WASHINGTON, D.C. (May 28, 2026) – Small businesses are disappointed in today’s decision at the U.S. Supreme Court in the case Flowers Foods, Inc., et al. v. Angelo Brock. The Court expanded the applicability of the Residual Clause Exemption under the Federal Arbitration Act (FAA). NFIB joined several business groups in filing an amicus brief in the case arguing against broadened exemptions to arbitration agreements.

“Arbitration is an important solution for small business owners, many of whom do not have the time or resources to engage in convoluted legal disputes,” said Beth Milito, Vice President and Executive Director of NFIB’s Small Business Legal Center. “This expansive interpretation does not honor Congress’ intention with the FAA, and will leave small businesses nationwide vulnerable to lawsuits as a new standard is slowly determined at their expense.”

The case considered exemptions to the Federal Arbitration Act (FAA) and the enforceability of arbitration agreements. NFIB’s brief argued that expanding the application of the Residual Clause Exemption would create confusion, overburden the courts, and ultimately harm small businesses and their workers.

NFIB filed the brief with the U.S. Chamber of Commerce; the Retail Litigation Center; the National Retail Federation; the National Association of Wholesaler-Distributors, and the National Association of Manufacturers.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.