Enforcing employment arbitration agreements in California often feels like an uphill battle, but a recent decision from the Court of Appeal offers a useful tip for employers. In Sinedou S. Tuufuli v. West Coast Dental Administrative Services, LLC, the court confirmed that parties may elect to have their arbitration agreement governed by the Federal Arbitration Act (FAA) through clear contractual language, even where the underlying employment relationship is largely intrastate.

The dispute began when Sinedou Tuufuli, a former collector and customer service representative, filed a lawsuit against her former employer, West Coast Dental, alleging various individual and class-wide violations of the California Labor Code. Like many modern employers, West Coast Dental had required Tuufuli to sign an arbitration agreement at the start of her employment. This agreement was broad, covering all disputes related to her employment and expressly prohibiting the adjudication of class or other representative claims. When the company moved to compel arbitration of her individual claims and dismiss the class claims, Tuufuli opposed, arguing in part that the FAA did not apply because her work and the company’s operations were effectively confined to California.

Tuufuli’s argument focused on the notion that because she “rarely, if ever, interacted with individuals or entities outside of California,” the arbitration agreement did not involve the “interstate commerce” required for FAA jurisdiction. The Court of Appeal rejected the premise that FAA applicability in this context turns only on proof that the particular employment relationship at issue involved interstate commerce. Instead, the court emphasized that arbitration is a matter of consent and looked to the text of the arbitration agreement, which expressly stated that it “shall be governed by the Federal Arbitration Act” and, to the extent permitted by the FAA, California law. Relying on prior California authority recognizing that parties may voluntarily elect FAA governance, the court held that this contractual choice was sufficient to make the FAA applicable without resolving whether West Coast Dental’s operations in fact involved interstate commerce.

Importantly, the court did not hold that contractual language can override statutory limits on the FAA’s reach. The opinion distinguishes the FAA’s section 1 exemption for certain transportation workers, explaining that those workers’ contracts do not become subject to the FAA simply because the agreement declares that it is governed by the act. At the same time, the court rejected the employee’s contention that section 2 operates as an implied exclusion of contracts that do not involve interstate commerce, noting that, unlike section 1, section 2 contains no language expressly carving such contracts out. Having concluded that the parties’ express agreement was enough to bring their arbitration clause within the FAA, the court found it unnecessary to decide whether the agreement also “evidenced a transaction involving commerce” on traditional interstate-commerce grounds.

For employers, the practical takeaway is straightforward: arbitration agreements should explicitly state that they are governed by the Federal Arbitration Act, except where the workforce falls into a category that the statute itself exempts. Clear FAA choice-of-law language provides an independent contractual basis for applying the FAA, which can strengthen efforts to enforce class and representative action waivers without litigating in detail whether a particular employee’s duties or a particular operation had a sufficient nexus to interstate commerce. In an era when California courts often scrutinize mandatory arbitration, Tuufuli reinforces the principle that when an agreement is clearly drafted and consensual, courts will typically respect the parties’ decision to resolve their employment disputes within the FAA’s framework.

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