* Court weighing when local driving is "interstate

commerce"

* Arbitration exemption allows class action claims

* Justices have backed broad exemption in recent cases

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' ( FLO ) 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 ( FLO ) 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 ( LUV ) 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 ( LUV ). 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 ( LUV ) 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 ( LUV ) 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 ( FLO ) v. Brock, U.S. Supreme Court, No.

24-935.

For Flowers Foods ( FLO ): 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 ( LUV ) cannot force

wage suit into arbitration

(Reporting by Daniel Wiessner in Albany, New York)