Doss v. Tesla, Inc.

Facts and statutory framework

The FAA governs arbitration provisions in contracts involving interstate commerce but exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” (9 U.S.C. § 1; slip opn. at p. 1.) Under Circuit City Stores v. Adams (2001) 532 U.S. 105, the residual category reaches only “transportation workers,” narrowly construed, who share attributes with seamen and railroad employees and play a “necessary role in the free flow of goods.” (slip opn. at pp. 6–7, citing Circuit City at pp. 115, 118–121.) Courts “first define the relevant ‘class of workers’ … and then determine whether that class … is ‘engaged in foreign or interstate commerce,’” focusing on “the actual work” performed; the worker “need not physically move goods … across state … lines,” so long as the work falls “within the flow of interstate commerce.” (slip opn. at pp. 6–7, quoting Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 455–463, and citing Bissonnette v. LePage Bakeries Park St., LLC (2024) 601 U.S. 246, 253.)

Doss worked at Tesla’s Fremont factory between 2017 and 2021, latterly as a yard hostler driving tractor trucks to “move, position, and park 53’ trailers” containing component parts shipped from out of state — some battery parts came from Nevada — “to facilitate shipping and receiving functions.” (slip opn. at pp. 3–5.) He never drove across a state line. (slip opn. at p. 5.) His offer letter contained an arbitration agreement with a class-action waiver; he sued for wage, meal-and-rest, wage-statement, and business-expense violations, and opposed arbitration as an exempt transportation worker. (slip opn. at pp. 3–5.) The trial court denied Tesla’s motion, finding the section 1 exemption applied, that Labor Code section 229 defeated most claims, and that the class waiver was invalid under Gentry. (slip opn. at pp. 5–6.)

Procedural history

Tesla appealed the order denying its motion to compel. Because FAA applicability is a question of law, the court reviewed that issue de novo, with the party opposing arbitration bearing the burden to show an exemption applies. (slip opn. at p. 6, citing Betancourt v. Transportation Brokerage Specialists, Inc. (2021) 62 Cal.App.5th 552, 559.) The court affirmed the FAA-exemption ruling, reversed in part on the section 229 issue, and — in the unpublished portion — found legal error in the severance analysis and remanded for the trial court to decide unconscionability in the first instance. (slip opn. at pp. 2, 30.)

Issue

Are Tesla’s yard hostlers — who, entirely within the factory grounds, move and position trailers of out-of-state auto parts so the contents can be unloaded — a “class of workers engaged in … interstate commerce” exempt from the FAA under section 1? And to which of Doss’s causes of action does Labor Code section 229, which lets courts disregard an arbitration agreement in actions “for the collection of due and unpaid wages,” apply? (slip opn. at pp. 1–2, 17.)

Holding

Reasoning

1. The inquiry is the actual work, not the employer’s industry or border-crossing. Following Saxon, the court focused on “the actual work being performed.” Yard hostlers “directly handle out-of-state goods … exclusively within the confines of the factory grounds,” and the question was whether that work is “within the flow of interstate commerce.” (slip opn. at pp. 7–8.) The court placed the hostlers on the Saxon/Ortiz line — workers who handle goods “somewhere in the middle of their interstate journeys” — rather than the more attenuated last-mile-delivery cases. (slip opn. at pp. 8–11, discussing Ortiz v. Randstad Inhouse Servs., LLC (9th Cir. 2024) 95 F.4th 1152, and Flowers Foods, Inc. v. Brock (2026) 608 U.S. ___ [146 S.Ct. 1358].)

2. Moving the trailers was a “necessary step,” not an incidental one. Because “‘unloading … cargo from a vehicle carrying goods in interstate transit’” is itself within the flow of commerce (Saxon, at pp. 458–459), “the necessary preparatory work of Tesla’s yard hostlers to facilitate that unloading likewise fits the bill.” (slip opn. at pp. 11–12.) The court rejected Tesla’s “come to rest”/“final destination” argument: the trailers “were the vessels that housed the goods during interstate transport, making them instrumentalities of interstate commerce” (citing United States v. Lopez (1995) 514 U.S. 549, 558), and a temporary stop on the factory grounds “did not cause such a break … as to separate the work … from the interstate transaction as a whole.” (slip opn. at pp. 14–16.) The court distinguished Immediato v. Postmates (local takeout) and Schechter Poultry (local slaughterhouse), and noted, applying ejusdem generis, that a “hostler” historically services railroad engines “at the end of a run,” akin to the yard hostlers’ role. (slip opn. at pp. 12–16 & fn. 5.)

3. Section 229 reaches only actions to “collect due and unpaid wages.” With the FAA out of the case, the court turned to Labor Code section 229, which permits suits “for the collection of due and unpaid wages … without regard to … any private agreement to arbitrate.” (slip opn. at pp. 17–18.) Section 229 sits in article 1 (§§ 200–244), so claims not based on those provisions — Doss’s second (overtime), third (meal periods), and seventh (expenses) — fall outside it; and even claims within article 1 must seek “due and unpaid wages,” which his fourth (rest-period premium, § 226.7) and fifth (wage statements, § 226) claims do not, because their gravamen is the denial of breaks and defective statements, not nonpayment. (slip opn. at pp. 18–20, following Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 684, and Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244.)

4. Unpaid-wage and waiting-time claims do qualify — and the court parts with Lane. Doss’s first cause (minimum/regular wages) and sixth cause (final wages, §§ 201–203) “expressly arise from provisions under the same article” and seek the “unpaid balance” of wages, so section 229 applies. (slip opn. at pp. 20–21.) The court disagreed with Lane insofar as it suggested that a §§ 201–203 claim seeking waiting-time penalties is not an action to collect wages, reasoning under Naranjo v. Spectrum Security Services, Inc. (2022) 13 Cal.5th 93, 112 that “the nature of the remedy does not dictate the proper characterization of the legal violation,” and aligning with Villalobos v. Maersk, Inc. (2025) 114 Cal.App.5th 1170, 1193–1194. (slip opn. at pp. 21–22.)

Significance

Doss meaningfully extends the FAA section 1 transportation-worker exemption to a class of purely intrafacility workers: employees who never leave the plant and never cross a state line, but who handle the very trailers that carried goods interstate. Building on Saxon and the Supreme Court’s 2026 decision in Brock, the court holds that positioning out-of-state trailers for unloading is a “necessary step” in the interstate journey, rejecting any bright-line “come to rest” rule and emphasizing a fact-specific focus on the work performed. For California wage-and-hour practice, the decision keeps a sizable category of warehouse-and-yard workers out of mandatory individual arbitration. The opinion is equally important for its clarification of Labor Code section 229: it confirms that only true “collection of due and unpaid wages” claims (minimum/regular wages and §§ 201–203 final-pay claims, even when they also seek waiting-time penalties) can be litigated despite an arbitration agreement, while meal-and-rest and wage-statement claims cannot — and it expressly narrows Lane on the waiting-time point.

Key quotes

“[Tesla’s yard hostlers] are ‘transportation workers’ engaged in interstate commerce because their movement and positioning of 53-foot trailers for unloading and receiving is a necessary step in the completion of the interstate journey of the auto parts.” (Doss, supra, No. A173210 (slip opn. at p. 2).)

“That the still-loaded trailers came to a temporary stop on one part of the factory grounds did not cause such a break in the interstate movement as to separate the work of Tesla’s yard hostlers from the interstate transaction as a whole.” (Doss, supra, No. A173210 (slip opn. at p. 15).)

Read the full opinion (official slip opinion) →

Practice pointer

Open questions

The court disclaimed any general rule about where on the premises interstate commerce ends (doorstep, loading dock), resting on the “specific facts unique to interstate commerce by trucks and trailers,” so the outer boundary of the exemption for other intrafacility roles remains undefined. (slip opn. at pp. 16–17.) On remand, the trial court must decide in the first instance whether the arbitration agreement is unconscionable based on Doss’s broader arguments, which could result in non-enforcement of the entire agreement even after the FAA and section 229 rulings. (slip opn. at pp. 29–30.) Finally, the opinion’s disagreement with Lane on §§ 201–203 waiting-time claims, and its alignment with Villalobos, sharpens an intermediate-court divergence that may warrant Supreme Court attention. (slip opn. at pp. 21–22.)