PRESTON v. FERRER

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346 OCTOBER TERM, 2007
Syllabus
PRESTON v. FERRER
certiorari to the court of appeal of california,
second appellate district
No. 06–1463. Argued January 14, 2008—Decided February 20, 2008
A contract between respondent Ferrer, who appears on television as
“Judge Alex,” and petitioner Preston, an entertainment industry attor
ney, requires arbitration of “any dispute . . . relating to the [contract’s]
terms . . . or the breach, validity, or legality thereof . . . in accordance
with [American Arbitration Association (AAA)] rules.” Preston in
voked this provision to gain fees allegedly due under the contract. Fer
rer thereupon petitioned the California Labor Commissioner (Labor
Commissioner) for a determination that the contract was invalid and
unenforceable under California’s Talent Agencies Act (TAA) because
Preston had acted as a talent agent without the required license. After
the Labor Commissioner’s hearing officer denied Ferrer’s motion to stay
the arbitration, Ferrer filed suit in state court seeking to enjoin arbitra
tion, and Preston moved to compel arbitration. The court denied Pres
ton’s motion and enjoined him from proceeding before the arbitrator
unless and until the Labor Commissioner determined she lacked juris
diction over the dispute. While Preston’s appeal was pending, this
Court held, in Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440,
446, that challenges to the validity of a contract requiring arbitration of
disputes ordinarily “should . . . be considered by an arbitrator, not a
court.” Affirming the judgment below, the California Court of Appeal
held that the TAA vested the Labor Commissioner with exclusive origi
nal jurisdiction over the dispute, and that Buckeye was inapposite
because it did not involve an administrative agency with exclusive juris
diction over a disputed issue.
Held: When parties agree to arbitrate all questions arising under a con
tract, the Federal Arbitration Act (FAA), 9 U. S. C. § 1 et seq., super
sedes state laws lodging primary jurisdiction in another forum, whether
judicial or administrative. Pp. 352–363.
(a) The issue is not whether the FAA preempts the TAA wholesale.
Instead, the question is simply who decides—the arbitrator or the Labor
Commissioner—whether Preston acted as an unlicensed talent agent in
violation of the TAA, as Ferrer claims, or as a personal manager not
governed by the TAA, as Preston contends. P. 352.
(b) FAA § 2 “declare[s] a national policy favoring arbitration” when
the parties contract for that mode of dispute resolution. Southland
Corp. v. Keating, 465 U. S. 1, 10. That national policy “appli[es] in state

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as well as federal courts” and “foreclose[s] state legislative attempts to
undercut the enforceability of arbitration agreements.” Id., at 16.
The FAA’s displacement of conflicting state law has been repeatedly
reaffirmed. See, e. g., Buckeye, 546 U. S., at 445–446; Allied-Bruce
Terminix Cos. v. Dobson, 513 U. S. 265, 272. A recurring question
under § 2 is who should decide whether “grounds . . . exist at law or in
equity” to invalidate an arbitration agreement. In Prima Paint Corp.
v. Flood & Conklin Mfg. Co., 388 U. S. 395, 403–404, which originated
in federal court, this Court held that attacks on an entire contract’s
validity, as distinct from attacks on the arbitration clause alone, are
within the arbitrator’s ken. Buckeye held that the same rule applies in
state court. See 546 U. S., at 446.
Buckeye largely, if not entirely, resolves the present dispute. The
contract at issue clearly “evidenc[ed] a transaction involving commerce”
under § 2, and Ferrer has never disputed that the contract’s written
arbitration provision falls within § 2’s purview. Ferrer sought invalida
tion of the contract as a whole. He made no discrete challenge to the
validity of the arbitration clause, and thus sought to override that clause
on a ground Buckeye requires the arbitrator to decide in the first in
stance. Pp. 352–354.
(c) Ferrer attempts to distinguish Buckeye, urging that the TAA
merely requires exhaustion of administrative remedies before the par
ties proceed to arbitration. This argument is unconvincing. Pp. 354–
359.
(1) Procedural prescriptions of the TAA conflict with the FAA’s dis
pute resolution regime in two basic respects: (1) One TAA provision
grants the Labor Commissioner exclusive jurisdiction to decide an issue
that the parties agreed to arbitrate, see Buckeye, 546 U. S., at 446;
(2) another imposes prerequisites to enforcement of an arbitration
agreement that are not applicable to contracts generally, see Doctor’s
Associates, Inc. v. Casarotto, 517 U. S. 681, 687. Pp. 354–356.
(2) Ferrer contends that the TAA is compatible with the FAA be
cause the TAA provision vesting exclusive jurisdiction in the Labor
Commissioner merely postpones arbitration. That position is contrary
to the one Ferrer took in the California courts and does not withstand
examination. Arbitration, if it ever occurred following the Labor Com
missioner’s decision, would likely be long delayed, in contravention of
Congress’ intent “to move the parties to an arbitrable dispute out of
court and into arbitration as quickly and easily as possible.” Moses H.
Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 22.
Pp. 356–358.
(3) Ferrer contends that the conflict between the arbitration clause
and the TAA should be overlooked because Labor Commissioner pro

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348 PRESTON v. FERRER
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ceedings are administrative rather than judicial. The Court rejected a
similar argument in Gilmer v. Interstate/Johnson Lane Corp., 500 U. S.
20, 28–29. Pp. 358–359.
(d) Ferrer’s reliance on Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior Univ., 489 U. S. 468, is misplaced
for two reasons. First, arbitration was stayed in Volt to accommodate
litigation involving third parties who were strangers to the arbitration
agreement. Because the contract at issue in Volt did not address the
order of proceedings and included a choice-of-law clause adopting Cali
fornia law, the Volt Court recognized as the gap filler a California stat
ute authorizing the state court to stay either third-party court proceed
ings or arbitration proceedings to avoid the possibility of conflicting
rulings on a common issue. Here, in contrast, the arbitration clause
speaks to the matter in controversy; both parties are bound by the arbi
tration agreement; the question of Preston’s status as a talent agent
relates to the validity or legality of the contract; there is no risk that
related litigation will yield conflicting rulings on common issues; and
there is no other procedural void for the choice-of-law clause to fill.
Second, the Court is guided by its decision in Mastrobuono v. Shearson
Lehman Hutton, Inc., 514 U. S. 52. Although the Volt contract pro
vided for arbitration in accordance with AAA rules, 489 U. S., at 470,
n. 1, Volt never argued that incorporation of those rules by reference
trumped the contract’s choice-of-law clause, so this Court never ad
dressed the import of such incorporation. In Mastrobuono, the Court
reached that open question, declaring that the “best way to harmonize”
a New York choice-of-law clause and a clause providing for arbitration
in accordance with privately promulgated arbitration rules was to read
the choice-of-law clause “to encompass substantive principles that New
York courts would apply, but not to include [New York’s] special rules
limiting [arbitrators’] authority.” 514 U. S., at 63–64. Similarly here,
the “best way to harmonize” the Ferrer-Preston contract’s adoption of
the AAA rules and its selection of California law is to read the latter to
encompass prescriptions governing the parties’ substantive rights and
obligations, but not the State’s “special rules limiting [arbitrators’] au
thority.” Ibid. Pp. 360–363.
145 Cal. App. 4th 440, 51 Cal. Rptr. 3d 628, reversed and remanded.
Ginsburg, J., delivered the opinion of the Court, in which Roberts,
C. J., and Stevens, Scalia, Kennedy, Souter, Breyer, and Alito, JJ.,
joined. Thomas, J., filed a dissenting opinion, post, p. 363.
Joseph D. Schleimer argued the cause for petitioner.
With him on the briefs was Kenneth D. Freundlich.

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G. Eric Brunstad, Jr., argued the cause for respondent.
With him on the brief were Rheba Rutkowski, Brian R.
Hole, Collin O’Connor Udell, and Robert M. Dudnik.*
Justice Ginsburg delivered the opinion of the Court.
As this Court recognized in Southland Corp. v. Keating,
465 U. S. 1 (1984), the Federal Arbitration Act (FAA or Act),
9 U. S. C. § 1 et seq. (2000 ed. and Supp. V), establishes a
national policy favoring arbitration when the parties con
tract for that mode of dispute resolution. The Act, which
rests on Congress’ authority under the Commerce Clause,
supplies not simply a procedural framework applicable in
federal courts; it also calls for the application, in state as
well as federal courts, of federal substantive law regarding
arbitration. 465 U. S., at 16. More recently, in Buckeye
Check Cashing, Inc. v. Cardegna, 546 U. S. 440 (2006), the
Court clarified that, when parties agree to arbitrate all dis
putes arising under their contract, questions concerning the
validity of the entire contract are to be resolved by the arbi
trator in the first instance, not by a federal or state court.
The instant petition presents the following question: Does
the FAA override not only state statutes that refer certain
state-law controversies initially to a judicial forum, but also
state statutes that refer certain disputes initially to an ad
ministrative agency? We hold today that, when parties
agree to arbitrate all questions arising under a contract,
state laws lodging primary jurisdiction in another forum,
*Briefs of amici curiae urging reversal were filed for the Chamber of
Commerce of the United States of America by Gene C. Schaerr, Steffen
N. Johnson, Robin S. Conrad, Amar D. Sarwal, and Linda T. Coberly; for
CTIA–The Wireless Association by Andrew J. Pincus, Evan M. Tager,
David M. Gossett, and Michael F. Altschul; for Macy’s Group Inc. by Glen
D. Nager and C. Kevin Marshall; and for the Pacific Legal Foundation by
Deborah J. La Fetra and Timothy Sandefur.
Briefs of amici curiae urging affirmance were filed for the Screen
Actors Guild, Inc., et al. by Duncan Crabtree-Ireland and Danielle S. Van
Lier; and for the William Morris Agency by David J. Bederman.

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350 PRESTON v. FERRER
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whether judicial or administrative, are superseded by
the FAA.
I
This case concerns a contract between respondent Alex
E. Ferrer, a former Florida trial court judge who currently
appears as “Judge Alex” on a Fox television network pro
gram, and petitioner Arnold M. Preston, a California attor
ney who renders services to persons in the entertainment
industry. Seeking fees allegedly due under the contract,
Preston invoked the parties’ agreement to arbitrate “any
dispute . . . relating to the terms of [the contract] or the
breach, validity, or legality thereof . . . in accordance with the
rules [of the American Arbitration Association].” App. 18.
Preston’s demand for arbitration, made in June 2005, was
countered a month later by Ferrer’s petition to the California
Labor Commissioner charging that the contract was invalid
and unenforceable under the California Talent Agencies Act
(TAA), Cal. Lab. Code Ann. § 1700 et seq. (West 2003 and
Supp. 2008). Ferrer asserted that Preston acted as a talent
agent without the license required by the TAA, and that
Preston’s unlicensed status rendered the entire contract
void.1
The Labor Commissioner’s hearing officer, in November
2005, determined that Ferrer had stated a “colorable basis
for exercise of the Labor Commissioner’s jurisdiction.”
App. 33. The officer denied Ferrer’s motion to stay the arbi
tration, however, on the ground that the Labor Commis
sioner lacked authority to order such relief. Ferrer then
filed suit in the Los Angeles Superior Court, seeking a decla
ration that the controversy between the parties “arising
from the [c]ontract, including in particular the issue of the
validity of the [c]ontract, is not subject to arbitration.” Id.,
1 The TAA uses the term “talent agency” to describe both corporations
and individual talent agents. We use the terms “talent agent” and “tal
ent agency” interchangeably.

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at 29. As interim relief, Ferrer sought an injunction re
straining Preston from proceeding before the arbitrator.
Preston responded by moving to compel arbitration.
In December 2005, the Superior Court denied Preston’s
motion to compel arbitration and enjoined Preston from pro
ceeding before the arbitrator “unless and until the Labor
Commissioner determines that . . . she is without juris
diction over the disputes between Preston and Ferrer.”
No. BC342454 (Dec. 7, 2005), App. C to Pet. for Cert. 18a,
26a–27a. During the pendency of Preston’s appeal from the
Superior Court’s decision, this Court reaffirmed, in Buckeye,
that challenges to the validity of a contract providing for
arbitration ordinarily “should . . . be considered by an arbi
trator, not a court.” 546 U. S., at 446.
In a 2-to-1 decision issued in November 2006, the Califor
nia Court of Appeal affirmed the Superior Court’s judgment.
The appeals court held that the relevant provision of the
TAA, Cal. Lab. Code Ann. § 1700.44(a) (West 2003), vests
“exclusive original jurisdiction” over the dispute in the
Labor Commissioner. 145 Cal. App. 4th 440, 447, 51 Cal.
Rptr. 3d 628, 634. Buckeye is “inapposite,” the court said,
because that case “did not involve an administrative agency
with exclusive jurisdiction over a disputed issue.” 145 Cal.
App. 4th, at 447, 51 Cal. Rptr. 3d, at 634. The dissenting
judge, in contrast, viewed Buckeye as controlling; she rea
soned that the FAA called for immediate recognition and
enforcement of the parties’ agreement to arbitrate and af
forded no basis for distinguishing prior resort to a state ad
ministrative agency from prior resort to a state court. 145
Cal. App. 4th, at 450–451, 51 Cal. Rptr. 3d, at 636–637 (Vogel,
J., dissenting).
The California Supreme Court denied Preston’s petition
for review. No. S149190 (Feb. 14, 2007), 2007 Cal. LEXIS
1539, App. A to Pet. for Cert. 1a. We granted certiorari to
determine whether the FAA overrides a state law vesting

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initial adjudicatory authority in an administrative agency.
551 U. S. 1190 (2007).
II
An easily stated question underlies this controversy.
Ferrer claims that Preston was a talent agent who operated
without a license in violation of the TAA. Accordingly, he
urges, the contract between the parties, purportedly for
“personal management,” is void, and Preston is entitled to
no compensation for any services he rendered. Preston, on
the other hand, maintains that he acted as a personal man
ager, not as a talent agent, hence his contract with Ferrer is
not governed by the TAA and is both lawful and fully bind
ing on the parties.
Because the contract between Ferrer and Preston pro
vides that “any dispute . . . relating to the . . . validity, or
legality,” of the agreement “shall be submitted to arbitra
tion,” App. 18, Preston urges that Ferrer must litigate “his
TAA defense in the arbitral forum,” Reply Brief 31. Ferrer
insists, however, that the “personal manager” or “talent
agent” inquiry falls, under California law, within the exclu
sive original jurisdiction of the Labor Commissioner, and
that the FAA does not displace the Commissioner’s primary
jurisdiction. Brief for Respondent 14, 30, 40–44.
The dispositive issue, then, contrary to Ferrer’s sugges
tion, is not whether the FAA preempts the TAA wholesale.
See id., at 44–48. The FAA plainly has no such destructive
aim or effect. Instead, the question is simply who decides
whether Preston acted as personal manager or as talent
agent.
III
Section 2 of the FAA states:
“A written provision in any . . . contract evidencing a
transaction involving commerce to settle by arbitration
a controversy thereafter arising out of such contract or
transaction . . . shall be valid, irrevocable, and enforce

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able, save upon such grounds as exist at law or in equity
for the revocation of any contract.” 9 U. S. C. § 2.
Section 2 “declare[s] a national policy favoring arbitration”
of claims that parties contract to settle in that manner.
Southland Corp., 465 U. S., at 10. That national policy, we
held in Southland, “appli[es] in state as well as federal
courts” and “foreclose[s] state legislative attempts to under
cut the enforceability of arbitration agreements.” Id., at 16.
The FAA’s displacement of conflicting state law is “now
well-established,” Allied-Bruce Terminix Cos. v. Dobson,
513 U. S. 265, 272 (1995), and has been repeatedly reaffirmed,
see, e. g., Buckeye, 546 U. S., at 445–446; Doctor’s Associates,
Inc. v. Casarotto, 517 U. S. 681, 684–685 (1996); Perry v.
Thomas, 482 U. S. 483, 489 (1987).2
A recurring question under § 2 is who should decide
whether “grounds . . . exist at law or in equity” to invalidate
an arbitration agreement. In Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 388 U. S. 395, 403–404 (1967), we held that
attacks on the validity of an entire contract, as distinct from
attacks aimed at the arbitration clause, are within the arbi
trator’s ken.
The litigation in Prima Paint originated in federal court,
but the same rule, we held in Buckeye, applies in state court.
546 U. S., at 447–448. The plaintiffs in Buckeye alleged that
the contracts they signed, which contained arbitration
clauses, were illegal under state law and void ab initio. Id.,
at 443. Relying on Southland, we held that the plaintiffs’
challenge was within the province of the arbitrator to decide.
See 546 U. S., at 446.
2 Although Ferrer urges us to overrule Southland, he relies on the same
arguments we considered and rejected in Allied-Bruce Terminix Cos. v.
Dobson, 513 U. S. 265 (1995). Compare Brief for Respondent 55–59 with
Brief for Attorney General of Alabama et al. as Amici Curiae in Allied-
Bruce Terminix Cos. v. Dobson, O. T. 1994, No. 93–1001, pp. 11–19. Ad
hering to precedent, we do not take up Ferrer’s invitation to overrule
Southland.

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Buckeye largely, if not entirely, resolves the dispute before
us. The contract between Preston and Ferrer clearly “evi
denc[ed] a transaction involving commerce,” 9 U. S. C. § 2,
and Ferrer has never disputed that the written arbitration
provision in the contract falls within the purview of § 2.
Moreover, Ferrer sought invalidation of the contract as a
whole. In the proceedings below, he made no discrete chal
lenge to the validity of the arbitration clause. See 145 Cal.
App. 4th, at 449, 51 Cal. Rptr. 3d, at 635 (Vogel, J., dissent
ing).3 Ferrer thus urged the Labor Commissioner and Cali
fornia courts to override the contract’s arbitration clause on
a ground that Buckeye requires the arbitrator to decide in
the first instance.
IV
Ferrer attempts to distinguish Buckeye by arguing that
the TAA merely requires exhaustion of administrative reme
dies before the parties proceed to arbitration. We reject
that argument.
A
The TAA regulates talent agents and talent agency agree
ments. “Talent agency” is defined, with exceptions not rele
vant here, as “a person or corporation who engages in the
occupation of procuring, offering, promising, or attempting to
procure employment or engagements for an artist or artists.”
Cal. Lab. Code Ann. § 1700.4(a) (West 2003). The definition
3 Ferrer’s petition to the Labor Commissioner sought a declaration that
the contract “is void under the [TAA].” App. 23. His complaint in Supe
rior Court seeking to enjoin arbitration asserted: “[T]he [c]ontract is void
by reason of [Preston’s] attempt to procure employment for [Ferrer] in
violation of the [TAA],” and “the [c]ontract’s arbitration clause does not
vest authority in an arbitrator to determine whether the contract is void.”
Id., at 27. His brief in the appeals court stated: “Ferrer does not contend
that the arbitration clause in the [c]ontract was procured by fraud. Fer
rer contends that Preston unlawfully acted as an unlicensed talent agent
and hence cannot enforce the [c]ontract.” Brief for Respondent in
No. B188997, p. 18.

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“does not cover other services for which artists often con
tract, such as personal and career management (i. e., advice,
direction, coordination, and oversight with respect to an art
ist’s career or personal or financial affairs).” Styne v. Ste
vens, 26 Cal. 4th 42, 51, 26 P. 3d 343, 349 (2001) (emphasis
deleted). The TAA requires talent agents to procure a li
cense from the Labor Commissioner. § 1700.5. “In further
ance of the [TAA’s] protective aims, an unlicensed person’s
contract with an artist to provide the services of a talent
agency is illegal and void.” Ibid.4
Section 1700.44(a) of the TAA states:
“In cases of controversy arising under this chapter, the
parties involved shall refer the matters in dispute to the
Labor Commissioner, who shall hear and determine the
same, subject to an appeal within 10 days after determi
nation, to the superior court where the same shall be
heard de novo.”
Absent a notice of appeal filed within ten days, the Labor
Commissioner’s determination becomes final and binding on
the parties. REO Broadcasting Consultants v. Martin, 69
Cal. App. 4th 489, 495, 81 Cal. Rptr. 2d 639, 642–643 (1999).5
The TAA permits arbitration in lieu of proceeding before
the Labor Commissioner if an arbitration provision “in a con
tract between a talent agency and [an artist]” both “provides
for reasonable notice to the Labor Commissioner of the time
and place of all arbitration hearings” and gives the Com
4 Courts “may void the entire contract” where talent agency services
regulated by the TAA are “inseparable from [unregulated] managerial
services.” Marathon Entertainment, Inc. v. Blasi, 42 Cal. 4th 974, 998,
174 P. 3d 741, 744 (2008). If the contractual terms are severable, however,
“an isolated instance” of unlicensed conduct “does not automatically bar
recovery for services that could lawfully be provided without a license.”
Ibid.
5 To appeal the Labor Commissioner’s decision, an aggrieved party must
post a bond of at least $1,000 and up to twice the amount of any judgment
approved by the Commissioner. § 1700.44(a).

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missioner “the right to attend all arbitration hearings.”
§ 1700.45. This prescription demonstrates that there is no
inherent conflict between the TAA and arbitration as a dis
pute resolution mechanism. But § 1700.45 was of no utility
to Preston. He has consistently maintained that he is not a
talent agent as that term is defined in § 1700.4(a), but is, in
stead, a personal manager not subject to the TAA’s regula
tory regime. 145 Cal. App. 4th, at 444, 51 Cal. Rptr. 3d, at
631. To invoke § 1700.45, Preston would have been required
to concede a point fatal to his claim for compensation—i. e.,
that he is a talent agent, albeit an unlicensed one—and to
have drafted his contract in compliance with a statute that
he maintains is inapplicable.
Procedural prescriptions of the TAA thus conflict with the
FAA’s dispute resolution regime in two basic respects: First,
the TAA, in § 1700.44(a), grants the Labor Commissioner ex
clusive jurisdiction to decide an issue that the parties agreed
to arbitrate, see Buckeye, 546 U. S., at 446; second, the TAA,
in § 1700.45, imposes prerequisites to enforcement of an arbi
tration agreement that are not applicable to contracts gener
ally, see Doctor’s Associates, Inc., 517 U. S., at 687.
B
Ferrer contends that the TAA is nevertheless compatible
with the FAA because § 1700.44(a) merely postpones arbitra
tion until after the Labor Commissioner has exercised her
primary jurisdiction. Brief for Respondent 14, 40. The
party that loses before the Labor Commissioner may file
for de novo review in Superior Court. See § 1700.44(a). At
that point, Ferrer asserts, either party could move to compel
arbitration under Cal. Civ. Proc. Code Ann. § 1281.2 (West
2007), and thereby obtain an arbitrator’s determination prior
to judicial review. See Brief for Respondent 13.
That is not the position Ferrer took in the California
courts. In his complaint, he urged the Superior Court to

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declare that “the [c]ontract, including in particular the issue
of the validity of the [c]ontract, is not subject to arbitration,”
and he sought an injunction stopping arbitration “unless and
until, if ever, the Labor Commissioner determines that he/
she has no jurisdiction over the parties’ dispute.” App. 29
(emphasis added). Ferrer also told the Superior Court:
“[I]f . . . the Commissioner rules that the [c]ontract is void,
Preston may appeal that ruling and have a hearing de novo
before this Court.” Appellant’s App. in No. B188997 (Cal.
App.), p. 157, n. 1 (emphasis added).
Nor does Ferrer’s current argument—that § 1700.44(a)
merely postpones arbitration—withstand examination.
Section 1700.44(a) provides for de novo review in Superior
Court, not elsewhere.6 Arbitration, if it ever occurred fol
lowing the Labor Commissioner’s decision, would likely be
long delayed, in contravention of Congress’ intent “to move
the parties to an arbitrable dispute out of court and into arbi
tration as quickly and easily as possible.” Moses H. Cone
Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 22
(1983). If Ferrer prevailed in the California courts, more
over, he would no doubt argue that judicial findings of fact
and conclusions of law, made after a full and fair de novo
hearing in court, are binding on the parties and preclude the
arbitrator from making any contrary rulings.
A prime objective of an agreement to arbitrate is to
achieve “streamlined proceedings and expeditious results.”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
6 From Superior Court an appeal lies in the Court of Appeal. Cal. Civ.
Proc. Code Ann. § 904.1(a) (West 2007); Cal. Rule of Court 8.100(a) (Appel
late Rules) (West 2007 rev. ed.). Thereafter, the losing party may seek
review in the California Supreme Court, Rule 8.500(a)(1) (Appellate
Rules), perhaps followed by a petition for a writ of certiorari in this Court,
28 U. S. C. § 1257. Ferrer has not identified a single case holding that
California law permits interruption of this chain of appeals to allow the
arbitrator to review the Labor Commissioner’s decision. See Tr. of Oral
Arg. 35.

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473 U. S. 614, 633 (1985). See also Allied-Bruce Terminix
Cos., 513 U. S., at 278; Southland Corp., 465 U. S., at 7. That
objective would be frustrated even if Preston could compel
arbitration in lieu of de novo Superior Court review. Re
quiring initial reference of the parties’ dispute to the Labor
Commissioner would, at the least, hinder speedy resolution
of the controversy.
Ferrer asks us to overlook the apparent conflict between
the arbitration clause and § 1700.44(a) because proceedings
before the Labor Commissioner are administrative rather
than judicial. Brief for Respondent 40–48. Allowing par
ties to proceed directly to arbitration, Ferrer contends,
would undermine the Labor Commissioner’s ability to stay
informed of potentially illegal activity, id., at 43, and would
deprive artists protected by the TAA of the Labor Commis
sioner’s expertise, id., at 41–43.
In Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20
(1991), we considered and rejected a similar argument,
namely, that arbitration of age discrimination claims would
undermine the role of the Equal Employment Opportunity
Commission (EEOC) in enforcing federal law. The “mere
involvement of an administrative agency in the enforcement
of a statute,” we held, does not limit private parties’ ob
ligation to comply with their arbitration agreements. Id.,
at 28–29.
Ferrer points to our holding in EEOC v. Waffle House,
Inc., 534 U. S. 279, 293–294 (2002), that an arbitration agree
ment signed by an employee who becomes a discrimination
complainant does not bar the EEOC from filing an enforce
ment suit in its own name. He further emphasizes our ob
servation in Gilmer that individuals who agreed to arbitrate
their discrimination claims would “still be free to file a
charge with the EEOC.” 500 U. S., at 28. Consistent with
these decisions, Ferrer argues, the arbitration clause in his
contract with Preston leaves undisturbed the Labor Com

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359 Cite as: 552 U. S. 346 (2008)
Opinion of the Court
missioner’s independent authority to enforce the TAA. See
Brief for Respondent 44–48. And so it may.7 But in pro
ceedings under § 1700.44(a), the Labor Commissioner func
tions not as an advocate advancing a cause before a tribunal
authorized to find the facts and apply the law; instead, the
Commissioner serves as impartial arbiter. That role is just
what the FAA-governed agreement between Ferrer and
Preston reserves for the arbitrator. In contrast, in Waffle
House and in the Gilmer aside Ferrer quotes, the Court ad
dressed the role of an agency, not as adjudicator but as prose
cutor, pursuing an enforcement action in its own name or
reviewing a discrimination charge to determine whether to
initiate judicial proceedings.
Finally, it bears repeating that Preston’s petition presents
precisely and only a question concerning the forum in which
the parties’ dispute will be heard. See supra, at 352. “By
agreeing to arbitrate a statutory claim, a party does not
forgo the substantive rights afforded by the statute; it only
submits to their resolution in an arbitral . . . forum.” Mitsu
bishi Motors Corp., 473 U. S., at 628. So here, Ferrer relin
quishes no substantive rights the TAA or other California
law may accord him. But under the contract he signed, he
cannot escape resolution of those rights in an arbitral forum.
In sum, we disapprove the distinction between judicial and
administrative proceedings drawn by Ferrer and adopted by
the appeals court. When parties agree to arbitrate all ques
tions arising under a contract, the FAA supersedes state
laws lodging primary jurisdiction in another forum, whether
judicial or administrative.
7 Enforcement of the parties’ arbitration agreement in this case does not
displace any independent authority the Labor Commissioner may have to
investigate and rectify violations of the TAA. See Brief for Respondent
47 (“[T]he Commissioner has independent investigatory authority and may
receive information concerning alleged violations of the TAA from any
source.” (citation omitted)). See also Tr. of Oral Arg. 13–14.

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360 PRESTON v. FERRER
Opinion of the Court
V
Ferrer’s final attempt to distinguish Buckeye relies on Volt
Information Sciences, Inc. v. Board of Trustees of Leland
Stanford Junior Univ., 489 U. S. 468 (1989). Volt involved
a California statute dealing with cases in which “[a] party to
[an] arbitration agreement is also a party to a pending court
action . . . [involving] a third party [not bound by the arbi
tration agreement], arising out of the same transaction or
series of related transactions.” Cal. Civ. Proc. Code Ann.
§ 1281.2(c) (West 2007). To avoid the “possibility of conflict
ing rulings on a common issue of law or fact,” the statute
gives the Superior Court authority, inter alia, to stay the
court proceeding “pending the outcome of the arbitration” or
to stay the arbitration “pending the outcome of the court
action.” Ibid.
Volt Information Sciences and Stanford University were
parties to a construction contract containing an arbitration
clause. When a dispute arose and Volt demanded arbitra
tion, Stanford sued Volt and two other companies involved in
the construction project. Those other companies were not
parties to the arbitration agreement; Stanford sought indem
nification from them in the event that Volt prevailed against
Stanford. At Stanford’s request, the Superior Court stayed
the arbitration. The California Court of Appeal affirmed
the stay order. Volt and Stanford incorporated § 1281.2(c)
into their agreement, the appeals court held. They did so
by stipulating that the contract—otherwise silent on the pri
ority of suits drawing in parties not subject to arbitration—
would be governed by California law. Board of Trustees of
Leland Stanford Junior Univ. v. Volt Information Sciences,
Inc., 240 Cal. Rptr. 558, 561 (1987) (officially depublished).
Relying on the Court of Appeal’s interpretation of the con
tract, we held that the FAA did not bar a stay of arbitration
pending the resolution of Stanford’s Superior Court suit
against Volt and the two companies not bound by the arbitra
tion agreement.

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Opinion of the Court
Preston and Ferrer’s contract also contains a choice-of-law
clause, which states that the “agreement shall be governed
by the laws of the state of California.” App. 17. A sepa
rate saving clause provides: “If there is any conflict between
this agreement and any present or future law,” the law pre
vails over the contract “to the extent necessary to bring [the
contract] within the requirements of said law.” Id., at 18.
Those contractual terms, according to Ferrer, call for the ap
plication of California procedural law, including § 1700.44(a)’s
grant of exclusive jurisdiction to the Labor Commissioner.
Ferrer’s reliance on Volt is misplaced for two discrete rea
sons. First, arbitration was stayed in Volt to accommodate
litigation involving third parties who were strangers to the
arbitration agreement. Nothing in the arbitration agree
ment addressed the order of proceedings when pending liti
gation with third parties presented the prospect of inconsist
ent rulings. We thought it proper, in those circumstances,
to recognize state law as the gap filler.
Here, in contrast, the arbitration clause speaks to the mat
ter in controversy; it states that “any dispute . . . relating
to . . . the breach, validity, or legality” of the contract should
be arbitrated in accordance with the American Arbitration
Association (AAA) rules. App. 18. Both parties are bound
by the arbitration agreement; the question of Preston’s sta
tus as a talent agent relates to the validity or legality of the
contract; there is no risk that related litigation will yield
conflicting rulings on common issues; and there is no other
procedural void for the choice-of-law clause to fill.
Second, we are guided by our more recent decision in
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U. S. 52
(1995). Although the contract in Volt provided for “arbitra
tion in accordance with the Construction Industry Arbitra
tion Rules of the American Arbitration Association,” 489
U. S., at 470, n. 1 (internal quotation marks omitted), Volt
never argued that incorporation of those rules trumped the
choice-of-law clause contained in the contract, see Brief for

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362 PRESTON v. FERRER
Opinion of the Court
Appellant, and Reply Brief, in Volt Information Sciences,
Inc. v. Board of Trustees of Leland Stanford Junior Univ.,
O. T. 1988, No. 87–1318. Therefore, neither our decision in
Volt nor the decision of the California appeals court in that
case addressed the import of the contract’s incorporation by
reference of privately promulgated arbitration rules.
In Mastrobuono, we reached that open question while in
terpreting a contract with both a New York choice-of-law
clause and a clause providing for arbitration in accordance
with the rules of the National Association of Securities Deal
ers (NASD). 514 U. S., at 58–59.8 The “best way to harmo
nize” the two clauses, we held, was to read the choice-of-law
clause “to encompass substantive principles that New York
courts would apply, but not to include [New York’s] special
rules limiting the authority of arbitrators.” Id., at 63–64.
Preston and Ferrer’s contract, as noted, provides for arbi
tration in accordance with the AAA rules. App. 18. One
of those rules states that “[t]he arbitrator shall have the
power to determine the existence or validity of a contract
of which an arbitration clause forms a part.” AAA, Com
mercial Arbitration Rules ¶ R–7(b) (2007), online at http://
www.adr.org/sp.asp?id=22440 (as visited Feb. 15, 2008, and in
Clerk of Court’s case file). The incorporation of the AAA
rules, and in particular Rule 7(b), weighs against inferring
from the choice-of-law clause an understanding shared by
Ferrer and Preston that their disputes would be heard, in
8 The question in Mastrobuono was whether the arbitrator could award
punitive damages. See Mastrobuono v. Shearson Lehman Hutton, Inc.,
514 U. S. 52, 53–54 (1995). New York law prohibited arbitrators, but not
courts, from awarding such damages. Id., at 55. The NASD rules, in
contrast, authorized “damages and other relief,” which, according to an
NASD arbitration manual, included punitive damages. Id., at 61 (internal
quotation marks omitted). Relying on Volt, respondents argued that the
choice-of-law clause incorporated into the parties’ arbitration agreement
New York’s ban on arbitral awards of punitive damages. Opposing that
argument, petitioners successfully urged that the agreement to arbitrate
in accordance with the NASD rules controlled.

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Thomas, J., dissenting
the first instance, by the Labor Commissioner. Following
the guide Mastrobuono provides, the “best way to harmo
nize” the parties’ adoption of the AAA rules and their selec
tion of California law is to read the latter to encompass pre
scriptions governing the substantive rights and obligations
of the parties, but not the State’s “special rules limiting the
authority of arbitrators.” 514 U. S., at 63–64.
* * *
For the reasons stated, the judgment of the California
Court of Appeal is reversed, and the case is remanded for
further proceedings not inconsistent with this opinion.
It is so ordered.
Justice Thomas, dissenting.
As I have stated on many previous occasions, I believe
that the Federal Arbitration Act (FAA), 9 U. S. C. § 1 et seq.
(2000 ed. and Supp. V), does not apply to proceedings in state
courts. See Allied-Bruce Terminix Cos. v. Dobson, 513
U. S. 265, 285–297 (1995) (dissenting opinion); see also
Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440, 449
(2006) (same); Green Tree Financial Corp. v. Bazzle, 539
U. S. 444, 460 (2003) (same); Doctor’s Associates, Inc. v.
Casarotto, 517 U. S. 681, 689 (1996) (same). Thus, in state
court proceedings, the FAA cannot displace a state law that
delays arbitration until administrative proceedings are com
pleted. Accordingly, I would affirm the judgment of the
Court of Appeal.