Molina: The Employer’s FAA Concession Left Its Mandatory Arbitration Clause Unenforceable

The employer conceded that the Federal Arbitration Act did not apply. That concession mattered in Molina v. Triumph Residential Services, Inc., No. B350252 (Cal. Ct. App. Oct. 22, 2026): The court held an arbitration agreement imposed in violation of Labor Code section 432.6 unenforceable where the FAA did not supply the statute’s exception. Triumph’s own account of the hiring process established the employment condition.

The published Second District decision affirmed denial of the motion to compel arbitration. It did not decide the underlying wage claims or hold that every California employment arbitration agreement is invalid.

The employer’s motion supplied the critical facts

Molina worked for Triumph, a property-management company, from approximately April 2023 to September 2024. Her later class complaint alleged eight wage-and-hour and related claims. Triumph sought arbitration of her individual claims and dismissal of the class claims. Its declaration described the arbitration agreement as part of hiring and onboarding; the agreement broadly covered employment disputes and included waivers of class and representative proceedings. Opinion, pages 3–5.

The agreement said the parties signed freely and voluntarily. But Triumph also argued that Molina could accept the agreement, try to negotiate out of it or seek another job. Both sides agreed that the FAA did not apply. The court decided the appeal on the agreed basis that the FAA did not apply.

Section 432.6 and its FAA exception did different work

Section 432.6(a) prohibits requiring an applicant or employee, as a condition of employment or an employment benefit, to waive specified rights, forums or procedures for FEHA or Labor Code violations. Subdivision (c) treats an agreement requiring affirmative action to preserve those rights—including opting out—as a condition of employment. Pages 7–8.

Subdivision (f) says the section is not intended to invalidate a written arbitration agreement otherwise enforceable under the FAA. That text was central. Ordinary California contract principles make agreements formed contrary to express law unenforceable; the court found no basis to extend the FAA-specific exception to an agreement that the parties conceded was outside it. The court said it had found no published California opinion answering that specific non-FAA enforceability question. Pages 8–10.

The federal preemption cases did not answer this conceded non-FAA case

Triumph relied on the treatment of section 432.6 in Chamber of Commerce v. Bonta and related federal decisions. The court distinguished the problem those decisions addressed: FAA preemption. It examined the legislative purpose of subdivision (f) and concluded that a provision aimed at preserving FAA enforceability did not broadly validate illegally formed agreements governed only by state law. Pages 10–13.

The court also addressed Triumph’s reliance on the federal district-court decisions Bahamonde, Kittrell and Bacajol. As the opinion explained, those decisions followed Bonta without examining why subdivision (f) excepted only FAA agreements. That reasoning did not meaningfully address the non-FAA question before this court. Page 13.

The opinion expressly left the scope of FAA preemption and the circumstances making an agreement “otherwise enforceable” under the FAA outside its holding. Although the trial court had called the agreement “void,” the appellate court did not resolve the technical distinction between a void and voidable agreement, identified in footnote 4. Those were actual limits of its reasoning: The parties’ concession and the outcome made those questions unnecessary to decide.

Accept, negotiate or find another job was still a condition

Because the relevant facts were undisputed and the question concerned applying the law to those facts, review was de novo: The appellate court decided the legal question itself. The parties disputed who bore the burden on the section 432.6 issue. The court did not choose between their proposed allocations because Triumph’s own undisputed evidence and argument established the violation either way. Pages 14–15.

Accepting arbitration or looking elsewhere described a condition of obtaining this employment. Requiring Molina to negotiate her way out required affirmative action to preserve her rights, implicating subdivision (c). The court also discussed the implication that bargaining away the clause would require giving up something else, implicating subdivision (b)’s prohibition on retaliation or discrimination for refusing the waiver. That discussion was not a finding that Molina actually accepted a lower salary or another particular concession. Pages 15–16.

The recital of voluntary signing did not eliminate the condition demonstrated by the employer’s account. The distinction is between choosing to sign a document and being required to sign it to obtain the job.

The result was a forum ruling, not a wage award

The court affirmed denial of the arbitration motion and awarded appellate costs to Molina. The wage-and-hour allegations still required adjudication. It did not determine class certification or award the wages alleged in the complaint. Page 16.

For another worker, start with the agreement and the employer’s actual position on the FAA. Do not assume that a California workplace, California choice-of-law clause or opt-out mechanism alone establishes the same conceded posture. Our Tuufuli analysis, which reports that decision’s review-granted status, concerns a different question about an express FAA choice.

Preserve the formation record as well as the signed agreement

For review of a pending arbitration request, bring the full agreement, offer and onboarding instructions, electronic signing records, any opt-out terms and the motion papers. Identify what the employer says would have happened if the worker refused, and preserve your own account of how signing was presented. Those materials can matter more than a stand-alone recital that the signature was voluntary.

The unresolved burden question is a reason to preserve affirmative evidence, not to assume the employer will repeat Triumph’s concessions. The applicable law, formation facts and procedural posture must be evaluated together. See our employment practice for consultation information.