions, clarifying that last‑mile drivers delivering goods that traveled interstate may invoke Section 1’s exemption.
The Holding in Plain English
The FAA generally enforces arbitration agreements, but Section 1 excludes certain transportation workers “engaged in interstate commerce.” The question was whether local delivery drivers qualify when they only move goods within a single state. The Court said yes: if you are part of the continuous interstate flow of goods—from an out‑of‑state source to their intended in‑state destination—you can be “engaged in interstate commerce” even if your routes are intrastate. Relying on ordinary meaning and historical usage, the Court explained that “interstate commerce” includes continuous carriage between points in different states, much of which may occur within a single state. Flowers Foods, Inc., 2026 WL 1485669, at *4. The Court rejected Flowers Foods’ request for a categorical cross-border or vehicle‑interaction requirement, concluding the statutory text cannot support that rule.
Key Reasoning
Text and history: The Court emphasized that “engaged in interstate commerce” encompasses workers who play a direct, necessary, and active role in moving goods across borders, even during intrastate segments of a single continuous shipment. The opinion grounds its analysis in contemporaneous definitions and historical examples, recognizing intrastate segments as part of interstate commerce when the shipment’s journey spans multiple states.
Prior decisions: The ruling builds on the Court’s recent Section 1 cases, confirming that the exemption is not limited to workers who themselves cross borders or to those in a formal “transportation industry” role, so long as their work is integral to the interstate flow of goods. The Court cited its prior holdings that Section 1 covers certain independent contractors and workers who do not themselves cross state lines, and it reiterated that what matters is a direct and necessary role in moving goods across borders.
No bright-line “cross-or-tag” rule: The Court refused to adopt Flowers Foods’ proposed rule that a worker is exempt only if they cross state boundaries or handle vehicles that do. Instead, the Court held that, at least in some circumstances, workers who transport goods on intrastate last‑mile legs are exempt.
Why This Is a Win for Plaintiffs and Workers
This decision is a significant victory for workers—especially last‑mile drivers and others in the logistics chain—because it ensures that many misclassification and wage claims can be heard in court rather than forced into individual arbitration.
Practical access to the courts: Workers delivering goods that traveled interstate can invoke Section 1 to avoid arbitration clauses and class‑action waivers, preserving the ability to bring collective wage‑and‑hour claims. The Court affirmed that last‑mile drivers transporting goods from out‑of‑state sources to local destinations can qualify as transportation workers “engaged in interstate commerce.”
Strengthens misclassification cases: Companies frequently argue that local routes defeat the exemption. Not anymore. The focus is on whether the driver’s work is part of the continuous interstate movement of the goods, not on crossing state lines.
Class and collective leverage: Without forced arbitration, plaintiffs can pursue Rule 23 and FLSA collective actions to address widespread practices and recover unpaid wages, overtime, deductions, reimbursement, and penalties at scale.
Implications for Wage-and-Hour and Last-Mile Driver Cases
Broader coverage of drivers in national supply chains: Drivers who perform in-state deliveries of goods that originated out of state are strong candidates for Section 1 coverage when they play a direct, necessary, and active role in the goods’ interstate journey.
Case-by-case issues remain: The Court left open other potential arguments—such as whether a given agreement is a “contract of employment,” corporate form questions, title passage, or whether a product has reached its “intended destination.” Plaintiffs should develop factual records on how goods flow from out‑of‑state origins to end retailers, the integration of delivery routes with upstream logistics, and the driver’s role in that chain. The Court noted but did not decide issues that some lower courts consider relevant, including agreements with independently operated entities and whether drivers take title to products before resale.
What Workers Should Do If They Believe They Were Misclassified or Denied Wages
Act promptly: Wage claims are subject to statutes of limitations. Preserve pay records, route manifests, communications, and any agreements you signed.
Assess arbitration clauses: Even if your agreement has an arbitration clause, you may fall within Section 1’s exemption if you deliver goods that traveled interstate and your work is part of their continuous journey.
Consult experienced counsel: Speak with a plaintiffs’ employment firm that regularly litigates wage‑and‑hour and misclassification class and collective actions. An attorney can evaluate whether Section 1 applies to your situation and the best forum for your claims.
Edelson Lechtzin LLP’s Wage-and-Hour Advocacy
Edelson Lechtzin LLP represents workers nationwide in complex wage‑and‑hour class actions and FLSA collective actions. We have deep experience with misclassification and last‑mile logistics cases, aggressively pursuing unpaid wages, overtime, unlawful deductions, and expense reimbursements. We are committed to holding companies accountable in high‑stakes litigation and maximizing recovery for workers.
Call to Action
If you are a delivery driver, distributor, or logistics worker who believes you were misclassified or denied wages, contact Edelson Lechtzin LLP for a free, confidential consultation. Call us at 844-696-7492 or email [email protected]. You can also reach us through our online form at HERE. We will evaluate your claims, explain your options, and fight for your rights.
Disclaimer
This post is for informational purposes only and does not constitute legal advice. Reading this post does not create an attorney‑client relationship. You should consult an attorney about your specific circumstances.