You Signed an Arbitration Agreement on Day One. The Supreme Court Just Said It May Not Cover You.

You started a new job. On day one, alongside the I-9 and the direct deposit form, you signed an arbitration agreement. Your employer said all workplace disputes would be resolved through arbitration. You signed.

That agreement may be significantly weaker than your employer thinks, and a May 2026 Supreme Court decision is the reason why.

The Federal Arbitration Act governs most private arbitration agreements in California unless the agreement explicitly elects California law instead. Section 1 of the FAA exempts workers “engaged in foreign or interstate commerce” from FAA coverage entirely. Historically, courts read that exemption narrowly. If you never crossed a state line, many employers assumed the FAA applied and the arbitration agreement held.

In Flowers Foods, Inc. v. Brock, decided by the Supreme Court in May 2026, the Court held that a worker does not need to physically cross state lines to fall within the section 1 exemption. A worker handling goods that are part of a broader interstate journey, even if that worker’s own route stays entirely within one state, can be directly, necessarily, and actively engaged in interstate commerce. The Court focused on the nature of the overall transaction, not the worker’s geographic movement.

The practical reach of this decision is substantial in California, where a significant portion of the workforce handles goods, deliveries, food products, building materials, or manufactured items that moved across state lines before reaching the worker. Delivery drivers, warehouse workers, route drivers, last-mile couriers, and distribution-center employees are the population most directly affected. If those workers’ goods are part of an interstate chain, the FAA may not apply to their arbitration agreements, and an agreement that invokes only FAA authority may have no enforcement vehicle.

This is a fast-moving area of law where the specific facts of your role and the specific language of your agreement both matter. Whether your agreement is affected, and what that means for a claim you might have, depends on those details.

If the pattern sounds familiar, contact Michael Trust Law for a no-charge initial consultation. The facts determine whether you have a claim — and how much of a conversation that takes.

This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts. No lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication.