Court of Appeal Rules That Employee Does Not Have to Arbitrate His Wage Claims Since Labor Code Sect

The Court of Appeal for the Fourth District ruled this week that a worker qualified as a transportation worker engaged in interstate commerce under 9 U.S.C. Sec. 1 even though he did not physically transport goods across state lines, since his employer is in the transportation industry, and the vast majority of the goods he transported originated outside California. (See, Muller v. Roy Miller Freight Lines, LLC - May 1, 2019, Fourth District, Div. Three - 2019 S.O.S. 2117.)

The crux of the employer's appeal was whether the Federal Arbitration Act (FAA) applies, and more specifically, whether Muller is a transportation worker engaged in interstate commerce under 9 U.S.C. § 1 (section 1) and thus exempt from FAA coverage. If he is exempt from FAA coverage, as the trial court held, Muller does not have to arbitrate his cause of action for unpaid wages because Labor Code section 229 (section 229) authorizes lawsuits for unpaid wages notwithstanding an agreement to arbitrate. If the FAA applies, as the employer contends, the FAA preempts section 229, and Muller must submit his cause of action for unpaid wages to arbitration, along with his five other causes of action. Ultimately, the Ninth Circuit determined that the trial court correctly concluded Muller is exempt from FAA coverage under section 1. Even though Muller did not physically transport goods across state lines, his employer is in the transportation industry, and the vast majority of the goods he transported originated outside California. (See, Muller v. Roy Miller Freight Lines, LLC - May 1, 2019, Fourth District, Div. Three - 2019 S.O.S. 2117.)