California PAGA Cases All Have Individual Claims, Justices Say

Every action to enforce the state labor code under California’s Private Attorneys General Act inherently includes an individual claim, a state appeals panel ruled on Monday.

Despite a worker saying her lawsuit against a Target subsidiary contained only claims on behalf of an employee group, justices directed part of her case into arbitration.

The published opinion pointed to the limits of a recent ruling that worker-side attorneys have cited to bring “headless” claims in California court, to avoid the delays and possible issue preclusion that come with arbitration.

“Based on the unambiguous, ordinary meaning of the relevant statutory language and the legislative history of that language,” all PAGA cases contain individual claims that may at times be subject to arbitration, Presiding Justice Frances Rothschild of California’s Court of Appeal, Second District wrote.

California’s PAGA law allows workers to act as deputies of the state government and file suits on behalf of themselves and other “aggrieved employees” to enforce California labor code.

Workers can bring PAGA claims on behalf of themselves “and other current or former employees.” The word “and” signals that the action has both individual and representative aspects, Rothschild said.

She noted that California lawmakers explicitly rejected the use of the word “or” when drafting the law.

The Monday ruling rejected a worker’s argument that a recent appellate opinion allows workers to avoid forced arbitration by bringing group-only PAGA claims.

That opinion, Balderas v. Fresh Start Harvesting, has emboldened workers to bring “headless” claims in California court, to avoid the delays and possible issue preclusion that come with arbitration.

But Balderas dealt with standing and the definition of an “aggrieved employee,” not whether such a carve-out is possible, Rothschild said.

Justice Gregory J. Weingart and Judge Kira Klatchko of California Superior Court, Riverside County joined the opinion.

The worker’s claims were returned to California Superior Court, Los Angeles County, with directions to arbitrate the worker’s individual claim and pause the representative part of the suit.

Lieff Cabraser Heimann & Bernstein represents Leeper. Seyfarth Shaw represents Shipt, Inc and Target Corp.

The case is Leeper v. Shipt, Inc., Cal. Ct. App., No. B339670, 12/30/24.