Vela v. Harbor Rail Services of California, Inc.

CourtCalifornia Court of Appeal
DecidedMay 1, 2026
DocketB344723
StatusPublished

This text of Vela v. Harbor Rail Services of California, Inc. (Vela v. Harbor Rail Services of California, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vela v. Harbor Rail Services of California, Inc., (Cal. Ct. App. 2026).

Opinion

Filed 5/1/26 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

ARTURO VELA, B344723

Plaintiff and Appellant, (Los Angeles County Super. Ct. No. 23STCV24281) v.

HARBOR RAIL SERVICES OF CALIFORNIA, INC.,

Defendant and Respondent.

APPEAL from an order of the Superior Court of Los Angeles County, David S. Cunningham III, Judge. Affirmed in part, dismissed in part, treated in part as a petition for writ of mandate and denied. Justice Law Corporation, Douglas Han, Shunt Tatavos- Gharajeh and Talia Lux for Plaintiff and Appellant. Fox Rothschild LLP and Steven Gallagher for Defendant and Respondent. ________________________ INTRODUCTION The Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.)1 exempts from its application “contracts of employment” of “railroad employees, or any other class of workers engaged in foreign or interstate commerce.” (§ 1.) Plaintiff Arturo Vela, who worked for defendant Harbor Rail Services of California, Inc. (Harbor) as a railcar repairman, claims the trial court erred in compelling him to arbitrate claims relating to his employment because he falls within this exemption. Vela also claims that, because the FAA exempts him, the trial court erred in enforcing a waiver of class claims contained in his agreement to arbitrate. Under state law, Vela’s waiver is potentially unenforceable. If federal law applies, it preempts such state law and the waiver is enforceable. We find no error and affirm. The FAA applies to the parties’ agreement to arbitrate and does not exempt Vela. Accordingly, the trial court did not err in compelling arbitration. Nor did the trial court err in striking the class claims, as Vela’s waiver of those claims is enforceable under federal law. FACTUAL AND PROCEDURAL BACKGROUND A. Vela’s Employment with Harbor Harbor hired Vela as a rail freight car repairman on May 19, 2021, and terminated him on October 11, 2021. On May 10, 2021, prior to Vela beginning work, he and Harbor executed a mutual agreement to arbitrate. Under the agreement, the parties “agree[d] to the resolution by arbitration of all claims,

1 All unspecified statutory references are to title 9 of the United States Code.

2 disputes, and/or controversies (collectively ‘claims’), whether or not arising out of [Vela]’s employment or its termination, that [Harbor] may have against [Vela] or that [Vela] may have against [Harbor], its subsidiaries or affiliated entities, or against its employees or agents in their capacity.” The agreement also included a “[c]lass and [r]epresentative [a]ction [w]aiver” under which the parties “agree[d to] . . . forego pursuing any covered dispute on a class, collective, or representative basis and . . . not [to] assert class, collective, or representative action claims against the other in arbitration or otherwise,” with an exception for “representative actions under the California Private Attorneys General Act or any class, collective, or representative claims that cannot be waived as a matter of law.” B. Vela’s Lawsuit Vela sued Harbor on October 5, 2023, asserting causes of action under the Labor Code for unpaid overtime (id., §§ 510, 1198), unpaid meal period premiums (id., §§ 226.7, 512, subd. (a)), unpaid rest period premiums (id., § 226.7), unpaid minimum wages (id., §§ 1194, 1197), failure to timely pay final wages (id., §§ 201, 202), noncompliant wage statements (id., § 226, subd. (a)), and failure to reimburse business expenses (id., §§ 2800, 2802), and a related claim under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). Vela asserted these claims on his own behalf and also on behalf of a would-be class of current and former Harbor employees. Vela did not allege any representative claims under the Labor Code Private Attorneys General Act (Lab. Code, § 2698 et seq.).

3 C. Harbor’s Motion to Enforce the Arbitration Agreement On March 6, 2024, Harbor filed a motion to compel Vela’s individual claims to arbitration and to dismiss and strike his class claims. Harbor relied on the “[m]utual [a]greement to [a]rbitrate” which Vela had signed “in connection with his employment.” Harbor contended that the parties’ arbitration agreement, including the class action waiver provision, was enforceable under the FAA. Thus, argued Harbor, the court was required to compel Vela’s claims to arbitration and to dismiss and strike his class claims. Anticipating Vela’s argument that the arbitration agreement fell within the FAA exemption for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” (§ 1), Harbor asserted that Vela was not a “railroad employee[]” because Harbor was not a railroad company. Harbor further argued that Vela was not in a “class of workers engaged in foreign or interstate commerce” because “[his] work consisted of making repairs to trains that were decommissioned in [a railroad] yard, awaiting inspection and repairs,” he did not inspect any locomotives or move, drive, or operate any trains or freight cars, and his work did not involve the “delivery of goods” or “transport[ation of] any goods across state or foreign lines.” In a declaration, Harbor’s chief operations officer averred as follows. Harbor conducts “freight car inspections and repairs for a number of railroads.” Harbor controls, manages, and oversees the work of its employees, who use Harbor’s equipment to perform their work. During Vela’s employment, Harbor “was under contract as an independent contractor for Pacific Harbor

4 Line (‘PHL’) to perform freight car inspections and repairs at PHL’s train yard in Wilmington, California. Under [the] contract, . . . PHL’s railroad customers, Burlington Northern Santa Fe (‘BNSF[’]) and Union Pacific (‘UP’), would deliver their freight cars using their locomotives to the PHL train yard in Wilmington by stopping them on the interchange track in the yard, disconnecting their locomotives, and leaving the freight cars to sit on the track in the yard, awaiting inspection/repairs.” At this point, the freight cars “were withdrawn from service/decommissioned . . . and . . . were not useable until and unless they passed inspection.” Harbor “employees then would inspect the freight cars using quality control measures established by Federal Regulations . . . [and] would make [any] necessary repairs.” The freight cars were then “released to PHL, and PHL eventually delivered them back to its railroad customers (BNSF or UP) with PHL’s locomotive.” “[Vela] was hired as and did work for Harbor as a [r]epairman at PHL. [Vela]’s work . . . consisted of performing inspection, repair and rebuilding of the decommissioned freight cars at the PHL train yard in accordance to [sic] all A[ssociation of] A[merican] R[ailroads] and F[ederal] R[ailroad] A[dministration] rules.” Vela does not dispute that the FAA (including any applicable exceptions to it) governs the parties’ arbitration agreement. In opposing the motion to compel arbitration, Vela contended that the arbitration agreement was exempted from the FAA because he was a “railroad employee” and a “worker[] engaged in foreign or interstate commerce” under section 1. Vela submitted a declaration in which he averred that he worked for Harbor as a “[r]ailway [r]epairman” from May 2021 to October 2021; he was paid an hourly rate of $19; he repaired train cars

5 following Association of American Railroads and Federal Railroad Administration regulations and, more specifically, he “change[d] trains’ wheels and brake pads, disassemble[d] and reassemble[d] train cars, and . . .

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Vela v. Harbor Rail Services of California, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/vela-v-harbor-rail-services-of-california-inc-calctapp-2026.