Duane Morris Takeaway: On July 7, 2025, in CRST Expedited, Inc. et al. v. The Superior Court of Fresno County, Case No. F088569 Cal. App. July 7, 2025), the California Court of Appeal for the Sixth Appellate District denied an employer's petition for writ of mandate of a trial court's decision that a worker's dismissal of his individual PAGA claims did not bar him from pursuing claims on behalf of other aggrieved employees only. This tactic – known as a headless PAGA action – is the latest innovation of the plaintiffs' class action bar and another challenge employers face in operating in the Golden Bear State.
Background
Defendant CRST Expedited, Inc. ("CRST Expedited") employed Plaintiff Espiridion Sanchez ("Plaintiff") as a tire maintenance technician from 2017 until 2018. Id. at 5. On March 22, 2019, Plaintiff provided written notice to the Labor & Workforce Development Agency ("LWDA") and CRST Expedited asserting claims under the California Private Attorneys General Act ("PAGA") on behalf of all current and former employees of CRST Expedited and cited nine Labor Code violations. Id. at 6. After receiving no response from the LWDA, Plaintiff filed a PAGA action on behalf of himself and other aggrieved employees against CREST Expedited. Id.
In 2023, the trial court granted CRST Expedited's motion to compel arbitration of Plaintiff's individual PAGA claims and dismissal of the non-individual claims in light of the U.S. Supreme Court's ruling in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2023) ("Viking River"). Id. at 8. In Viking River, the U.S. Supreme Court held that once an employee's individual PAGA claims are compelled to arbitration, the employee lacks standing to represent other aggrieved employees as to their PAGA claims. Id.
The ruling in Viking River was short lived once the California Supreme Court issued its decision in Adolph v. Uber Technologies, Inc., 14 Cal.5th 1104, 1114, 310 Cal.Rptr.3d 668, 532 P.3d 682 (2003), which held that "an order compelling arbitration of the individual [PAGA] claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA." Id.
Plaintiff sought reconsideration on that basis, and the trial court reinstated the nonindividual PAGA claims. Id. at 9.
In 2024, the trial court granted Plaintiff's unopposed motion to dismiss his individual PAGA claims. Id. at 9. In response, CRST Expedited sought dismissal of Plaintiff's nonindividual PAGA claims on the grounds that Plaintiff no longer had standing because he dismissed his individual PAGA claims. Id. at 9-10. The trial court disagreed. Id.
The California Court Of Appeal's Ruling
The California Court of Appeal addressed whether the PAGA statute allows an aggrieved employee to recover civil penalties for violations of the Labor Code suffered only by other employees.
To do so, the Court of Appeal conducted a thorough analysis of the statutory interpretation of the PAGA statute, ultimately finding that the PAGA statute is ambiguous. Id. at 39. Faced with an ambiguous statute, the Court of Appeal concluded it "must select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute." Id.
The Court of Appeal began its analysis by examining the legislative intent behind the use of the terms "and" and "or" in a 2003 amendment to the PAGA statute. Id. at 40. The 2003 amendment revised the statute to say: "An aggrieved employee may recover the civil penalty described in subdivision (b) in a civil action filed on behalf of himself or herself and others." Id. at 40. (emphasis added). However, a review of the legislative history revealed that the revised language merely corrected a drafting error. Id. The Court of Appeal also held that it was unlikely that the original drafters could have anticipated a bifurcation of the individual and nonindividual PAGA claims — as recognized in such as Viking River — when amending the statute. Id. at 41.
Finding that the analysis of legislative intent was inconclusive, the Court of Appeal analyzed the purpose of the PAGA statute. Id. It opined that the primary objective of the PAGA statute is to maximize enforcement of labor laws and deter employer violations. Id. at 42. As such, requiring arbitration of individual claims before pursuing non-individual claims would undermine those enforcement efforts. Id.
To achieve effective enforcement, the Court of Appeal held that the PAGA statute should be interpreted to allow "PAGA plaintiffs and their counsel the flexibility to choose among bringing a PAGA action that seeks to recover of civil penalties on (1) the LWDA's individual PAGA claims, (2) the LWDA's nonindividual PAGA claims, or (3) both." Id. at 47. The Court of Appeal emphasized that this interpretation does not eliminate or weaken the PAGA standing requirements, as a plaintiff must still be an aggrieved employee to bring a headless PAGA action. Id. at 47-48.
In sum, the Court of Appeal reaffirmed that a broad construction of the statute permits an aggrieved employee to pursue a headless PAGA action.
Implications For Companies
The CRST Expedited decision confirms that aggrieved employees can pursue representative PAGA actions on behalf of other aggrieved employees even if their individual claims are subject to arbitration or dismissed.
The ruling underscores the importance for employers to reassess their arbitration strategies and compliance practices, as the enforcement of labor laws through the PAGA remains robust despite contractual arbitration clauses.
It remains to be seen whether the landscape of the headless PAGA action will be turned on its head in light of the California Supreme Court's decision to review Leeper v. Shipt, Inc.,107 Cal.App.5th 1001, 328 Cal.Rptr.3d 632 (2024), which effectively eliminated the headless PAGA action. We will continue to follow the developments in PAGA and keep our blog readers informed.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
