The Federal Arbitration Act (FAA) covers transactions involving interstate commerce, given that it addresses the enforcement of arbitration agreements within the full reach of the U.S. Constitution’s commerce clause, the California Court of Appeal recently said.

In Evenskaas v. California Transit, Inc., et al., California Transit, Inc. had a contract to provide paratransit services in parts of Los Angeles County, which public entities are required to offer under the Americans with Disabilities Act of 1990.

The plaintiff worked as a driver for the company’s paratransit service vehicles. When he began working there in 2017, he signed an arbitration agreement requiring the arbitration of all claims arising from his employment and waiving his right to bring class actions.

In 2018, the company terminated his employment. In 2020, the plaintiff filed a wage and hour class action against the defendants – who were the company, its owner, and the entity administering the company’s payroll.

The defendants filed a motion to compel the plaintiff to arbitrate his individual claims and to dismiss his class claims. The trial court, denying the motion, made the following findings:

• California law, not the FAA, applied to the arbitration agreement because it did not involve interstate commerce;
• The plaintiff’s waiver of his right to seek class-wide relief was unenforceable under the California Supreme Court’s judgment in Gentry v. Superior Court (2007).

The defendants appealed. The...

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