Delivery drivers, particularly those performing “last-mile” deliveries, perform a crucial function in our society: delivering products for the final leg of their journey, often from a warehouse to a commercial location. But last-mile drivers have long found themselves in a bit of a bind when trying to assert their legal rights in court against their employers for things like underpayment of wages, discrimination, and unlawful deductions from their pay. Fortunately, a rash of recent legal developments have created new opportunities for last-mile drivers to meaningfully pursue their legal claims in court.
For years, employers of last-mile drivers have used all sorts of dirty tricks to keep their drivers’ employment claims out of court. These tricks include things like misclassifying drivers as independent contractors rather than employees, requiring drivers to form their own companies and then claiming to contract with the companies rather than the drivers for the deliveries, and forcing drivers to sign “arbitration agreements” as part of their hiring onboarding process that require drivers to bring legal claims in private (and often costly) arbitration proceedings rather than in court. Fortunately, recent court rulings have helped to undercut these unscrupulous methods and have created new opportunities for last-mile drivers to pursue their claims in court.
Employee Misclassification and Forcing Drivers to Incorporate
For starters, employers often misclassify last-mile drivers as independent contractors rather than employees in order to obscure their rights and avoid providing protections and benefits entitled to employees. At the beginning of their employment, the companies will require drivers to sign contracts saying they agree that they are independent contractors rather than employees. Many employers even require the drivers to form their own corporate entities (usually LLCs), and then have the drivers sign contracts between these corporate entities and the employer. These employers will even brand themselves as “third-party logistics companies” or “freight brokers” in an effort to disguise their true business as delivery companies and make the drivers’ work seem more removed from the companies’ core business functions.
Luckily, recent court decisions have helped clarify in many instances that last-mile delivery drivers perform work for these companies as employees rather than independent contractors, and so irrespective of their contracts, these drivers have been held to be employees with all of the legal rights and protections afforded to employees under the law. In Massachusetts, regardless of what an employment contract says, a worker is automatically presumed to be an employee unless the employer can demonstrate:
- The workers perform their services free from the employer’s control and direction, both under their contracts and in actuality;
- The work being performed is outside the usual course of the business of the employer; and,
- The worker is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
This is commonly referred to as the “ABC Test,” and if an employer is unable to prove just one of these, the driver is legally considered an employee and not an independent contractor. While employers may try to convince drivers that their contract governs their employment status, courts in Massachusetts have continuously rejected this approach, making clear that the actual nature of the employment relationship is what governs.
At the same time, Massachusetts courts have also rejected employers’ attempts to quash lawsuits on the basis that drivers’ contracts were between two business entities — the employer, and a corporate entity (usually an LLC) that the employer required the driver to form in order to perform delivery services. Employers regularly force last-mile drivers to form their own companies and then sign contracts with these “companies” to deliver goods. Courts in Massachusetts and around the country have regularly made clear that requiring drivers to take the corporate form does not foreclose their legal status as an employee of the corporation or their right to the protections of employees just because their agreement is technically between the company and the driver’s LLC.
The Federal Arbitration Act and Forced Arbitration
Last-mile delivery drivers have, until very recently, faced another hurdle when attempting to bring cases in court against their employers: the Federal Arbitration Act (FAA). Under this law, parties can, by contract, agree to bring legal claims in private forums (called “arbitration”), and a court must generally dismiss cases where a party agreed to arbitrate but then brought a case in court. Employers routinely require last-mile delivery drivers to sign arbitration agreements as part of their hiring and onboarding process.
But the FAA has an important exception: “contracts of employment” for transportation workers “engaged in foreign or interstate commerce” are exempt from the law. To this end, three recent court decisions have created new opportunities for last-mile drivers to have their claims heard in court rather than in arbitration, which can be costly and favor employers.
First, in Bissonnette v. LePage Bakeries Park St., LLC, the U.S. Supreme Court clarified in 2024 what it meant to be a “transportation worker” under this exemption. There, the Supreme Court held that a worker does not need to be employed in the “transportation industry” in order to qualify for the exemption; instead, what matters is the type of work being performed. Thus, the Court held, the last-mile delivery driver plaintiffs could be exempt even though they worked for a bakery company because their work was transporting goods.
Next, on May 28, 2026, the U.S. Supreme Court held in Flowers Foods, Inc. v. Brock that last-mile delivery drivers can be “engaged in foreign or interstate commerce” and thus exempt from the FAA even if the driver never personally crosses state boundaries or touches vehicles that do.
Finally, courts — including in Massachusetts — have recently held that arbitration agreements signed between an employer and a driver’s corporate entity (like an LLC), or separate arbitration agreements signed along with other employment contracts as part of the onboarding process, can still qualify as “contracts of employment” under this FAA exemption. In Silva v. Schmidt Baking Distribution, LLC, decided in late 2025, the U.S. Court of Appeals for the Second Circuit “decline[d] to allow employers to circumvent Congress’s exception of transportation workers from the FAA’s reach by requiring those workers to take the corporate form.” It thus held that last-mile delivery drivers’ agreements with their employers were “contracts of employment” for the purposes of the FAA’s exception and affirmed the lower court’s decision that the drivers’ claims could be heard in court.
In January of 2026, the District of Massachusetts federal court adopted this reasoning in Martins v. Capstone Logistics, LLC. There, the court held that where “a plaintiff is forced to create a sham corporation to facilitate a defendant’s attempted runaround of the transportation worker exemption, it is appropriate to treat the individual plaintiff and her corporate entity interchangeably,” and determined the contracts between the driver’s corporate entity and other businesses constituted “contracts of employment” for the purposes of the FAA’s exemption. Yet the court went further, also explaining that while the last-mile driver plaintiff had signed standalone arbitration agreements (on behalf of her LLC) with companies doing business with the employer that purported to require arbitrating her claims against the employer, these agreements nevertheless constituted “contracts of employment” because of the context in which they were signed. The court explained: “[E]ven though the written agreements were signed by different parties, none of which are Capstone, the overlapping substance of those agreements; the fact that one agreement refers, at least implicitly, to the other; and the circumstances surrounding their contemporaneous execution justify treating them as a collective contract of employment.”
Taken together, these rulings mean that last-mile delivery drivers have new opportunities to bring employment claims in court.
Need Advice?
Navigating all of these issues can be complicated, especially with the legal landscape rapidly shifting. If you are a last-mile delivery driver who believes you may have an employment-related claim against your employer, don’t hesitate to contact us for a free case assessment.