In a Federal Arbitration Act (FAA) interpretation dispute, the Supreme Court unanimously held that a worker need not cross state lines to qualify for the FAA’s exemption for transportation workers “engaged in . . . interstate commerce.” Flowers Foods, Inc. v. Brock, 146 S. Ct. 1358 (2026). Flowers Foods, Inc. is a large baked goods producer that operates bakeries in nineteen states and distributes its products nationwide. Flowers Foods utilizes franchisees, such as Angelo Brock, a franchisee serving the Denver area, to pick up products from Flowers Foods’ warehouses and deliver them to local stores. In Brock’s case, all deliveries were made within Colorado. In 2022, Brock sued Flowers Foods, alleging that Flowers Foods underpaid him and other distributors. The distribution agreement between Brock and Flowers Foods included a mandatory arbitration clause; accordingly, Flowers Foods moved the Colorado federal district court to compel arbitration. The federal district court denied the motion, reasoning that it lacked authority to compel arbitration because Brock belonged to a class of workers engaged in interstate commerce and, therefore, fell within the FAA’s Section 1 arbitration exemption for workers engaged in interstate commerce. After the Tenth Circuit affirmed the district court’s decision, Flowers Foods petitioned the Supreme Court for a writ of certiorari.
The Supreme Court affirmed the Tenth Circuit’s decision, rejecting Flowers Foods’ proposed bright-line rule that a worker can never qualify for the FAA’s Section 1 arbitration exemption unless that worker personally crosses state lines or interacts with a vehicle that does. In affirming the Tenth Circuit’s decision, the Supreme Court first reasoned that the ordinary meaning of “engaged in . . . interstate commerce” at the time of the FAA’s enactment encompassed intrastate portions of a continuous interstate journey. The Supreme Court also relied on several on its own decisions spanning back to the nineteenth century, all of which analyzed similar language in the U.S. Constitution’s Commerce Clause and ultimately concluded that workers acting entirely within a single state can nonetheless be “engaged in interstate commerce” for purposes of the FAA’s Section 1 exemption. This is the second Supreme Court opinion in two years concerning the Section 1 exemption and Flowers Foods. In the Court’s 2024 opinion (also covered by the Franchise Memorandum), it held that Section 1 applies to all workers engaged in interstate transportation of goods, not just those workers employed in the transportation industry.