Can plaintiffs bring non-individual PAGA claims to avoid arbitration?

A recent California court of appeal decision has addressed the question of whether a plaintiff can file a PAGA claim that is representative only, disavowing any individual PAGA claims, and thereby avoid arbitration altogether. In that case, Leeper v. Shift (December 30, 2024) B339670, the court held that every PAGA action includes an individual PAGA claim regardless of how it is pled by the plaintiff. As a result, that individual PAGA claim may be compelled to arbitration if there is a valid and enforceable arbitration agreement.

Read more: Can plaintiffs bring non-individual PAGA claims to avoid arbitration?

In Leeper, the plaintiff alleged in her complaint that she was bring a single count for “non-individual” PAGA penalties. She further alleged that because she was doing so, Shipt could not compel her claims to arbitration.

Shipt then filed a motion to compel arbitration, which the trial court denied.

The Second District Court of Appeal (DCA) reversed the trial court. The DCA looked first to the statutory language of PAGA, finding that it clearly referred to PAGA actions as being brought “on behalf of the employee and other current or former employees.” (emphasis added.) From this, the DCA concluded that PAGA actions contain both individual and representative components.

The DCA then distinguished several cases, including Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533. Some plaintiffs, including Ms. Leeper, had relied upon that case for the idea that it was possible to file non-individual PAGA claims. The Leeper court rejected that analysis, reasoning that Balderas was about standing, not the question of whether plaintiffs could bring non-individual PAGA claims.

The DCA recognized the adverse results that its holding could have: allowing PAGA claims to be forced into arbitration, resulting in the possible stay of the representative PAGA claims, as well as possible issue preclusion. This means that employers may be able to use Leeper to put representative PAGA claims on ice for significant amounts of time.

The practical impact of Leeper

The practical impact of Leeper is heightened by the California Supreme Court’s recent decision in Turrieta v. Lyft, Inc. (2024) 16 Cal.5th 664. In that case, the Court made it easier for defendants to reverse auction PAGA claims. As Justice Goodwin Liu noted in his dissent, this issue “calls for legislative attention, lest the statute’s goal of strengthening Labor Code enforcement be thwarted by settlement incentives that drive a race to the bottom.”

The attorneys at Hunter Pyle Law PC have handled many PAGA actions against employers large and small. If you have questions about your rights at work, please feel free to contact us and to make use of our free and confidential intake process.