Today the U.S. Supreme Court granted the petition to review Brock v. Flowers Foods, Inc., 121 F.4th 753 (10th Cir. 2024), likely to resolve a circuit split over what it means to be engaged in interstate commerce for purposes of Section 1 of the Federal Arbitration Act (FAA) for certain transportation workers. Under Section 1 of the FAA, “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” are exempt. The key dispute in Brock is whether final-mile delivery drivers who deliver goods locally and do not transport goods across state lines are nonetheless engaged in interstate commerce under Section 1 because the goods they delivered have moved in interstate commerce. The First, Ninth, and Tenth Circuits have said yes; the Fifth and Eleventh Circuits have said no. The Supreme Court is now poised to resolve this conflict among the circuit courts. Oral arguments are expected in Spring 2026, with a decision by June.

The Supreme Court’s decision is likely to impact transportation providers that use arbitration to resolve disputes with their drivers (whether employees or independent contractors). Where the FAA applies, businesses benefit from more predictability with respect to the enforceability of key terms in arbitration agreements, including class waivers. That said, even if a given worker is exempt under the FAA, businesses may still pursue arbitration under state arbitration law. Some state arbitration laws are more favorable than others, however, which is why the applicability of the FAA (and, in turn, the scope of the Section 1 exemption) can play a significant role in the design of arbitration programs and a business’s efforts to compel arbitration of claims filed in court.

For questions regarding this development and how it stands to impact the future of the transportation industry, contact Braden Core, Prasad Sharma, Andy Butcher, Chip Andrewscavage, or Jim Eckhart.