A recent decision from California’s Fifth District Court of Appeal has deepened the divide among state courts on a critical issue under the Private Attorneys General Act (PAGA): whether a plaintiff may pursue representative claims for Labor Code violations they did not personally experience.  In CRST Expedited, Inc. v. Superior Court, the court concluded that such “headless” PAGA actions are permissible under the statute.  This holding appears to directly contradict the Second District Court of Appeal’s opinion in Leeper v. Shipt, Inc., which required a plaintiff to plead at least one individual Labor Code claim as a prerequisite to pursuing representative claims on behalf of others.  The California Supreme Court has granted review in Leeper, and its forthcoming decision will likely resolve this conflict.

In CRST, the plaintiff brought a PAGA action against his former employer, alleging numerous wage-and-hour violations.  Following the U.S. Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, the trial court compelled the plaintiff’s individual PAGA claims to arbitration.  However, the arbitration resulted in dismissal of those claims, leaving only the non-individual, representative PAGA claims – based solely on alleged violations suffered by other employees – to proceed in civil court.  The employer moved to dismiss those remaining claims, arguing the plaintiff no longer met the definition of an “aggrieved employee” under PAGA because he had no viable individual claims.

The Fifth District rejected that argument, focusing closely on the statutory language of Labor Code section 2699(c), which defines an “aggrieved employee” as “any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”  The court acknowledged that the conjunction “and” could be interpreted as requiring both employment by the defendant and personal experience of at least one alleged violation.  However, the court reasoned that “and” can sometimes function disjunctively – akin to “or” – depending on statutory context and purpose.  Finding the statute ambiguous, the court turned to legislative intent and emphasized PAGA’s remedial and enforcement-driven goals.  In that light, the court concluded that a representative PAGA plaintiff need not have suffered each violation they seek to enforce on behalf of others.  Accordingly, the plaintiff qualified as an “aggrieved employee” and was permitted to proceed solely on behalf of other allegedly aggrieved employees, despite dismissal of his individual claims.

Importantly, the court expressly limited its holding to PAGA claims filed before July 1, 2024, when recent reforms to the PAGA statute went into effect.  As a result, the CRST ruling may not apply to PAGA actions initiated following the 2024 amendments, potentially narrowing its reach to pending pre-2024 cases.

The apparent conflict between the holdings in CRST and Leeper will remain until the California Supreme Court issues a final decision in Leeper.  Further, because CRST’s effect appears limited to claims filed before July 1, 2024, it remains uncertain whether “headless” representative claims will survive the PAGA statutory reforms.  In the meantime, compliance with wage-and-hour laws remains essential to mitigate PAGA risk, and careful structuring of arbitration agreements and litigation strategies remains critical.