Jеffrey G. Harden appeals the district court’s order compelling arbitration. Roadway Package Systems, Inc. (“RPS”) sought summary judgment or in the alternative mutually binding arbitration of Harden’s claims under the California Fair Employment and Housing Act (“FEHA”). The principal issue in this case is whether the district court erred in compelling arbitration. We conclude that the Federal Arbitration Act (“FAA”) does not apply to this case, and, since the motion to compel arbitration was not based on state law, the district court lacked the authority to compel arbitration.
I. FACTUAL AND PROCEDURAL BACKGROUND
On February 12, 1990, Harden signed a contract to begin working as a driver for RPS. On December 6,1995, Harden signed a new, sixty-six page contract to engage in “providing a small package information, transportation and delivery service throughout the United States, with connecting international service.” Two weeks beforе signing the agreement, Harden and the other drivers were told that they could not continue working for RPS without signing the new contract. The new contract contained a provision, Section 1 12.3, which compels “arbitration of asserted wrongful termination.” Section 12.3(a) requires written notice of a demand for arbitration within ninety days of the termination. Furthermore, Section 12.3(d) states:
As to any dispute or controversy which under the terms hereof is made subject to arbitration, no suit at law or in equity based on such dispute or controvеrsy shall be instituted by either party hereto, other than a suit to confirm, enforce, vacate, modify or correct the award of the arbitrator as provided by law
On April 19, 1996, RPS tеrminated Plar-den’s employment. Five days later, he filed charges of unfair labor practices with the National Labor Relations Board. On September 30, 1996, Harden, a Califоrnia resident and African-American male, fried a complaint alleging racial discrimination with the California Fair Employment and Housing Agency. Harden received a right to suе letter on May 29, 1997. Soon thereafter, Harden filéd a lawsuit against RPS, a Delaware corporation, in California Superior Court. Harden claimed (1) racial employmеnt discrimination, (2) wrongful termination for union interest, and (3) wrongful termination for no good cause. On July 3, 1997, RPS removed the case to federal district court pursuant to 28 U.S.C. §§ 1331, 1332(a).
On December 15, 1997, RPS filеd a motion for summary judgment or to compel arbitration. In support of its motion to compel arbitration, RPS relied almost exclusively on Supreme Court and Ninth Circuit precedents enforcing contractual provisions that compel arbitration under the FAA.
See, e.g., Gilmer v. Interstate/John
*1140
son Lane Corp.,
Two weeks later, the district court granted RPS’s motion for summary judgment with respect to Harden’s second claim because it was precluded by the National Labor Relations Act. The district court also granted RPS’s motion to compel arbitration with respect to Harden’s first and third claims. In compelling arbitration of the remaining FEHA claims, the district court issued a one-sentence order that referred to neither federal nor state law. Harden timely apрeals the order compelling arbitration.
II. DISCUSSION
A.STANDARD OF REVIEW
We review de novo the district court’s order compelling arbitration.
See Quackenbush v. Allstate Ins. Co.,
B.JURISDICTION
The district court had subject matter jurisdiction because of diversity of citizenship. See 28 U.S.C. § 1332. The district court’s order precluding one of the appеllant’s claims and compelling arbitration in the others dismissed the case. Therefore, we have subject matter jurisdiction over this case pursuant to the final judgment rule. See 28 U.S.C. § 1291. 1
C.THE APPLICABILITY OF THE FAA
The distriсt court lacked the authority to compel arbitration in this case because the FAA is inapplicable to drivers, like Harden, who are engaged in interstate cоmmerce. Section 1 of the FAA says: “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. The Supreme Court recently affirmed that § 1 exempts transportation workers from the FAA.
See Circuit City Stores, Inc. v. Adams,
— U.S.-,-,
RPS argues that § 1 of the FAA is not fatal to its case because the motion to compel was based on state law. However, RPS’s position is factually incorrect. 2 In *1141 support of its motion to compel arbitration, RPS relied almost exclusively on federal cases that support the enforcement of the FAA. Furthermore, RPS never cited the California Arbitration Act or any California cases supporting the enforcement of the state statutory equivalent of the FAA. Given the district court’s onе-sentence order compelling arbitration and RPS’s exclusive reliance on the FAA and federal' case law, we conclude that the motion to compel аrbitration was based on the FAA.
RPS also argues that Harden was an independent contractor, and therefore (1) his FEHA claims are invalid and (2) section 1 of the FAA does not apply to this case because no employment contract exists. RPS, however, raised this argument for the first time on appeal. In the factual background section оf its summary judgment motion, RPS declared, “Harden was an independent contractor under the specific language of the Agreement.” This statement, however, was not made in сonjunction with any legal arguments to which Harden could respond. Nor did the district court make any factual findings on this issue.
Generally, we will not consider arguments made for the first time on appeal, although we have the power to do so.
See Bolker v. Commissioner of Internal Revenue,
We find that none of Bolker’s exceptions applies to this casе. The issue of whether Harden is an independent contractor is not purely one of law. This is a highly factual question in which the NLRB had found that RPS workers such as Harden not to be indeрendent contractors. There was no change in the law while the appeal was pending because, despite our holding in
Craft v. Campbell Soup Co.,
D. UNCONS ClON ABILITY
We also decline to address Harden’s argument that the arbitration agreement is unconscionable. Although this is a diversity case in which statе law controls, we do not have to address California’s law on unconscionability given the inapplicability of the FAA under § 1. 3 Furthermore, California law on arbitration is not controlling because neither RPS nor the district court relied on California arbitration law in compelling arbitration. It is clear that both RPS and the district court relied on the FAA. Since thе FAA is inapplicable to this case, the district court lacked the substantive legal authority to compel arbitration. *1142 Therefore, the district court’s order compelling arbitration is reversed, and this case is remanded for trial on the remaining FEHA claims.
REVERSED and REMANDED.
Notes
. RPS insisted at oral argument that it never relied on the FAA to compel arbitration. In its brief beforе this court, however, RPS *1141 claimed that this court had jurisdiction over the case based on 9 U.S.C § 16(a)(3) o£ the FAA. Furthermore, RPS’s briefs never cited the California Arbitration Act.
. We note that if RPS were to pursue arbitration based on California law, the California Supreme Court's recent decision in
Armendariz v. Foundation Health Psychcare Svcs., Inc.,