Court rules Living Spaces driver is a transportation worker despite local deliveries

He stopped working for Of Service in August 2021 after he complained about working long hours for insufficient pay. He then filed two lawsuits. A class action in September 2021 alleged various Labor Code violations, including failure to pay minimum wage and overtime, failure to authorize and permit meal and rest periods, and unlawful wage deductions. A December 2021 suit sought civil penalties under California’s Private Attorneys General Act, or PAGA, which lets workers sue on behalf of the state for labor violations. 

Living Spaces and Of Service moved to push the claims into arbitration and to dismiss the representative PAGA claims. That is where the case turned. The FAA exempts transportation workers engaged in interstate commerce. If the driver fit that category, the companies could not use the FAA to enforce his arbitration agreement. 

The court said he fit. Though he made local retail deliveries and never crossed state lines, the furniture he carried was part of a continuous interstate journey – manufactured both inside and outside California, including in Mexico, then shipped to distribution centers before reaching customers. Quoting a recent US Supreme Court decision, the court asked whether a worker plays “a ‘direct,’ ‘necessary,’ and ‘activ[e]’ role in moving goods across borders.” He did, the court found, by loading and unloading furniture that was in the stream of interstate commerce. 

The exemption did not erase the arbitration agreement. The trial court still sent several of his claims to arbitration. But it allowed his core wage claims – for minimum wage, overtime, unlawful deductions, and meal and rest breaks – to stay in court. The court also held that he keeps standing to pursue representative PAGA claims in court, even while his individual PAGA claims were sent to arbitration, though those representative claims are paused until the arbitration finishes. The appeals court affirmed the trial court’s order in full. 

For HR leaders, the signal is narrow but real. An arbitration clause is not automatic cover when delivery drivers are involved. Courts are focused on what a worker does – whether they move goods still traveling through interstate commerce – not whether the delivery stays inside one state, and not whether the sale was retail or wholesale. The merits of the wage claims have not been decided; the ruling settled only how and where those claims may proceed.