Clarifying the FAA’s Transportation Exemption—Yes, Even for the Wonder Bread Truck Driver

Earlier this month, the United States Supreme Court issued a unanimous decision in Bissonnette v. LePage Bakeries Park St., LLC, Dkt. No. 23‑51, 601 U.S. ___ (2024), resolving a long‑standing question under the Federal Arbitration Act (FAA): Must a worker be directly employed by a transportation company to qualify for the FAA’s transportation worker exemption?

The answer: No. The Court held that individuals “actively engaged in interstate transportation” are exempt, regardless of their employer’s industry. Even a Wonder Bread delivery truck driver—who is delivering fresh loaves across state lines—can fall under this exemption.

Why this case matters

Since the FAA was enacted in 1925, Section 1 has exempted “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Courts, agencies, and litigants have grappled with who exactly qualifies.

Lower courts have been divided: Some required transportation‑industry employment; others took a functional approach, focusing on the work itself. A key flashpoint was whether long‑haul trucking drivers employed by a bakery or supermarket chain could claim the exemption.

The Wonder Bread driver at issue

Plaintiff delivery drivers were employed by LePage Bakeries Park St., LLC, makers of Wonder Bread. They worked on freight trucks, crossing state lines to deliver fresh bread to supermarkets. Arbitration agreements in their employment contracts would ordinarily compel disputes to private forums. The drivers argued that because they were actively engaged in interstate commerce, such clauses were forbidden under the FAA's exemption.

The Second Circuit disagreed—holding that because the workers were technically part of the baking industry, not a transportation company, they had no exemption. But the Supreme Court saw it differently.

The Supreme Court’s unanimous ruling

Writing for the Court, Justice Sotomayor emphasized:

“The exemption applies to classes of workers actively engaged in interstate commerce—not to classes of employers. It does not matter whether the employers are in transportation or, like LePage, in an unrelated industry.”

To qualify, an employee must spend even a small percentage of time in interstate transportation activities. The Court noted the cautious nature of this holding: if future plaintiffs work entirely within one state, they may still fall within FAA coverage based on that fact.

Implications for Wonder Bread drivers—and others

This ruling brings clarity to a long‑disputed question. Previously, delivery workers employed by non‑transportation companies could find themselves bound by arbitration agreements that they would otherwise be exempt from. That led to inconsistent treatment depending on employer structure and geographic jurisdiction.

Now, under Bissonnette, the focus shifts to what the employee does—not who the employer is. The result:

• Workers performing interstate transport tasks (like delivering Wonder Bread across state lines) are exempt from FAA arbitration unless the transportation is purely intrastate.

• Employers cannot avoid FAA exemptions by categorizing employees under a non‑transport industry.

• The decision harmonizes the law by adopting a functional approach to identify exempt workers, rather than formal industry classifications.

But questions remain—what counts as “interstate”?

The court noted that the exemption depends on interstate transportation, not merely interstate employer or business scope. But it raised a new question—what threshold counts as "interstate"?

• Is making one cross‑state delivery per month enough?

• Does transporting bread over a state line while empty–returning with no product count?

• What about long‑haul midloaded stops that cross multiple jurisdictions?

The Supreme Court acknowledged the tension and left the issue for future resolution. If an employee’s work stays entirely within one state—even a physically close one—they may still be subject to arbitration clauses under the FAA.

Strategic takeaways for practitioners

For employers:

• Revise employment agreements to distinguish between exempt transportation roles and other positions.

• Monitor work duties of delivery drivers—if any involve interstate cross-loading or multi–state travel, arbitration clauses may not apply.

• Track and document routes and deliveries to support or challenge exemption status as freight movement varies.

For employees and counsel:

• Question arbitration clauses where work duties involve transportation across state lines—even if the company is not a shipping firm.

• Collect records—e.g., GPS logs, delivery routes—documenting interstate travel to support exemption claims.

• Watch for intrastate delivery patterns or one-off routes that could be litigated in future cases with the issue squarely in focus.

Why it matters for dispute resolution

Justice Scalia famously noted that statutes should not be tied up in technicalities when it comes to fundamental rights like access to court. Here is what Bissonnette accomplishes:

• Restores access to judicial forums for workers delivering across state boundaries—even from bakers, not trucking companies.

• Protects fundamental rights of transportation workers by ensuring consistent treatment across employers.

• Gives arbitral counsel clarity—now demands can be made where warranted under the exemption, not just where the paperwork says "transportation company."

API – picture metadata – might be small, but the underlying point is not. Whether driving a Wonder Bread truck or a loading dock forklift, the question is what you actually do—not whose logo is on your uniform.

Looking forward: arbitration in transition

This decision reflects a broader shift in FAA interpretation: courts are increasingly protecting litigants' access to judicial forums rather than expanding arbitration obligations.

• The Bissonnette decision may lead to more class actions and court cases filed by plaintiffs whose arbs were invalidly compelled.

• Employers must be more granular in arbitration agreements—and especially in how they define exempt workers.

• Arbitration providers may begin reviewing clause design and confirm that employees have no right to opt-out or contest—now a stronger legal posture.

Client advisors, counsel, and institutions that rely on clear common-sense approaches will now lead the field—and party stakeholders will respond accordingly.

Wonder Bread or Not: Nationwide ADR has you covered

Whether your dispute involves bakery logistics, trucking contracts, or the Wonder Bread driver delivering your morning loaf, Nationwide ADR provides clarity—whether litigating or designing arbitration agreements.

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To explore dispute support services—including contract design and exemption mapping—visit NationwideADR.com.