Without the FAA, an arbitration agreement required as a condition of employment is unenforceable under section 432.6
Labor Code section 432.6 bars requiring an employee to agree to arbitration as a condition of employment. In Molina v. Triumph Residential Services, Inc., the Second District, Division Four, held that when an agreement required in violation of the statute is not enforceable under the Federal Arbitration Act, it is unenforceable under California law, and it affirmed the denial of a motion to compel arbitration.
What happened in Molina
Triumph Residential Services, a Los Angeles property management company, employed Tiffany Diane Molina from about April 2023 to about September 2024. As part of hiring and onboarding, Triumph gave her an arbitration agreement covering disputes related to the employment relationship, with a waiver of class and representative claims. The agreement recited that the parties “freely and voluntarily sign this Agreement.”
In November 2024, Molina filed a wage-and-hour class action. Triumph moved to compel individual arbitration, asserting that California law, not the Federal Arbitration Act (FAA), applied. The Los Angeles County Superior Court, Judge Carolyn Kuhl, denied the motion, finding that the agreement was required as a condition of employment in violation of section 432.6 and was unenforceable. Triumph appealed.
Is an order denying a motion to compel arbitration appealable?
Yes. Triumph appealed under Code of Civil Procedure section 1294, subdivision (a), which makes an order denying a petition to compel arbitration appealable. It is one of the orders that can be appealed right away rather than after final judgment; see our note on appealable orders and writ-only orders. Because the evidence was not in conflict and the ruling turned on statutory interpretation, the court reviewed it de novo.
Does Labor Code section 432.6 make a mandatory arbitration agreement unenforceable?
Section 432.6 bars requiring an applicant or employee to waive the right to a judicial forum as a condition of employment. Subdivision (f) provides that the section does not invalidate a written arbitration agreement that is “otherwise enforceable under the” FAA. Triumph argued that the subdivision saves agreements formed in violation of the statute even where the FAA does not apply.
The court disagreed. It relied on the general rule in Civil Code section 1667 that a contract contrary to an express provision of law is unenforceable, and it read subdivision (f) as written. The exception, it held, “applies only to written arbitration agreements that are otherwise enforceable under the FAA.” The court explained that the carve-out was meant to avoid FAA preemption, not to rescue agreements outside the FAA. Where the FAA does not govern, an agreement required in violation of section 432.6 is one where “the resulting arbitration agreement is unenforceable.”
The court also addressed Chamber of Commerce of the United States v. Bonta, the Ninth Circuit decision on section 432.6. That case involved agreements governed by the FAA, so it did not decide this question, and federal district court decisions following it did not help Triumph. The court was careful about the limits of its ruling: “we say nothing about the scope of FAA preemption.”
How did the employer’s own evidence decide the case?
The parties disagreed about who had the burden to prove a violation of section 432.6. The court did not decide that question, because the result was the same “no matter which party bore the burden.” Triumph’s own motion said Molina “was free to accept the Arbitration Agreement, attempt to negotiate out of it or look for other employment.” The court held that the choice between signing and looking for other employment showed that “her employment was conditioned on agreeing to arbitration.” It analyzed the option to negotiate out separately, under the statute’s treatment of a requirement to take affirmative action to avoid arbitration.
What the court decided
“The trial court’s order denying Triumph’s motion to compel arbitration is affirmed. Molina is entitled to recover her costs on appeal.” Justice Daum wrote the opinion, joined by Presiding Justice Zukin and Justice Tamzarian.
For more on arbitration disputes, see our note on arbitration waiver timing and our appellate practice.
Key takeaways
- Labor Code section 432.6 bars requiring an employee to waive a judicial forum as a condition of employment.
- The subdivision (f) exception applies only to written arbitration agreements that are otherwise enforceable under the FAA.
- Where the FAA does not apply, an arbitration agreement required in violation of section 432.6 is unenforceable under California law.
- The employer’s own description of her choices, sign the agreement or look for other employment, showed that her employment was conditioned on agreeing to arbitration.
- The court expressly said nothing about the scope of FAA preemption.
Why this case shows the value of appellate counsel
For an employer or employee facing a ruling on a motion to compel arbitration, Molina shows how much turns on the theory chosen in the trial court. Triumph moved under California law rather than the FAA, and the subdivision (f) exception reaches only FAA-enforceable agreements. Its own motion then described her options in a way that showed a condition of employment. An order denying a motion to compel arbitration can be appealed immediately, and the appeal is decided on the record and arguments made below. Assessing that record, the governing law and the standard of review is the work of appellate counsel.
What this post is not. This post is attorney advertising and general information about a court decision. It is not legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts and record, and appellate deadlines are short and often jurisdictional — talk to appellate counsel about your case promptly.
Facing a ruling you may need to appeal or challenge by writ? Yisrael Gelb · yisrael@gelblawapc.com · (323) 632-6864