AB 2155 Ends California’s Arbitration Fallback for Drivers and Warehouse Workers

A Fontana carrier asked a fair question this summer: if his drivers kept winning the argument that the Federal Arbitration Act does not reach them, why could he still push their wage claims into arbitration? The answer was California’s own arbitration statute, and on January 1, 2027 it stops working.

Assembly Bill 2155, Chapter 46 of the Statutes of 2026, signed June 30, 2026, adds a subdivision to Cal. Code Civ. Proc. § 1281: a written arbitration agreement “is not enforceable under this section to the extent the agreement is not enforceable under the Federal Arbitration Act.” One sentence, and the employer’s second try is gone.

That lands harder in the Inland Empire than anywhere else, because so much of the payroll here belongs to people who unload, stage, and drive goods that started somewhere else. Below: who is affected, and what to fix.

What exactly does AB 2155 change about California arbitration law?

Section 1281 has long said that a written arbitration agreement is “valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” AB 2155 hangs a ceiling over it: state enforceability now runs no further than federal. The Legislature’s stated policy is that “all persons have the full benefit of the rights, forums, and procedures established under state law,” and it imported the FAA’s exclusions as a group.

Two get named. The carve-out in 9 U.S.C. § 1 says the FAA does not reach “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The other is the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which California courts already applied as federal law, so the weight of this bill sits on the first. Note too that section 1281 is general, which puts commercial clauses in reach.

Why did the California Arbitration Act rescue employers when the FAA did not?

Because the two statutes are independent. Showing that the federal act does not govern your contract is not the same as showing the agreement is unenforceable, and California had a statute of its own. Garrido v. Air Liquide Industrial U.S. LP, 241 Cal.App.4th 833 (2015), held that “[b]ecause Garrido was a transportation worker, the FAA does not apply to the ADR agreement,” then analyzed it under the CAA.

Muller v. Roy Miller Freight Lines, LLC, 34 Cal.App.5th 1056 (2019), ran the same sequence for a driver whose cargo was nearly all out-of-state: exempt from the FAA, unpaid wage claim left in court by Labor Code section 229, other causes of action sent to arbitration anyway. That last clause is the point of AB 2155: what was an inconvenience becomes a defeat.

Which workers actually fall inside the transportation worker exclusion?

Three Supreme Court cases set the outer edges. New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), read “contract of employment” in its 1925 sense, so contractor agreements are inside the exclusion. Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024), held the worker need not be in the transportation industry at all. Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), exempted ramp supervisors who loaded cargo: loading a vehicle bound across state lines is itself commerce.

The Ninth Circuit went further. Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), covered last-mile drivers who never cross a state line, and Carmona v. Domino’s Pizza, LLC, 21 F.4th 627 (9th Cir. 2021), reaffirmed at 73 F.4th 1135 (9th Cir. 2023), reached drivers hauling goods from a California supply center to franchise stores. Then Ortiz v. Randstad Inhouse Services, LLC, 95 F.4th 1152 (9th Cir. 2024), exempted a forklift operator in a California warehouse, since “[a]n employee is not categorically excluded from the transportation worker exemption simply because he performs his duties on a purely local basis.”

What happens to an exempt worker’s claims once arbitration is unavailable?

They go to court. Labor Code § 229 says actions to collect due and unpaid wages “may be maintained without regard to the existence of any private agreement to arbitrate.” That provision is preempted wherever the FAA governs, so it is live again for an exempt driver. Read it narrowly: Lane v. Francis Capital Management LLC, 224 Cal.App.4th 676 (2014), confines section 229 to wage collection claims.

A class waiver lives inside the arbitration agreement and falls with it, and class waivers are durable here only because AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), is a preemption holding, so taking the FAA out takes the shield, as Garrido showed. Representative claims were already court-bound under Adolph v. Uber Technologies, Inc., 14 Cal.5th 1104 (2023), and now everything sits before one jury.

Why won’t the FAA preempt AB 2155 the way it preempted AB 51?

Labor Code section 432.6 (AB 51) made it unlawful to require an arbitration agreement as a condition of employment, and the Ninth Circuit struck it down in Chamber of Commerce v. Bonta, 62 F.4th 473 (9th Cir. 2023): “[s]tate rules that burden the formation of arbitration agreements stand as an obstacle to the FAA.”

AB 2155 sits on the other side of that line: it penalizes nobody for asking an employee to sign. It says only that California will not enforce an agreement Congress placed outside the FAA, and obstacle preemption is hard to build on a statute that does not apply. No court has construed the new subdivision yet.

How should an Inland Empire logistics company rewrite its agreements before 2027?

Audit by function, not job title. After Bissonnette and Ortiz the question is what a class of workers does with goods still in transit. Hostlers, dock loaders, pickers pulling imported freight, and drivers go in the exposed column; maintenance techs, dispatchers, and office staff do not. Then read the choice-of-law clause. In Rittmann the agreement assigned arbitration to the FAA alone, and when the FAA did not apply, nothing was left to enforce it.

Naming the CAA will not save you now, and borrowing another state’s arbitration act for California workers runs into Labor Code § 925. Fix severability, and decide whether you would rather arbitrate without a class waiver or litigate with one. A jury waiver is no way out: Grafton Partners L.P. v. Superior Court, 36 Cal.4th 944 (2005), holds predispute jury waivers unenforceable. Cal. Code Civ. Proc. § 638 judicial reference is the workable alternative, with limits: the parties pay the referee, and the decision is appealable. For owner-operators, Labor Code § 2775 applies the ABC test, and California Trucking Ass’n v. Bonta, 996 F.3d 644 (9th Cir. 2021), held the FAAAA does not preempt it as to motor carriers.

Arbitration was never cheap, because the drafting party funds it: under Cal. Code Civ. Proc. §§ 1281.97 and 1281.98 missing an invoice by thirty days is a material breach that waives the right to compel, softened by Hohenshelt v. Superior Court, No. S284498 (Cal. Aug. 11, 2025). That bill vanishes with the clause, and what replaces it is worse: a certified class is one accrual event, and most employment practices policies fund defense while excluding wage damages. Revisit the ASC 450 reserve before year-end.

How does this play out for a 170-person logistics company in Ontario?

Assume a third-party logistics company at a cross-dock in Ontario: 140 warehouse associates and 30 local drivers, all on a 2024 arbitration agreement with a class waiver and a recital that the FAA governs. The figures are illustrative. The drivers are the easy call: last leg of an interstate journey. Associates who unload containers and load outbound trailers look like Ortiz, while a returns line working goods that have come to rest is closer. Call it 110 of 170 heading to court.

Now file in San Bernardino Superior Court in February 2027: missed meal periods, off-the-clock security screening, derivative wage statement and waiting time claims, PAGA attached. Under the old rules it succeeds under the CAA. Under section 1281(b) it fails as to the exempt group, the class waiver falls with it, and the case is a putative class action. At an assumed 110 workers, one missed break a week, and a $22 blended rate, four years of meal period premiums alone runs near $500,000 before penalties or fees. Re-sorting by task and auditing meal period practices cost far less.

Frequently Asked Questions

Does AB 2155 ban arbitration in California?

No. It does not prohibit arbitration agreements or make it unlawful to ask an employee to sign one. It amends Code of Civil Procedure section 1281 so a California court will not enforce an agreement to the extent the Federal Arbitration Act would not. Most agreements, including those with office staff, are unaffected.

Which workers count as transportation workers under the FAA exclusion?

The exclusion in 9 U.S.C. section 1 covers seamen, railroad employees, and any other class of workers engaged in foreign or interstate commerce. Courts look at what the class of workers does rather than the employer’s industry or the title, so last-mile drivers and warehouse workers handling goods still in transit have qualified. An employee who never touches goods in transit does not.

Does AB 2155 apply to arbitration agreements signed before 2027?

The amendment governs enforceability, which is decided when a party asks a court to compel arbitration, so a petition filed after January 1, 2027 on a 2024 agreement will likely be judged under the new subdivision. No published decision has addressed it. Assume existing agreements are covered, not grandfathered.

Can a California employer still arbitrate with office and sales employees?

Yes, in most cases. An inside sales representative, a staff accountant, or an HR coordinator is not a transportation worker, the FAA still governs, and the new subdivision changes nothing. For a logistics company the practical answer is often two agreements, one for the office group and one written for a workforce that will litigate.

What happens to a class action waiver for drivers after AB 2155?

A class waiver written into an arbitration agreement generally falls when the agreement cannot be enforced. Class waivers are durable in California because AT&T Mobility LLC v. Concepcion held that the FAA preempts contrary state law, and that protection disappears when the FAA does not apply. Expect certification fights rather than individual arbitrations.

Does AB 2155 affect commercial contracts between businesses?

Section 1281 is a general arbitration statute rather than an employment statute, so the new subdivision reaches commercial clauses too. The practical effect is small, because the FAA’s exclusions target employment contracts and most business-to-business agreements involve interstate commerce and stay enforceable. A purely local contract is the open question.

How North Star Law Firm Can Help

North Star Law Firm works with Inland Empire and Sacramento-area logistics and warehousing companies on the paperwork this touches, from contract drafting and review to internal governance agreements and the wider business and contract law questions that follow. Phillip Zagotti is a California attorney and a CPA, which matters here because the question is not only which clause to use but what the exposure costs.

If your drivers or warehouse staff are on an arbitration agreement nobody has read since 2024, contact North Star Law Firm or schedule a consultation before January 1, 2027.