He never crossed state lines, but the ruling keeps his wage claims out of arbitration
A California appeals court ruled that a furniture delivery driver who never left the state is a transportation worker exempt from federal arbitration law.
The June 25, 2026 decision is worth a read for any HR or legal team that leans on arbitration agreements to keep wage disputes out of court.
The driver delivered furniture for Of Service Transportation, which contracts with the furniture chain Living Spaces to move products from its California distribution centers to customers. In August 2019, he signed an independent contractor agreement through his own trucking company. It included an arbitration clause and a waiver barring class, collective, or representative actions, and it was governed by the Federal Arbitration Act - the law that generally forces courts to honor arbitration deals.
He stopped working for Of Service in August 2021 after he complained about working long hours for insufficient pay. He then filed two lawsuits. A class action in September 2021 alleged various Labor Code violations, including failure to pay minimum wage and overtime, failure to authorize and permit meal and rest periods, and unlawful wage deductions. A December 2021 suit sought civil penalties under California's Private Attorneys General Act, or PAGA, which lets workers sue on behalf of the state for labor violations.
Living Spaces and Of Service moved to push the claims into arbitration and to dismiss the representative PAGA claims. That is where the case turned. The FAA exempts transportation workers engaged in interstate commerce. If the driver fit that category, the companies could not use the FAA to enforce his arbitration agreement.
The court said he fit. Though he made local retail deliveries and never crossed state lines, the furniture he carried was part of a continuous interstate journey - manufactured both inside and outside California, including in Mexico, then shipped to distribution centers before reaching customers. Quoting a recent US Supreme Court decision, the court asked whether a worker plays "a 'direct,' 'necessary,' and 'activ[e]' role in moving goods across borders." He did, the court found, by loading and unloading furniture that was in the stream of interstate commerce.
The exemption did not erase the arbitration agreement. The trial court still sent several of his claims to arbitration. But it allowed his core wage claims - for minimum wage, overtime, unlawful deductions, and meal and rest breaks - to stay in court. The court also held that he keeps standing to pursue representative PAGA claims in court, even while his individual PAGA claims were sent to arbitration, though those representative claims are paused until the arbitration finishes. The appeals court affirmed the trial court's order in full.
For HR leaders, the signal is narrow but real. An arbitration clause is not automatic cover when delivery drivers are involved. Courts are focused on what a worker does - whether they move goods still traveling through interstate commerce - not whether the delivery stays inside one state, and not whether the sale was retail or wholesale. The merits of the wage claims have not been decided; the ruling settled only how and where those claims may proceed.
