NO CROSSING THE LINES FOR
TRANSPORTATION WORKER’S
ARBITRATION EXCEPTION
By
Prof. Anthony Michael Sabino
Having just celebrated its centennial, the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (the “FAA”) stands as the granitic cornerstone of a strong federal policy favoring arbitration. See, inter alia, Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022). Its most powerful dictate by far is that agreements to arbitrate “shall be valid, irrevocable, and enforceable.” FAA, supra, at § 2 (emphasis supplied). See, i.e., Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63 (2019).
That unequivocal command is without exception—well, almost. When Congress promulgated the FAA in 1925, it exempted from arbitration all “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” FAA, supra, at § 1 (emphasis supplied). This “transportation worker exception” has generated a plenitude of U.S. Supreme Court decisions, including a trilogy constructed over the last decade.
And now that trio is a quartet. In Flower Foods, Inc. v. Brock, 608 U.S. ___ (May 28, 2026), the Justices unanimously held that employees need not cross state lines or interact with vehicles that do in order to come within the statutory exemption from arbitration. To fully appreciate this newest landmark, a brief exposition of its antecedents is required.
The Trilogy
The first leg of the extant trilogy is New Prime Inc. v. Oliveira, 586 U.S. 105 (2019). There Justice Gorsuch opined for a unified bench that judges, not arbitrators, decide to whom Section 1 applies, and, furthermore, that independent contractors come within the law’s ambit.
The second pillar is Southwest Airlines v. Saxon, 596 U.S. 450 (2022) (“Saxon”), where a united Court decreed that airline cargo handlers are workers in interstate commerce who cannot be compelled to arbitrate. It is “the actual work…typically carr[ied] out” by the employee which qualifies her for the transportation worker exception, a matter which Justice Thomas presciently observed becomes increasingly difficult to resolve the more distant the worker is from the stream of interstate commerce. Id. See also Sabino, “The FAA Keeps on Flying: The Supreme Court and ‘Southwest,’” 268 New York Law Journal, p. 4, cl. 4 (July 28, 2022).
The triad was made complete with Bissonnette v. LePaige Bakeries Park St., LLC, 601 U.S. 246 (2024). Acting yet again with unanimity, the Court determined that a “transportation worker” need not work in the transportation industry per se in order to qualify for the arbitration exemption, with Chief Justice Roberts emphasizing that the FAA’s focus is upon the employee’s work, not her employer’s business. Id. See also Sabino, “Exempting ‘Transportation Workers’ from Arbitration: ‘Bissonnette’,” 272 New York Law Journal p.4, cl.4 (July 22, 2024).
Back to the Bakery
Flowers Foods is reminiscent of Bissonnette. The titular litigant is one of the Nation’s largest purveyors of baked goods, featuring iconic brands such as “Wonder Bread,” “Krimpets,” and “Honey Buns.” Angelo Brock had contracted to distribute the petitioner’s wares in the Denver area, and his agreement with the company included an arbitration clause.
When Brock commenced litigation claiming that he had been underpaid, the bakery sought to enforce the arbitral accord. Brock countered that he fell within the FAA’s statutory definition of a “transportation worker,” and was therefore free to proceed with his lawsuit.
The instant controversy would pivot upon a singular fact: “Brock picks up Flowers’s products from a warehouse in Colorado and delivers them to local stores, all without leaving the State” (emphasis supplied). Consequently, the Justices would consider a solitary question: whether a worker can qualify for the Section 1 exemption “if he never crosses state lines and never interacts with vehicles that do.”
“Make this case the fourth”
A unanimous Court first put Flowers Foods in perspective. “Make this case the fourth” recent addition to the pantheon of transportation worker exception landmarks.
The bakery’s paramount contention was that the arbitration exemption is applicable only to employees who cross state frontiers or interact with vehicles that do. “That theory is incorrect,” declared the high bench. Saxon had already made plain that the statute’s text lacks any such prerequisites, and the supreme tribunal was unwilling to condition the transportation worker exception “on a game of tag with vehicles” traversing local boundaries.
As is his wont, Justice Gorsuch employed multiple dictionaries to discern the plain meaning of “engage” and “interstate commerce” as found in Section 1. He concluded that “[n]othing in those terms requires an individual to cross state lines or interact with a vehicle that does.” As point in fact, the FAA very much contemplates workers moving goods intrastate as an essential component of commerce between the states.
The learned jurist then offered up a neat hypothetical. A baked goods firm employs three truckers. The first delivers her cargo to the boundary of State A without crossing it. A second driver in a different vehicle then hauls the foodstuffs a mere ten feet across the state line into State B, then departs. Finally, a third worker in yet another truck distributes the merchandise within the borders of State B.
“Cross-Or-Tag” Rule Rejected
The petitioner urged the supreme tribunal to adopt what Justice Gorsuch subsequently labeled a “cross-or-tag” rule, which would exempt the intermediate trucker from arbitration, but not the first and third drivers, for reason that the latter two had never crossed a state frontier or even touched a vehicle that had. “But that cannot be right,” because all three employees irrefutably “played a direct, active, and necessary part” in transporting the goods in the flow of interstate commerce.
Nor was this holding without precedent; indeed, quite to the contrary. In a Reconstruction Era case decided more than fifty years before the FAA was promulgated, the Supreme Court of that bygone era had decreed that the character of a transaction in interstate commerce remains unaltered by the mere fact that some of the workers transporting the goods act entirely within the bounds of one state. See The Daniel Ball, 77 U.S. 557 (1871) (steamship confined to the inland waters of a single state was transporting goods in interstate commerce). See also Norfolk & W. R. Co. v. Pennsylvania, 136 U.S. 114 (1890) (the intrastate segment of an interstate railroad was undeniably connected with interstate commerce). In other words, the proffered hypothetical “is hardly a hypothetical at all.”
In response to the bakery’s argument that those Nineteenth Century landmarks were Commerce Clause cases, and, furthermore, predated the arbitration regime by decades, the high Court was straightforward. “Fair enough.” The Justices circumspectly cautioned that there was no suggestion today that Section 1 “is coterminous with the scope of the Commerce Clause as it was interpreted at the time of the FAA’s adoption in 1925.” See also Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (the arbitration exemption applies only to transportation workers).
Even so, Flowers Foods would not be blinded to the meaning of “engaged” and “interstate commerce” as articulated in precedents issued both before and around the time of the adoption of the arbitration regime. “[C]ases using the same language as § 1, or formulations very close to it, offer probative evidence of what an ordinary person at the time of the FAA’s enactment would have understood its terms to mean.”
Finally, the bakery hinted that there were other reasons why the transportation worker exception did not apply. For one, the relevant franchise agreement was not with the driver, but with an independent company which he owned. Compare Silva v. Schmidt Baking Distribution, LLC, 162 F.4th 354 (2d Cir. 2025), cert. denied, 608 U.S. ___, 2026 WL 1377157 (May 18, 2026), analyzed at Sabino, “Back to the Bakery: The Second Circuit and the FAA’s ‘Transportation Worker Exception,’” 275 New York Law Journal p.4, cl.4 (March 18, 2026). In addition, the trucker had purchased and taken legal title to the merchandise before selling it locally.
“The trouble,” stated Justice Gorsuch, is that while the petitioner made passing reference to those factoids, it “does not ask us to decide their legal significance.” Instead, the bakery gambled everything on the high bench adopting the aforementioned bright line “cross-or-tag” rule. “And whatever other limits § 1 may or may not contain, we do not see how the statutory text can support” that formulation.
Ruling with the same certitude demonstrated in Saxon, the Flowers Foods Court reaffirmed the former’s maxim that “individuals can sometimes be direct, necessary, and active participants in moving goods,” and therefore be exempt from arbitration, “without crossing state lines or interacting with vehicles that do.”
Conclusion
Ironically, the final edict of Flowers Foods is best expressed in its opening. “The Federal Arbitration Act requires courts to enforce many private arbitration agreements. But not all.” The transportation worker exception aptly illustrates both axioms.
Justice Gorsuch was eminently correct in positing this newest FAA precedent as “the latest in a line posing questions about the scope of that exemption” from arbitration. But it surely will not be the last. The strong federal policy favoring arbitration, the sacrosanct nature of the century-old transportation worker exception, and the yet to be explored nuances of Section 1 make it a certainty that there are more Supreme Court adjudications in the offing.
Prof. Anthony Michael Sabino, partner, Sabino & Sabino, P.C., is also a Professor of Law, Tobin College of Business, St. John’s University. Anthony.Sabino@sabinolaw.com.
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