The Supreme Court is to determine whether truck drivers for the company that makes Wonder Bread are considered transportation workers who are exempt from the Federal Arbitration Act (FAA).
The FAA, enacted in 1925, contains a provision that the justices wrestled with during oral arguments on Feb. 20. The provision shields from compulsory arbitration all “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
The highly technical case comes after the Supreme Court held in Southwest Airlines Co. v. Saxon (2022) that cargo loaders for airplanes are a “class of workers engaged in foreign or interstate commerce” and are therefore allowed to opt out of arbitration. The occasional border crossing isn’t enough to make interstate transportation a central component of an employee’s job, the court ruled at the time.
Companies often prefer arbitration to the courts, reasoning that the process resolves cases with greater speed and reduced expense. Some consumer advocates prefer the courts because, in their view, the government’s judicial system provides private citizens and consumers with more options and is less likely to side with the companies being sued.
In the case at hand, Bissonnette v. LePage Bakeries Park St. LLC, lead petitioner Neal Bissonnette is one of several truckers who performed services for the respondent, Maine-based LePage Bakeries, which is owned by Flowers Foods Inc.
Mr. Bissonnette and other drivers delivered baked goods such as Wonder Bread and Tastykake under distribution agreements with Flowers and its subsidiaries LePage and CK Sales Co.
The truckers claimed in a proposed class action lawsuit that Flowers incorrectly classified them as independent contractors when, in reality, they were employees entitled to extra protections under state and federal wage laws.
The drivers were responsible for hauling products to stores in Connecticut from a Flowers regional warehouse.
“And while Flowers required the drivers to sign contracts purporting to deem them ‘independent’ distributors, their actual job was to transport Flowers’ goods under Flowers’ control. The company has never disputed that most of the plaintiffs’ work hours were, in fact, spent transporting goods,” the petition reads.
In 2019, the drivers filed their lawsuit, claiming that Flowers misclassified them as independent contractors. They were upset after the company decided that because they were independent contractors, it was free to “withdraw its own operating expenses from its drivers’ paychecks, charge them for the privilege of working for the company, and decline to pay them overtime, none of which, the [drivers] allege, is legal.”
Flowers tried to force the dispute into arbitration based on an arbitration clause in the distributor agreement drivers signed with the company. The drivers opposed this move, saying they were exempt from the FAA.
They argued that truck drivers who transport goods from one state to another or even from one point to another point in a single state had long been considered to be transportation workers “engaged in interstate commerce.” This means that their contracts of employment are exempt from the FAA, they said.
However, a federal district court disagreed, finding that even though they spent most of their working hours delivering goods, the drivers were not transportation workers because the Flowers contract deemed them to be independent businesses that carried out other tasks in addition to transportation.
A divided panel of the U.S. Court of Appeals for the Second Circuit found in 2022 that the employees concerned were not eligible for the arbitration exemption in the FAA because Flowers Foods is “in the bakery industry, not the transportation industry.”
The full Second Circuit refused to rehear the case in February 2023. A circuit split was created three months later, when the U.S. Court of Appeals for the First Circuit ruled that a different set of Flowers Foods drivers with a wage dispute were covered by the exemption.
At the oral arguments on Feb. 20, the truckers’ attorney, Jennifer Bennett of San Francisco, said that when the Supreme Court ruled in 2022 in Southwest Airlines Co. v. Saxon, the court “carefully examined the text and history of the Federal Arbitration Act’s worker exemption, and it held that the exemption applies to ‘any class of workers directly involved in transporting goods across state or international borders.’”
Flowers wants the court “to add an additional unwritten requirement that the worker’s employer must sell transportation,” the lawyer said.
“According to Flowers, if the thousands of truck drivers who work full-time hauling its goods were only ... employed by a trucking company that Flowers had hired to do so, then they'd be exempt transportation workers,” Ms. Bennett said.
‘Nothing Like Railroad Employees or Seamen’
The company’s attorney, Tracy Lovitt from New York, pushed back, arguing that the drivers are misinterpreting the law.The drivers “buy Flowers’ bread,” she said.
“They pay Flowers for product. Then they take title to the bread, and it is only after they take title to the bread that they then move it intrastate in order to sell it to retailers for a profit,” Ms. Lovitt said.
“They are under no personal obligation to move anything. They look nothing like railroad employees or seamen.”
When the Second Circuit rendered its judgment, it looked at pricing structures and revenue figures to find that Flowers Foods wasn’t in the transportation industry, Chief Justice John Roberts pointed out to Ms. Lovitt.
This approach is problematic because it imposes “a difficult burden” and would seem to produce “a lot of different results” in various courts, he said.
Is Amazon in “the transportation business just because it has a fleet of planes” that it uses to move goods, the chief justice asked.
Justice Samuel Alito also raised concerns about Ms. Lovitt’s arguments.
“It may have been straightforward for the Second Circuit to apply its test to the facts of this case, but will it be straightforward in other cases? Will it not involve some very difficult line-drawing problems?” he said.
The Supreme Court is expected to hand down a decision in Bissonnette v. LePage Bakeries Park St. LLC by June.
