On March 25, the Supreme Court heard argument in Flowers Foods, Inc v. Brock, a case presenting a key issue regarding interstate commerce: whether “last-mile” delivery drivers are classified as transportation workers engaged in foreign or interstate commerce under Section 1 of the Federal Arbitration Act.

Truck driver Angelo Brock delivered Flowers Foods’ products. He argues that Flower Foods required the drivers to create shell companies and sign contracts that designate them as independent contractors as opposed to employees. Brock sued Flowers Foods, alleging that the company failed to comply with various employment laws. Flowers Foods moved to compel arbitration based on the arbitration clause in the parties’ Distributor Agreement. Flowers Foods argued that Brock was not a transportation worker exempt from the Federal Arbitration Act and that Flowers Foods drivers, like Brock, are not engaged in interstate commerce because they distribute goods without crossing state lines.

The district court disagreed, holding that Brock belonged to a class of workers who haul goods on the final legs of interstate journeys. The Tenth Circuit affirmed, holding that workers who delivered goods once they had come to their final destination were not engaged in interstate commerce. Flowers Foods sought the Supreme Court’s review, arguing that drivers like Brock, who neither move goods across state lines nor interact with the vehicles that do, are not transportation workers engaged in interstate commerce under § 1 of the FAA.

During oral argument, Justice Sotomayor emphasized that workers need not cross state lines to engage in interstate commerce. Justice Jackson noted that Petitioners’ analysis involved characterizing workers as different based on what leg of travel they undertook. Justice Gorsuch questioned whether the Court should adopt a bright-line rule that delivery drivers are in interstate commerce only if they interact with the vehicles across the border or transport the goods across the border. Justice Alito posited a hypothetical for Respondents, asking whether someone delivering groceries from a store to a home would fit within the FAA’s exemption. Generally, the Justices’ questions focused on where exactly the line is drawn to deem someone a “last-mile” driver.

A decision is expected later this Term. Stay tuned for Dykema’s decision alert analyzing the Court’s opinion and its implications for the transportation and logistics sectors.

For more information, please contact Chantel Febus, James Azadian, or David Ter-Petrosyan.