Federal Arbitration Act (9 U.S.C. §§ 1–2)
The federal statute that makes arbitration agreements enforceable and preempts contrary state law
The FAA makes written arbitration agreements valid, irrevocable, and enforceable — and its policy can preempt state laws that single out or disfavor arbitration.
Read the official text at U.S. Code (Cornell Legal Information Institute) →
Overview
The Federal Arbitration Act makes written arbitration agreements valid, irrevocable, and enforceable, and its policy favoring arbitration can preempt state laws that disfavor arbitration. For California employment practitioners, the FAA is the constant backdrop to every arbitration dispute: it both compels enforcement of covered agreements and constrains the state-law defenses available to resist them.
Two provisions do most of the work. Section 2 supplies the “equal-footing” command and the Act’s preemptive force; section 1 carves out the employment contracts of certain transportation workers.
The operative provisions
A written arbitration provision in a contract evidencing a transaction involving commerce is valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. This puts arbitration agreements on equal footing with other contracts and is the source of the FAA’s preemptive power over arbitration-disfavoring state law.
Section 1 exempts from the Act’s coverage the employment contracts of seamen, railroad employees, and other workers engaged in interstate commerce — the basis for the transportation-worker exemption that has generated significant litigation.
Preemption in practice
The FAA’s equal-footing principle, articulated in cases such as AT&T Mobility LLC v. Concepcion, means courts may not impose rules that single out or disfavor arbitration. The United States Supreme Court applied that principle in Morgan v. Sundance, holding that courts may not devise arbitration-specific procedural rules such as a prejudice requirement for waiver, and the Ninth Circuit applied it in Chamber of Commerce v. Bonta to hold California’s AB 51 (Lab. Code § 432.6) preempted as to covered agreements. Generally applicable contract defenses such as unconscionability, however, survive. (See Morgan; Bonta; Hohenshelt.)
Practice notes
Determine early whether the FAA governs the agreement. If it does, state-law defenses that target arbitration specifically are vulnerable to preemption, while generally applicable defenses such as unconscionability (Civ. Code § 1670.5) remain available. Consider the section 1 transportation-worker exemption where the employee’s work involves interstate transportation.
Related on this site
Practitioner analysis, current as of June 2026 — not the statute itself. Statutes are amended and decisional law evolves; confirm the operative language and current authority at the official source before relying.