Supreme Court narrowly interprets Federal Arbitration Act for intrastate bakery drivers

The Supreme Court last week narrowly interpreted the Federal Arbitration Clause -- which favors arbitration and usually produces court rulings for management, which does not want cases in court but instead through the private arbitration process -- to mean that certain bakery and junk food drivers cannot be forced into arbitration when management denies them a proper paycheck.

The case is Flowers Foods v. Brock, issued on May 28. Under the FAA, you cannot compel arbitration in disputes involving the "contracts of employment" of any class of workers "engaged in ... interstate commerce." Since Flowers distributes food all over the country, requiring its drivers to cross state lines, the question is whether the plaintiffs may pursue their claims in open court instead of arbitration -- which will grant you a ruling, albeit on an expedited basis with more limited discovery, no jury, and where the arbitrators' rates are often paid by the employer. See why plaintiffs don't like arbitration? They dislike arbitration so much that they will take this issue to the Supreme Court (an expensive and time-consuming process), which issues a ruling long after the arbitrator might have resolved the case once and for all.

What makes this case unique is that plaintiff did not actually cross state lines in delivering the baked goods. Instead, his "intrastate route formed a constituent part of the ... interstate journey of Flowers's goods from out-of-state bakeries to their intended destinations at retain stores." On these facts, can plaintiff still avoid arbitration under the statute? A unanimous court rules that, under the FAA, workers qualify as engaging in interstate commerce even if they never cross state lines and never interacts with vehicles who cross state lines. That's plaintiff Brock. He gets to litigate his wages claim in court, not arbitration.

The Supreme Court reaches this holding after analyzing, through dictionaries, what certain language in the FAA really means, words like "engage," which the dictionary interpreted to "take part in something or to be employed or involved in that thing." "Engage" has a broad definition, and we presume that Congress had that broad definition in mind when it enacted the FAA many years ago. 

Justice Gorsuch writes that "nothing in those terms requires an individual to cross state lines or to interact with a vehicle that does. "Interstate commerce includes transporting products between points in one state and points in another state. That involves not just crossing state lines, but intrastate activity too. Though a continuous carriage may begin in one State and end in another, much of the journey can take place within the limits of a single state. And at least sometimes, a person can take part, be employ[ed], or be involve[d] in that continuous journey without leaving a State or touching vehicles that do." No case law supports this holding, by the way. It all comes from what must be a hell of a dictionary collection at the U.S. Supreme Court library. I say this because the Court often reviews the dictionary -- including those published at or around the time a certain statute was enacted -- to understand what Congress must have intended in enacting certain statutes.

This case is the fourth in a recent like of cases narrowly interpreting the FAA to exempt certain transportation industry workers from mandatory arbitration. The Court writes:

In recent years, we have had occasion to address the scope of §1’s exemption no fewer than three times. In each case, we have rejected efforts to cabin its reach. First, in New Prime Inc. v. Oliveira, 586 U. S. 105 (2019), we held that the “contracts of employment” §1 embraces include contracts governing independent contractors, not just employees. Then, in Southwest Airlines Co. v. Saxon, 596 U. S. 450 (2022), we held an airline worker who loaded and unloaded cargo fit within §1’s exemption even though she did not fly planes or otherwise cross state lines. Finally, in Bissonnette v. LePage Bakeries Park St., 601 U.S. 246 (2024), we held that a worker can fall under §1 whether he is employed in  the “transportation industry” or some other, so long as his work “play[s] a direct and necessary role in the free flow of goods across borders.” Make this case the fourth.