Supreme Court Expands Arbitration Exemption to More Transportation Workers
The Supreme Court clarified transportation worker exemptions under the FAA in a unanimous 2026 ruling.
Why it matters: This ruling sharpens the arbitration exemption's scope, affecting employment dispute strategies for labor lawyers and companies alike.
- The Supreme Court ruled on May 28, 2026, in Flowers Foods, Inc. v. Brock, clarifying FAA exemptions.
- Exemption applies to workers transporting goods, even if employed by non-transportation companies.
- This is the fourth Supreme Court ruling since 2019 refining FAA arbitration exemptions for workers.
- Justice Gorsuch noted the statutory text does not support narrower exemption interpretations.
On May 28, 2026, the U.S. Supreme Court issued a unanimous decision in Flowers Foods, Inc. v. Brock, further clarifying the scope of the Federal Arbitration Act (FAA) exemption for transportation workers. This marks the fourth time since 2019 that the Court has addressed arbitration exemption questions under the FAA.
The key holding confirmed that employees engaged in the transportation of goods qualify for the FAA's exemption from mandatory arbitration — even when they work for companies that do not themselves operate within the transportation industry. This means that delivery drivers and similar workers remain outside the FAA’s mandate, allowing them to pursue claims in court rather than being compelled into arbitration.
Justice Gorsuch, writing for the Court, emphasized that the statutory language does not support limiting the exemption only to workers employed directly by transportation companies. As he stated, "The statutory text cannot support such a rule." This interpretation underscores a broad view of who counts as a transportation worker for purposes of the FAA.
For employment and labor law practitioners, the decision carries significant implications. It affects how companies and employees negotiate arbitration agreements and manage dispute resolution strategies. Employers in industries relying on transportation workers must reconsider arbitration clauses in employment contracts to ensure compliance and effectiveness.
By affirming the exemption’s wide application, the Court has shaped a legal landscape where workers like delivery drivers enjoy greater access to courts, impacting class actions and collective employment claims.
By the numbers:
- 4 — times Supreme Court has addressed FAA arbitration exemptions since 2019
- May 28, 2026 — date of Supreme Court decision in Flowers Foods, Inc. v. Brock