California Amends Arbitration Law to Mirror the Federal Arbitration Act’s “Transportation Worker” Exemption
On June 30, 2026, Governor Newsom signed into law AB 2155, which adopts, for purposes of the California Arbitration Act (CAA), “any and all exclusions” under the Federal Arbitration Act (FAA). The FAA’s primary exclusions are for “transportation workers” under Section 1 (“contracts of employment of seamen, railroad employees, or any other class of workers engaged in interstate commerce”), and for claims of sexual assault and sexual harassment under Section 402. While previously it was possible to arbitrate claims under the CAA that were otherwise exempt under the FAA, effective January 1, 2027, that pathway will be closed.
California’s legislation comes on the heels of the Supreme Court’s decision in Flowers Foods v Brock, where the Court rejected a categorical rule that a worker had to cross state lines to be engaged in interstate commerce for purposes of the FAA’s transportation worker exemption. Instead, the Court held that a driver who only transported goods on the last, intrastate leg of a journey that moved across state lines could still be considered to be “engaged in interstate commerce” for purposes of the FAA. For transportation providers that intend to use the CAA to govern the arbitration of disputes for workers who are exempt from the FAA, they should revisit their arbitration agreements and overall arbitration program before AB 2155 goes into effect on January 1, 2027.
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News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
California Amends Arbitration Law to Mirror the Federal Arbitration Act’s “Transportation Worker” Exemption
On June 30, 2026, Governor Newsom signed into law AB 2155, which adopts, for purposes of the California Arbitration Act (CAA), “any and all exclusions” under the Federal Arbitration Act (FAA). The FAA’s primary exclusions are for “transportation workers” under Section 1 (“contracts of employment of seamen, railroad employees, or any other class of workers engaged in interstate commerce”), and for claims of sexual assault and sexual harassment under Section 402. While previously it was possible to arbitrate claims under the CAA that were otherwise exempt under the FAA, effective January 1, 2027, that pathway will be closed.
California’s legislation comes on the heels of the Supreme Court’s decision in Flowers Foods v Brock, where the Court rejected a categorical rule that a worker had to cross state lines to be engaged in interstate commerce for purposes of the FAA’s transportation worker exemption. Instead, the Court held that a driver who only transported goods on the last, intrastate leg of a journey that moved across state lines could still be considered to be “engaged in interstate commerce” for purposes of the FAA. For transportation providers that intend to use the CAA to govern the arbitration of disputes for workers who are exempt from the FAA, they should revisit their arbitration agreements and overall arbitration program before AB 2155 goes into effect on January 1, 2027.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
