Supreme Court Expands FAA “Transportation Worker” Exemption in Flowers Foods v. Brock

By Staci Cassidy, J.D., Senior Vice President, PartnerSource

On May 28, 2026, the U.S. Supreme Court unanimously held in Flowers Foods, Inc. v. Brock that the Federal Arbitration Act’s (“FAA”) §1 exemption may apply even where a worker never crosses state lines or interacts with interstate vehicles. The decision continues the Court’s trend of narrowing the reach of arbitration agreements in transportation-related workforces—but it also leaves important limits unresolved, which gives employers meaningful ways to push back.

Facts of the Case

Flowers Foods distributes baked goods nationwide through contracts with independent distributors who transport the goods from in-state warehouses to local retailers. Angelo Brock, a Denver-area distributor, never crossed state lines and worked entirely intrastate delivering the baked goods to local retailers.

The FAA generally requires courts to enforce arbitration agreements. But there is an exception contained in §1 of the FAA for certain “transportation workers” engaged in the movement of goods in interstate commerce.

After Brock sued for alleged wage violations, Flowers moved to compel arbitration. The lower courts rejected that request, concluding Brock fell within the FAA’s §1 exemption for “workers engaged in…interstate commerce.”

What the Court Decided

The Court held that a worker may qualify for the §1 exemption if he plays a direct and necessary role in the movement of goods in a continuous interstate journey, even if his own work is entirely intrastate. Rejecting a bright-line rule, the Court focused on functional participation in the flow of interstate commerce, rather than whether the worker personally crosses state lines or interacts with interstate vehicles, such as loading and unloading them.

The Role of the Distribution Model

Following the Court’s holding, the factual structure of Flowers helps explain both the breadth—and the limits—of the decision. Flowers Foods used an independent distributor model in which baked goods moved from out-of-state bakeries into regional warehouses and were then delivered to retailers by distributors who operated defined territories. That structure allowed Brock to argue that his work represented the final leg of a continuous interstate journey, with the distribution agreement functioning as the mechanism that carried goods from their interstate origin to their ultimate retail destination. The Court accepted that framing at a high level, focusing on the distributor’s role in the ongoing movement of goods, rather than the legal form of the agreement itself.

The Key Tension: Commerce Clause vs. FAA §1

At the heart of the decision is an unresolved tension. The Court’s analysis draws from the broad interpretation of interstate commerce under the Commerce Clause, which treats interstate commerce as a continuous, unified process extending through multiple segments of a supply chain for the purpose of expanding Congress’s power to regulate activity affecting interstate trade. But §1 of the FAA §1 serves a different and narrower purpose: it carves out a limited category of workers actually engaged in transportation work, not all workers connected to interstate goods. Flowers’ core argument highlighted this distinction—urging the Court to avoid collapsing the expansive Commerce Clause concept of interstate commerce into the FAA’s targeted transportation worker exemption—but the Court declined to draw a clear limiting line. As emphasized in rebuttal, Flowers argued that importing broad Commerce Clause concepts into §1 improperly transforms a narrow worker-based exemption into a sweeping supply-chain rule untethered from the worker’s actual transportation duties.

That omission becomes particularly significant when comparing the independent distributor/franchise model at issue in Flowers to a centralized distribution model, where the employer itself controls inbound interstate transportation into a warehouse or distribution center and then separately coordinates local delivery. In that setting, the employer receives goods, unloads them, integrates them into inventory, and only then dispatches trucks for local routes—creating a much clearer operational break between interstate transport and intrastate distribution.

Where the Real Battleground Lies

Critically, the Court did not define when an interstate journey ends, nor did it resolve how warehousing, inventory control, or distribution structure affect the analysis. Those omissions are likely to drive the next wave of litigation.

The distinction becomes especially important when comparing the independent distributor model in Flowers to a centralized distribution model. In a centralized system, the employer typically:

• Receives goods transported interstate into a warehouse

• Unloads and integrates those goods into inventory

• Separately coordinates local delivery to customers

That structure creates a clearer operational break between interstate transportation and intrastate distribution—one the Court did not address.

Bottom Line

Flowers expands the arbitration exception—but does not define its limits.

The key question going forward will be where interstate commerce ends and local business begins—an issue that will often turn on how a company’s distribution system is structured.

If you have any questions about how this decision impacts your business, please reach out to your PartnerSource team leader.