The California Court of Appeal, Second Appellate District, in Leeper v. Shipt, Inc., No. B339670, 2024 WL 5251619 (Cal. Ct. App. Dec. 30, 2024) (Leeper) issued a significant decision benefiting employers seeking to enforce arbitration agreements in cases involving the Private Attorneys General Act (PAGA). Ever since Balderas v. Fresh Start Harvesting, Inc., 101 Cal. App. 5th 533 (2024) (Balderas), a decision concerning PAGA standing by the same appellate district, plaintiffs began to artfully plead "headless" PAGA actions, wherein they allege PAGA claims purely on behalf of the state and other employees to avoid arbitration of their individual PAGA claim. However, in Leeper, the court confirmed that by statute, every PAGA claim includes both an individual and representative claim and, thus, a plaintiff cannot choose to abandon the individual component to avoid arbitration.
Balderas v. Fresh Start Harvesting: Rise of the Headless PAGA Actions
In Balderas, the plaintiff's complaint alleged that she was "not suing in her individual capacity" but "solely under the PAGA, on behalf of the State of California for all aggrieved employees." 101 Cal. App. 5th at 536. Balderas did not involve an arbitration agreement. Nonetheless, the trial court, on its own motion and in accordance with the US Supreme Court's analysis of PAGA standing in Viking River Cruises, Inc. v. Moriana, 596 US 639 (2022), struck the plaintiff's complaint for lack of standing because she had not specifically and separately alleged an individual claim under PAGA. Id. at 536-537.
The Second District reversed and held that the trial court improperly relied on the US Supreme Court's "observations about PAGA standing," which had since been corrected by the California Supreme Court in Adolph v. Uber Technologies, Inc., 14 Cal. 5th 1104 (2023) (Adolph). Id. at 538-539. The Second District further noted that, under Adolph, "the inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action." Id. at 537. Plaintiffs have since pointed to this language to support headless PAGA actions to circumvent arbitration of their individual PAGA claim.
Leeper v. Shipt
As with other headless PAGA actions, Plaintiff Christina Leeper (Plaintiff) filed a PAGA lawsuit against Shipt, Inc. (Shipt) in "a representative, non-individual" capacity only. Leeper, 2024 WL 5251619 at *2. Accordingly, when Shipt moved to compel Plaintiff's individual PAGA...
