US Supreme Court weighs bid to narrow worker arbitration exemption
By Daniel Wiessner
March 25 (Reuters) - The U.S. Supreme Court on Wednesday once again waded into a legal battle over who qualifies for an exemption from having to arbitrate work-related legal claims, taking up a case involving a "last mile" driver for the maker of Wonder Bread.
The justices heard arguments in Flowers Foods' appeal of a 10th U.S. Circuit Court of Appeals ruling that deepened a circuit split in finding that workers do not need to cross state lines or interact with vehicles that have in order to be exempt from the Federal Arbitration Act.
The issue is technical but of great importance to the many companies that rely on fleets of drivers in complex modern supply chains. Workers typically cannot bring class action claims in arbitration, and many individual wage-law claims are not worth the cost of litigating them.
The 10th Circuit ruling shielded Angelo Brock, who contracted with Flowers to deliver its products from local warehouses to supermarkets in Colorado, from having to arbitrate claims that Flowers misclassified drivers as independent contractors rather than employees and deprived them of the minimum wage and overtime pay.
The FAA generally requires the enforcement of otherwise valid arbitration agreements, which more than half of private-sector U.S. workers sign, but exempts transportation workers engaged in interstate commerce.
In a pair of unanimous rulings over the last four years, including one involving a Flowers Foods subsidiary, the Supreme Court has held that the FAA exemption is not limited to workers in the transportation industry and that it applies to Southwest Airlines baggage handlers who load and unload planes that cross state lines.
Traci Lovitt, Flowers' lawyer, told the court on Wednesday that the bakery's case was not comparable to the one involving Southwest. Baggage handlers are key to moving goods between states, she said, while drivers like Brock only come into the picture after an interstate journey has ended.
It was not clear how the court's conservative majority was leaning, but the three liberal justices — Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson — were skeptical, each noting that Brock was ultimately responsible for getting products that moved in interstate commerce to Flowers' intended customers.
“Transportation ends when a good is unloaded,” Lovitt said during an exchange with Sotomayor.
“And that’s what Mr. Brock does as the last-mile driver for Flowers,” Sotomayor responded.
"The question is, when does the interstate journey end? And it ends at the warehouse” where Brock later picks up the bread, Lovitt said.
Jennifer Bennett, who represents Brock, said that Flowers misread the Southwest Airlines ruling to place too much importance on the plane, rather than the nature of the work being performed. Like the baggage handlers, Brock was instrumental in getting goods shipped through interstate commerce to their final destination, she said.
Bennett represented the plaintiff in the Southwest case and squared off with Lovitt in the 2024 case Bissonnette v. LePage Bakeries Park St, where the court held that the FAA exemption can apply to any transport workers regardless of their employer's industry.
Justice Neil Gorsuch on Wednesday predicted that the court would take up related issues in future litigation, and possibly in the same case. He said that a crucial question was whether workers who take legal possession, or title, of the goods they are transporting are still exempt from the FAA.
"And we will get to see you back here, again and again and again," Gorsuch said to Bennett.
The case is Flowers Foods v. Brock, U.S. Supreme Court, No. 24-935.
For Flowers Foods: Traci Lovitt of Jones Day
For Brock: Jennifer Bennett of Gupta Wessler
Read more:
US Supreme Court lets broad array of transport workers sidestep arbitration
US Supreme Court turns away trio of cases on worker arbitration exemption
U.S. Supreme Court rules Southwest Airlines cannot force wage suit into arbitration
