Employment and commercial agreements often treat the governing-law paragraph as boilerplate—something copied, pasted, and rarely revisited. Tuufuli is a reminder that, at least in the arbitration context, a few carefully chosen words can do real work. If an arbitration agreement expressly states that it is governed by the Federal Arbitration Act (FAA), a California Court of Appeal may enforce that choice without first litigating whether the underlying relationship “involves” interstate commerce.
That detail matters more than it might seem. The FAA’s pro-arbitration framework often determines the early trajectory of a dispute: whether the case stays in court at all, how quickly it moves, and whether class claims survive past the pleading stage. In other words, this is not academic drafting—it can shape the outcome before the merits are ever reached.
What Happened
West Coast Dental manages business operations and administrative support for affiliated dental practices throughout California. It hired Sinedou Tuufuli in August 2017 as a collector/customer service representative. Around the time of hire, Tuufuli electronically signed an arbitration agreement requiring “final and binding arbitration” for disputes related to her employment or termination.
Two provisions ended up driving the appeal:
Class and representative-action waiver: Providing that the arbitrator lacked authority to certify or adjudicate class, collective, or representative claims, or to award classwide relief.
Governing-law clause: Stating that the agreement “shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.”
In April 2023, Tuufuli filed suit asserting individual and putative class claims for alleged Labor Code and Business & Professions Code violations. West Coast Dental moved to compel arbitration of the individual claims and to dismiss the class claims based on the waiver. The trial court granted the motion and, as a threshold matter, found that the FAA applied—relying both on evidence of the company’s out-of-state connections and on the agreement’s express FAA clause.
Tuufuli appealed on a single issue: whether the FAA governed at all.
The Holding: FAA by Agreement
The Court of Appeal affirmed, and the takeaway is straightforward and highly practical: the FAA can govern an arbitration agreement because the parties agreed that it would.
Tuufuli argued that the FAA cannot apply unless the employer proves the contract “evidenc[es] a transaction involving commerce” under FAA section 2. She relied heavily on Allied-Bruce Terminix Cos. v. Dobson, where the U.S. Supreme Court interpreted “involving commerce” broadly and held that the FAA may apply even if the parties did not contemplate interstate commerce at the time of contracting.
But the court explained why that argument missed the point. Allied-Bruce addressed how broadly “involving commerce” should be read; it did not hold that proof of interstate commerce is the exclusive gateway to FAA governance in every case. Under California law, arbitration is fundamentally a matter of consent. Parties are generally free to structure arbitration agreements as they see fit—including by expressly electing FAA governance.
The court also emphasized an important limit. Certain FAA provisions cannot be contracted around. For example, FAA section 1 expressly exempts certain transportation workers’ employment contracts; a transportation worker cannot be forced into FAA arbitration simply because a contract says “FAA.” But that type of express statutory exemption is different from section 2’s “involving commerce” language. Section 2 makes arbitration agreements enforceable when commerce is involved; it does not require courts to litigate interstate-commerce evidence as a threshold matter when the parties have clearly chosen the FAA to govern their agreement.
Having concluded that the FAA applied by agreement, the court expressly declined to decide whether the employer’s evidence independently established interstate-commerce involvement.
Why This Matters for Horst Clients
For employers—and really, any business that uses arbitration agreements at scale—Tuufuli is both a drafting lesson and a litigation-strategy case.
A Clear “FAA Governs” Sentence Can Narrow the Fight
If the agreement expressly adopts the FAA, the parties may avoid an early evidentiary skirmish over interstate commerce in cases where everything appears to have occurred in California. That does not eliminate other enforceability challenges, but it can streamline the front end of the dispute.
FAA Governance Paired with a Class Waiver Can Be Outcome-Determinative Early
Here, the trial court compelled arbitration of individual claims and dismissed the class claims because the agreement prohibited class proceedings. If class exposure is part of your risk profile, the arbitration clause is not a formality—it is a budgeting and risk-management tool.
Arbitration Language Is Not One-Size-Fits-All
Choice-of-law provisions and arbitration provisions interact. If a business wants the practical benefits of the FAA’s enforcement framework, the agreement should say so clearly—and the rest of the clause (scope, delegation, fees, severability, representative-action waivers) should be aligned with that objective.
Practical Drafting Takeaways
Without turning the agreement into a law review article:
Use a clear statement that the arbitration agreement “shall be governed by the Federal Arbitration Act.”
Keep the clause internally consistent and avoid muddled carve-outs that invite motion practice.
If using a class or representative-action waiver, make sure the language is direct and that the intended remedy (dismissal or stay) is thought through from a business perspective.
Bottom Line
Tuufuli reinforces a pragmatic point that California businesses sometimes overlook: courts often enforce arbitration provisions according to their terms. If an agreement clearly states that the FAA governs, a court may treat that as the end of the FAA inquiry—and move quickly to the questions that actually drive outcomes, including arbitrability and class-waiver enforcement.