As the U.S. Supreme Court begins its new term, several employment-related petitions await the Court’s consideration. One of those petitions is Flower Foods v. Brock, which follows a 2024 decision by the Court and involves important implications for companies that employ “transportation workers.”
In 2024, the Supreme Court decided the case of Bissonnette v. LePage Bakeries Park Street.[1] There, distributors of Flower Foods, Inc., the country’s second largest producer of packaged bakery goods, sued the company in a putative class action for violating state and federal wage laws. Flower Foods moved to compel arbitration under the Federal Arbitration Act (FAA or “the Act”), arguing that its contracts with the distributors required the distributors to arbitrate their claims individually. While the FAA provides that arbitration agreements are generally enforceable, the Act also contains an exemption in Section 1 for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Id. The question before the Supreme Court was whether a “transportation worker” must work for a company in the transportation industry to qualify for the exemption.
In a unanimous decision, the Supreme Court held that there was “no such requirement.”[2] The Court reasoned that the language in Section 1 of the FAA focuses on the “performance of work” rather than the “industry of the employer.”[3] In other words, the relevant question is what the employee does for the employer, not what the employer does generally. Thus, a transportation worker does not need to work for an airline or railroad, for example, to qualify for the exemption. Id. at 256. It is enough that the employee plays a “direct and necessary role in the free flow of goods across borders.”
The Supreme Court noted that it was not expressing any opinion on whether the distributors were transportation workers or “engaged in foreign and interstate commerce.” But in another putative class action involving Flower Foods, Brock v. Flowers Foods, Inc.,[4] the U.S. Court of Appeals for the Tenth Circuit affirmed the district court’s denial of a motion to compel arbitration and addressed the issue of interstate commerce. In that case, Flower Foods conceded that Bissonnette foreclosed its argument that the named plaintiff was not a “transportation worker” because he does not work in the transportation industry. But the company still argued that the plaintiff was not engaged in interstate commerce because he never crossed state lines to deliver any goods in connection with his business. The Tenth Circuit disagreed, holding that, while the plaintiff did not cross state lines to deliver the goods, he was engaged in interstate commerce because his route represented the “final leg” of an interstate journey.[5]
Flower Foods has petitioned the Supreme Court again, this time to determine whether workers who locally deliver goods that travel in interstate commerce are transportation workers for purposes of the FAA’s Section 1 transportation workers exemption. It is unclear whether the Supreme Court will take up the petition and, if so, whether it will ultimately side with the Tenth Circuit and accept a more expansive view of interstate commerce.
But, if the Court takes up the petition and affirms the Tenth Circuit’s decision, it will signal yet another expansion of the FAA’s exemption under Section 1. Employers with transportation or delivery workers should monitor this case closely and evaluate how it may affect their arbitration agreements.
[1] 601 U.S. 246 (2024)
[2] Id. at 252.
[3] Id. at 253.
[4] 121 F.4th 753, 757 (10th Cir. 2024).
[5] Id. at 769.
