“Headless” PAGA Cases: Can a worker disclaim individual PAGA claims in order to avoid arbitration?

A fascinating issue has arisen under California’s Private Attorneys General Act (PAGA): can a worker bring a “headless” PAGA case, in which she disclaims her individual PAGA claims in order to proceed in court on PAGA claims for all other workers? This issue will likely bedevil trial courts until the California Supreme Court resolves it, which, hopefully, will be soon (see below).

The headless PAGA claim question has arisen because many employers are forcing employees to sign arbitration agreements that waive their right to bring class actions. As a result, if those employees want to bring representative claims on behalf of a larger group of workers, they are left with PAGA claims for civil penalties that otherwise could only be recovered by California’s Labor and Workforce Development Agency.

Why headless PAGA claims?

Abitration of wage and hour claims may sound like a good idea: employers tout it as speedy and efficient. In reality, it is anything but. It often takes up to half a year to even select an arbitrator. Then, if that arbitrator is busy, they may not have time to hear the case for years.

Furthermore, appeals from arbitration awards are extremely limited. If a trial court judge gets a legal issue wrong, you can appeal it. If an arbitrator makes the same mistake, you are, generally speaking, stuck with it.

Finally, arbitrators’ decisions are normally binding once the case returns to the trial court. For example, in Rodriguez v. Lawrence Equipment, Inc. (October 10, 2024, 2d DCA, Division 3), the trial court compelled the plaintiff to arbitrate his individual, non-PAGA claims. The plaintiff then lost on those claims in arbitration. The employer then moved for judgment on the pleadings as to the PAGA claims, arguing that they should be dismissed. The trial court granted the motion, and the court of appeal agreed: The trial court had properly found that the arbitration award and resulting judgment precluded the plaintiff from relitigating the Labor Code violations to prove standing to maintain his PAGA cause of action.

For these reasons, many workers who have valid wage and hour claims would prefer to avoid arbitration and to proceed directly in court.

In 2023, in the case of Adolph v. Uber, the California Supreme Court considered a question raised by the US Supreme Court in Viking River Cruises, Inc. v. Moriana: does a worker who is required to arbitrate their individual PAGA claims retain standing to bring PAGA claims on behalf of the other workers? The California Supreme Court held that the answer to this question is yes. To have standing under PAGA, a worker need only meet two requirements: (1) they must have been employed by the alleged violator, and (2) they must have experienced one or more of the alleged violations. Therefore, “where plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA.” 14 Cal.5th 1104, 1114.

Adolph thus opened the door to the possibility of workers bringing PAGA cases in which they only sought PAGA penalties on behalf of other workers. Numerous cases followed that explored the viability of such “headless” PAGA cases.

Recent decisions of the California Courts of Appeal

The first of these cases was Balderas v. Fresh Start Harvesting, Inc. (April 18, 2024, 2d DCA, Div. 6). In that case, the trial court, on its own motion, found that the plaintiff had not brought individual PAGA claims. The trial court therefore concluded that the plaintiff had no standing to bring PAGA claims on behalf of other workers. Division Six of the Second District Court of Appeal reversed, holding that employees can meet the standing requirements of PAGA (described above) without bringing individual PAGA claims.

If Balderas is right on this issue, then workers who wish to bring PAGA claims but have signed arbitration agreements can avoid arbitration by disclaiming any individual PAGA claims. Those workers can thus keep their non-individual cases in court, where they will be free to pursue PAGA claims on behalf of other workers.

Approximately eight months later, however, Division One of the Second District Court of Appeal disagreed with the holding in Balderas. In Leeper v. Shipt, Inc. (December 30, 2024, 2d DCA, Div. 1), the court of appeal held that every PAGA action includes both an individual PAGA claim and a representative PAGA claim because Labor Code section 2699(a) defines a PAGA claim as “a civil action brought by an aggrieved employee on behalf of the employee and other current or former employees.” The court reasoned that that “and” is important, and so a plaintiff cannot disclaim their individual PAGA claims.

If Leeper is right, then workers cannot disclaim their individual PAGA claims. If those workers have signed valid arbitration agreements, then they must pursue their individual PAGA claims in arbitration before bringing the non-individual PAGA claims in court.

Another court of appeal weighed in shortly after Leeper. In Rodriguez v. Packers Sanitation Services Ltd. (February 26, 2025, 4th DCA, Div. 1), the Fourth District Court of Appeal considered this same issue, and sided with Balderas, holding that workers can disclaim their individual PAGA claims and thereby avoid having to arbitrate their individual PAGA claims.

The Rodriguez court reached this holding by rejecting Leeper, on the grounds that the language from Labor Code section 2699(a) quoted above means only that a PAGA complaint should contain an individual PAGA claim. The court further suggested that the proper way for an employer to challenge a headless PAGA case was through a motion attacking the pleadings, not through a motion to compel arbitration.

The California Supreme Court grants review

On April 16, 2025, the California Supreme Court decided that enough was enough. On its own motion, the Court granted review of Leeper. The Court limited the issues to be briefed and argued to the following:

1. Does every PAGA action necessarily include both individual and non-individual PAGA claims, regardless of whether the complaint specifically alleges individual claims? 
2. Can a plaintiff choose to bring only a non-individual PAGA action?

Interestingly, the Court denied all requests for depublication of Leeper pending review. Instead, the Court noted that the court of appeal’s decision could be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion to choose between sides of any such conflict.

What are trial courts to do?

Not surprisingly, give the disagreement between the courts of appeal, trial courts have reached different conclusions regarding headless PAGA cases.

For example, in Los Angeles County Superior Court, five judges have considered this issue. Four agreed with Leeper. One disagreed. In Santa Barbara Superior Court and Fresno Superior Court, the judges have followed Balderas. And in Alameda County Superior Court, one judge followed Leeper, compelled the individual claims to arbitration, but did not enter a stay regarding the PAGA claims of the rest of the workers.

Therefore, it is somewhat of a roll of the dice as to whether to pursue headless PAGA claims. Trial courts will almost certainly continue to disagree as to whether to allow such claims until the California Supreme Court resolves the issue.

The lawyers at Hunter Pyle Law, PC, are experts at bringing claims under PAGA. If you have a question about your rights at work, please feel free to make use of our free and confidential intake process. We can be reached at inquire@hunterpylelaw.com.