Ferrer then petitioned the California Labor Commissioner, claiming the contract was invalid and unenforceable under California law, as Preston had allegedly acted as a talent agent without a license.

Preston argued that he was not acting as a talent agent, and that an arbitrator, not a court, should decide whether this was the case.

[3] Citing Southland Corp. v. Keating, the Court noted that it had ruled consistently that the FAA was "a national policy favoring arbitration" when parties contract to settle disputes in that manner, and that it "foreclose[s] state legislative attempts to undercut the enforceability of arbitration agreements."

Ferrer's argument was "unconvincing", the Court ruled, that state law required the exhaustion of administrative remedies before arbitration would commence.

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