Reported / Citable
Background
Sinedou Tuufuli was hired by West Coast Dental Administrative Services in August 2017 as a collector and customer service representative. At the time of her hire, she electronically signed an arbitration agreement covering essentially all employment-related disputes. The agreement contained a class-action waiver and an explicit choice-of-law provision stating that the agreement ‘shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.’
In April 2023, Tuufuli sued West Coast Dental, asserting eight individual and class wage-and-hour claims under the Labor Code and Business and Professions Code. West Coast Dental moved to compel arbitration of her individual claims and dismiss the class claims under the agreement’s class waiver.
The trial court granted the motion. Tuufuli appealed, raising a single question: did the trial court correctly find the FAA — rather than the California Arbitration Act — governs the agreement?
The Court’s Holding
The Court of Appeal affirmed. The court explained that there are two paths under which the FAA can govern an arbitration agreement: (1) the agreement actually involves interstate commerce (a substantive nexus inquiry), and (2) the parties have agreed by contract that the FAA will govern. Either path is sufficient.
Here, the parties expressly chose the FAA as their governing law. That contractual choice resolves the question. The court did not need to evaluate whether Tuufuli’s day-to-day duties involved interstate commerce, because California enforces parties’ contractual choices of arbitral procedure unless those choices are contrary to public policy.
Because the FAA governs, the agreement’s class-action waiver is enforceable and the order compelling individual arbitration and dismissing class claims stands.
Key Takeaways
- An arbitration agreement that expressly chooses the FAA as governing law will be enforced under the FAA, even if the underlying employment is intrastate.
- California courts respect contractual FAA choices and will not require a separate factual showing of interstate commerce when the agreement makes the choice explicit.
- FAA-governed class waivers in employment arbitration agreements remain enforceable in California, consistent with federal preemption doctrine and post-Viking River jurisprudence.
- Employees and counsel attacking arbitration agreements should focus on traditional contract defenses (unconscionability, formation) rather than fighting the FAA-governs question when the agreement expressly says so.
- Drafters of California employment arbitration agreements should include a clear FAA choice-of-law provision to avoid uncertainty over which arbitration regime applies.
Why It Matters
The decision is a useful affirmation that California employers can effectively choose the FAA framework for their arbitration agreements simply by saying so in the contract — they do not need to prove their workers move goods across state lines. That clarity matters because the FAA framework gives employers more reliable enforcement of class-action waivers and a more uniform body of law than the California Arbitration Act.
For employees and plaintiffs’ counsel, the case underscores that the leverage to defeat arbitration usually has to come from contract-formation defenses — for example, evidence that the employee never actually agreed, that the agreement is procedurally and substantively unconscionable, or that key provisions are unenforceable under state law. Generic challenges to whether ‘interstate commerce’ is involved will rarely succeed when the agreement expressly designates the FAA.