In re Orr (Orr v. United States District Court)
The Ninth Circuit grants a writ of mandamus, holding that a district court commits clear legal error when it compels arbitration without first deciding whether the FAA or state law supplies its authority — because, under New Prime, the court, not an arbitrator, must decide whether the FAA section 1 “contracts of employment” exclusion applies.
In re Orr (9th Cir. 2026) ___ F.4th ___ [No. 25-2330]
Ninth Circuit — binding federal authority in the Ninth Circuit, including the district courts of California. Confirm subsequent history before relying on it.
Arbitration
FAA § 1 / New Prime
Mandamus
Writ granted
In brief. Rebecca Orr, a former UPS Seasonal Support Driver, sued for wage violations; UPS moved to compel arbitration. The district court compelled arbitration of her individual claims but “refused to determine whether the [FAA] or the California Arbitration Act … is applicable,” reasoning the result would be the same either way and that the question could go to the arbitrator. The Ninth Circuit granted a writ of mandamus. Under New Prime Inc. v. Oliveira, “the district court, not an arbitrator, must decide whether the contracts of employment exclusion in 9 U.S.C. § 1 applies … before ordering arbitration,” and by compelling arbitration “without deciding whether the FAA or state law applies, the district court improperly delegated the FAA § 1 exclusion question to the arbitrator.” The court directed the district court to determine the statutory basis for its authority first. (In re Orr (9th Cir. 2026) No. 25-2330 (slip opn. at pp. 2–6, 24).)
By Jonathan J. Delshad
Draft for review · source-verification pending
Facts
UPS hires Seasonal Support Drivers to handle holiday delivery volume; Orr held that role in late 2023, picking up packages from other drivers and delivering them to their final destinations. (slip opn. at pp. 7–8.) On applying, she signed an “Arbitration Agreement/Seasonal Hiring Agreement” with a delegation clause (the arbitrator decides validity/enforceability/arbitrability), a class-action waiver, a PAGA-individual-arbitration clause, and a choice-of-law provision describing the contract as “governed by the Federal Arbitration Act,” with the FAA to govern “unless the FAA ‘does not apply to a particular dispute or to one or both parties.’” (slip opn. at pp. 7–8.) After repeated route cancellations, Orr sued in California state court for wage violations (including reporting-time pay) on behalf of three putative classes, later adding a PAGA claim; UPS removed and moved to compel arbitration. (slip opn. at pp. 8–9.)
The district court granted the motion, compelling Orr’s individual claims to arbitration and staying the class claims, but held it “need not decide” whether the FAA or CAA governed because “the result is the same” under either. (slip opn. at p. 9.) It denied Orr’s Rule 60 motion for clarification, reasoning it “properly refrained from determining whether a Section 1 exemption applies … because the CAA does not require analysis of whether an exemption applies prior to compelling arbitration.” (slip opn. at pp. 9–10.)
Procedural history
Because no contemporaneous appeal of an order compelling arbitration is available (9 U.S.C. § 16(b); Code Civ. Proc., § 1294), Orr petitioned for a writ of mandamus. (slip opn. at pp. 10, 20–21.) The panel weighed the five Bauman factors and granted the writ, directing the district court to determine the statutory basis for its authority to compel arbitration. (slip opn. at pp. 6–7, 24.)
Issue
May a district court compel arbitration without first deciding whether the FAA or state arbitration law governs the agreement — effectively leaving the FAA section 1 “contracts of employment” exclusion question to the arbitrator — on the theory that arbitration would be ordered under either statute; and if not, does that error warrant mandamus relief? (slip opn. at pp. 5–6, 11.)
Holding
Writ granted. The district court “committed clear error by refusing to determine the basis for its authority to compel arbitration and improperly delegating the contractual question as to the FAA’s applicability to the arbitrator.” (slip opn. at p. 12.) “New Prime … held that the district court, not an arbitrator, must decide whether the contracts of employment exclusion in 9 U.S.C. § 1 applies … before ordering arbitration,” and “no federal court of appeals … has permitted district courts wholly to abstain from addressing the FAA § 1 exclusion question … solely because an alternative state law might also provide for arbitration.” (slip opn. at pp. 5–6, 17–18.) Clear legal error (the necessary third Bauman factor), together with the lack of an adequate alternative remedy and uncorrectable prejudice, justified mandamus. (slip opn. at pp. 6–7, 11–23.) The court did not decide whether the section 1 exemption applies; it directed only that “the basis for the arbitration … be decided first.” (slip opn. at p. 24.)
Reasoning
1. The FAA’s sequencing is mandatory. To compel arbitration under the FAA, “a district court must first determine whether an agreement falls ‘within or beyond the boundaries of §§ 1 and 2.’” (slip opn. at pp. 12–13, quoting New Prime Inc. v. Oliveira (2019) 586 U.S. 105, 111.) Enforceability under sections 3 and 4 “depends on” section 2, “which, in turn, depends on the application of § 1’s exception,” so a court’s power to compel “is rooted in the statute’s bounded grant of authority.” (slip opn. at p. 13.) The district court “sidestep[ped] whether the FAA’s contracts of employment exclusion applies,” which was “clearly erroneous.” (slip opn. at p. 13.)
2. The agreement itself required the decision. Because “the first question in any arbitration dispute must be: What have these parties agreed to?” (slip opn. at p. 13, quoting Coinbase, Inc. v. Suski (2024) 602 U.S. 143, 148), and the agreement selected the FAA “unless the FAA ‘does not apply,’” the parties’ contract presupposed a ruling on FAA applicability — a question that, under New Prime and Romero v. Watkins & Shepard Trucking, Inc. (9th Cir. 2021) 9 F.4th 1097, 1100, “the district court, not an arbitrator, must determine.” (slip opn. at pp. 13–14.)
3. The choice of law is not a mere technicality. Whether the FAA or state law governs would determine which claims Orr must arbitrate and which she may litigate. The FAA preempts Labor Code section 229 (which keeps “due and unpaid wages” actions in court) under Perry v. Thomas (1987) 482 U.S. 483, 490–491; but if the FAA is inapplicable, “an action under Labor Code section 229 may be maintained in court.” (slip opn. at pp. 14–15, citing Garrido v. Air Liquide Indus. U.S. LP (2015) 241 Cal.App.4th 833, 845.) Likewise, the enforceability of the class waiver could turn on FAA applicability (compare Gentry with Iskanian/Concepcion). (slip opn. at pp. 15, 22–23.) Because the delegation clause sends arbitrability to the arbitrator, leaving the FAA question open would force the arbitrator to decide it — “New Prime forbids that result.” (slip opn. at pp. 15–16.)
4. A circuit consensus, and a narrow holding. The court canvassed the federal appellate authority and found that “no federal court of appeals decision supports the district court’s refusal to specify whether it compelled arbitration pursuant to federal or state law.” (slip opn. at pp. 16–18, citing, among others, Harper v. Amazon.com Servs., Inc. (3d Cir. 2021) 12 F.4th 287, and Amos v. Amazon Logistics, Inc. (4th Cir. 2023) 74 F.4th 591.) The court cabined its holding: it does not require deciding section 1 in every case, only that “New Prime obligates the district court, not the arbitrator, to decide the § 1 question if it is to be decided,” and the writ “is not meant to indicate that arbitration must be ordered.” (slip opn. at pp. 18 & fn. 7, 24.)
5. Mandamus was warranted. Applying Bauman v. U.S. Dist. Court (9th Cir. 1977) 557 F.2d 650, 654–655, the panel found clear legal error (the “necessary” third factor), no adequate alternative remedy (no contemporaneous appeal under 9 U.S.C. § 16(b); In re Henson (9th Cir. 2017) 869 F.3d 1052, 1058), and prejudice uncorrectable on appeal — both from the unspecified source of authority and because proceeding to arbitration under the wrong law could deprive Orr of a forum for several claims. (slip opn. at pp. 11–23.) Judge Miller concurred in full but wrote separately to urge that the court reconsider its precedents (Douglas, Henson) allowing mandamus to bypass Congress’s limits on interlocutory review of arbitration orders under 9 U.S.C. § 16. (slip opn. at pp. 25–26.)
Significance
In re Orr is a practical and consequential procedural ruling for California arbitration practice. It holds that a district court cannot duck the FAA-versus-state-law question by assuming arbitration would follow under either regime; New Prime requires the court itself to decide whether the section 1 transportation-worker exclusion applies before compelling arbitration, and the answer frequently dictates substantive outcomes — most importantly whether Labor Code section 229 keeps unpaid-wage claims in court and whether a class-action waiver is enforceable. For the many wage-and-hour cases removed to federal court involving drivers and logistics workers, the decision creates a clear sequencing rule and a mandamus remedy when district courts skip it. The decision also surfaces an internal tension flagged by Judge Miller’s concurrence over whether mandamus should be available at all to review orders compelling arbitration, given 9 U.S.C. § 16’s limits on interlocutory appeals — an issue that may eventually draw en banc or Supreme Court attention.
Key quotes
“By compelling arbitration of Orr’s individual claims without deciding whether the FAA or state law applies, the district court improperly delegated the FAA § 1 exclusion question to the arbitrator.” (In re Orr, supra, No. 25-2330 (slip opn. at p. 14).)
“[N]o federal court of appeals … has permitted district courts wholly to abstain from addressing the FAA § 1 exclusion question before compelling arbitration solely because an alternative state law might also provide for arbitration.” (In re Orr, supra, No. 25-2330 (slip opn. at p. 17).)
Read the full opinion (U.S. Court of Appeals, Ninth Circuit) →
Practice pointer
When you oppose a motion to compel arbitration for a driver, warehouse, or logistics worker, insist that the court decide the FAA section 1 question first — and frame why the answer matters: if the FAA is inapplicable, Labor Code section 229 may keep your client’s unpaid-wage claims in court, and the class-action-waiver analysis (Gentry versus Iskanian) may change. Tie the demand to the agreement’s own choice-of-law clause, which typically presupposes a ruling on FAA applicability. If the district court refuses and compels arbitration anyway — leaving the section 1 question to the arbitrator — In re Orr supplies the remedy: a writ of mandamus, available because no ordinary interlocutory appeal lies from an order compelling arbitration. Preserve the section 1 argument expressly below; do not let the agreement’s delegation clause be read to send the section 1 exclusion to the arbitrator, which New Prime forbids. (slip opn. at pp. 12–23.)
Open questions
The panel expressly did not decide whether Orr’s UPS Seasonal Support Driver role falls within the section 1 exclusion, noting only the recent Supreme Court decision in Flowers Foods, Inc. v. Brock (2026) 608 U.S. ___ on last-mile delivery workers. (slip opn. at pp. 24–25 & fn. 8.) It also left open which state law would apply if the FAA does not — the agreement, the parties acknowledged, may select the Ohio Arbitration Act rather than the CAA. (slip opn. at p. 14, fn. 2.) And the court reserved whether a district court must always decide section 1 before turning to a state-law basis, holding only that the court (not the arbitrator) must decide section 1 “if it is to be decided.” (slip opn. at p. 18, fn. 7.) Judge Miller’s concurrence invites reconsideration, in an appropriate case, of whether mandamus may be used at all to review orders compelling arbitration. (slip opn. at pp. 25–26.)