Kenneth Doss worked for Tesla, Inc. at the company’s Fremont distribution center, first as a materials handler and then as a “yard hostler.” Yard hostlers drive tractor trucks to move, position, and park 53-foot trailers around Tesla’s factory grounds. The trailers contained auto parts — including, by Doss’s account, battery parts shipped in from Nevada — that had arrived from out of state and would be unloaded into a warehouse and eventually used to assemble Tesla vehicles. Doss never crossed state lines or physically left the factory grounds; his job was to reposition the still-loaded trailers from the parking and docking area to the warehouse dock so the parts could be unloaded.
Doss filed a putative class action against Tesla in Alameda County Superior Court, alleging eight causes of action for wage-and-hour violations under the Labor Code and the Unfair Competition Law (“UCL”), covering unpaid wages, overtime, meal and rest periods, wage statements, final-pay timing, and business-expense reimbursement. When he was hired, Doss had electronically signed an offer letter containing an arbitration provision with both a class action waiver and a clause stripping the arbitrator of authority to consolidate employee claims or award class-wide relief. Tesla moved to compel individual arbitration.
The central legal question was whether the Federal Arbitration Act (“FAA”) governed the agreement. The FAA exempts from its coverage the employment contracts of transportation workers “engaged in foreign or interstate commerce” (9 U.S.C. § 1). If that exemption applied, the FAA would not preempt California law that could defeat or limit arbitration.
The trial court denied Tesla’s motion to compel arbitration in its entirety. The court found that (1) the yard hostlers were transportation workers engaged in interstate commerce, so the arbitration agreement was exempt from the FAA under section 1 — reasoning that “the flow of commerce does not stop at the loading dock door”; (2) Labor Code section 229 (which lets courts disregard arbitration agreements in certain wage actions) rendered the agreement ineffective as to seven of Doss’s eight causes of action; (3) the class waiver was invalid under the four-factor test of Gentry v. Superior Court, 42 Cal. 4th 443 (2007); and (4) severance of the class waiver was inappropriate because the agreement was tainted with illegality.
The Court of Appeal issued a mixed disposition: affirmed in part, reversed in part, and remanded in the partially published case of Doss v. Tesla, Inc., No. A173210 (June, 2026). It affirmed the core holding that Doss and the putative class are exempt from the FAA under section 1. It reversed the trial court’s application of Labor Code section 229 to four of the causes of action, and it found legal error in the trial court’s severance analysis, remanding for the trial court to decide unconscionability issues it had not yet reached. The court affirmed the trial court’s Gentry ruling in the unpublished portion of the opinion.
The FAA section 1 exemption (affirmed — published). Reviewing the legal question de novo, the court held the yard hostlers are exempt “transportation workers.” Drawing on Circuit City Stores v. Adams, 532 U.S. 105 (2001), and Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), the court explained that the inquiry focuses on the actual work performed, that a worker need not be in the transportation industry (Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024)) and need not personally cross state lines. Saxon held that loading and unloading cargo from vehicles in interstate transit is activity within the flow of commerce; the Ninth Circuit extended that logic to a warehouse worker in Ortiz v. Randstad Inhouse Services, LLC, 95 F.4th 1152 (9th Cir. 2024). The court placed the yard hostlers along this continuum: because their handling of the trailers was “a necessary step” in completing the interstate journey of the auto parts, they fell within the exemption.
Labor Code section 229 (reversed in part — published). Section 229 applies only to actions “for the collection of due and unpaid wages” arising from Labor Code sections 200–244. Applying Lane v. Francis Capital Management LLC, 224 Cal. App. 4th 676 (2014), and Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012), the court held that Doss’s second (overtime), third (meal periods), fourth (rest periods), and fifth (wage statements) causes of action are not collection-of-wages actions within section 229 — the second and third because they arise outside sections 200–244, and the fourth and fifth because their underlying legal violation is the denial of breaks or accurate statements, not the nonpayment of wages. The court rejected Doss’s argument that Naranjo v. Spectrum Security Services, Inc., 13 Cal. 5th 93 (2022), superseded Lane, reading Naranjo to reaffirm that characterization turns on the nature of the violation, not the remedy. But the court affirmed application of section 229 to the first (unpaid wages) and sixth (final pay under sections 201–203) causes of action, plus the derivative UCL claim — disagreeing with Lane to the extent it suggested a section 203 waiting-time-penalty claim falls outside section 229, and aligning with Villalobos v. Maersk, Inc., 114 Cal. App. 5th 1170 (2025).
The Gentry factors (affirmed — unpublished). Reviewing for abuse of discretion, the court upheld the finding that the class waiver was invalid. Counsel’s declaration adequately supported a modest individual recovery (~$25,000), consistent with figures accepted in Garrido v. Air Liquide Industrial U.S. LP, 241 Cal. App. 4th 833 (2015), and Betancourt v. Transportation Brokerage Specialists, Inc., 62 Cal. App. 5th 552 (2021). The court found the trial court could reasonably infer real-world obstacles to individual arbitration, and noted that not all four Gentry factors must point the same way to support invalidation.
Severance (reversed for legal error; remanded — unpublished). The court agreed with Tesla that the trial court’s refusal to sever was based on legal error. Under Ramirez v. Charter Communications, Inc., 16 Cal. 5th 478 (2024), severance is the strongly preferred course unless the agreement is “permeated” by unconscionability. The trial court wrongly treated the presence of a class waiver as itself evidence of a systematic effort to disadvantage employees, contrary to Gentry, which says severance is “particularly appropriate” for class-waiver provisions. Because Doss had argued other provisions were substantively unconscionable and the trial court never ruled on them, the appellate court remanded for the trial court to decide those unconscionability issues in the first instance.