Donis: FAA Exemption Opened the Door to California’s Conflicting-Rulings Rule

In Donis v. Simplified Labor Staffing Solutions, the Court of Appeal affirmed denial of a staffing agency’s arbitration motion after finding the worker exempt from the FAA and applying the contract’s California-law fallback. That permitted the trial court to use Code of Civil Procedure section 1281.2(c) to avoid potentially conflicting rulings involving coworkers’ court claims. The October 16, 2026 opinion is unpublished and generally may not be cited or relied on in California court under rule 8.1115(a), subject to the rule’s exceptions. It is analyzed here as a particular disposition, not binding authority.

Two staffing agencies and one shared warehouse

The employee signed a staffing agency’s arbitration policy and acknowledgment. The policy selected the FAA but expressly provided for applicable state arbitration statutes if the FAA was inapplicable. At the client’s warehouse, the employee primarily drove a forklift loading and unloading trucks or containers; some loaded trucks were bound out of state. Other named plaintiffs worked at the same warehouse through a different staffing agency. Donis, opinion at 2–5.

The resulting wage-and-hour action named the agencies and the common warehouse client. The trial court denied arbitration for the other workers because sufficient proof of their agreements was absent. It then denied the first agency’s motion because arbitration could conflict with the litigation remaining in court about the same workplace. The client joined the motions below but did not appeal. The opinion did not decide that any pleaded wage violation had actually occurred.

The appellate court separated the contract and discretionary questions

The court first asked whether the FAA choice barred use of California procedure and then whether the trial court properly exercised its section 1281.2(c) discretion. Contract and statutory interpretation generally received independent review; application of the conflicting-rulings provision received abuse-of-discretion review. Donis, opinion at 7.

Rather than decide every possible meaning of the general FAA language, the panel began with the policy’s express exception: If the FAA did not apply, the agreement directed the court to state arbitration statutes. It read the policy and signed acknowledgment together as parts of one transaction. This was not a holding that every mention of the FAA has the same contractual effect. Donis, opinion at 8 & n.6.

Actual cargo-loading duties established the FAA exemption here

The panel applied the transportation-worker framework from Southwest Airlines Co. v. Saxon, focusing on the worker’s duties and direct role in interstate movement. The undisputed declaration described loading cargo onto trucks, some with out-of-state destinations. That work placed the employee within the FAA section 1 exemption on this record. The employer’s evidentiary objections below were not renewed on appeal. Donis, opinion at 9–10.

The trial court had not reached that exemption, but the appellate court could affirm on a supported ground presented below. Importantly, exemption from the FAA did not itself invalidate the arbitration contract. It activated the agreement’s fallback and made California procedure relevant. Our New Prime analysis likewise distinguishes FAA coverage from possible enforcement under another source of law.

Why all three conflicting-rulings conditions were satisfied

Section 1281.2(c) required a party to the arbitration agreement also to be involved in pending court litigation with a third party, related transactions, and a possibility of conflicting rulings on a common issue. The warehouse client supplied the common party; the coworkers not bound by the relevant agreement supplied the third parties. The claims concerned the same warehouse’s breaks, overtime and expenses during the same period. An arbitrator and court factfinder could reach different findings about those conditions. Donis, opinion at 10–11.

The agency argued that unrelated claimants could otherwise defeat arbitration simply by joining a lawsuit. The court rejected that description because the common client and common workplace issues connected these claims. It also rejected a demand for proof of the ultimate wage claims at this early stage: The pleadings could establish the relevant possibility of inconsistency without resolving liability. Donis, opinion at 12–13.

The result was discretionary and procedurally limited

The trial court had raised the statute in its tentative ruling, and the parties had an opportunity to address it at the hearing. No party objected or requested additional briefing then, so the later procedural complaint failed. The appellate court affirmed the order and awarded the employee costs on appeal. Donis, opinion at 11–13.

The case does not establish that every warehouse worker is FAA-exempt, that coworkers’ claims always prevent arbitration, or that the wage claims have been proved. Its useful sequence is contract language, actual duties, remaining court parties, common issues, and the court’s permitted procedural choice. Our warehouse arbitration guide develops those practical questions using the governing framework rather than presenting this unpublished disposition as precedent.