PAGA

In this episode, Jen summarizes the Private Attorneys General Act and its role in wage-hour claims.

By: PAGA Tactic Denied by Cal. Court of Appeal: Plaintiff Who Voluntarily Dismissed PAGA Claims Could Not Invoke Death Knell Doctrine To Appeal Denial of Class Certification

Last week, in Chavez v. Hi-Grade Materials Co., the California Court of Appeal took up a novel jurisdictional question: Can a putative class action plaintiff unilaterally ring the death knell for the entire class and create appellate jurisdiction by voluntarily dismissing his PAGA claims? The Court concluded that the answer is no. The Court also recognized the voluntary dismissal as a tactic to create an end-run around the rules against interlocutory appeals, and dismissed the employee’s appeal.

Angel Chavez Reyes filed a class action complaint asserting 12 causes of action for violations of the California Labor Code and California Business and Professions Code. Chavez also sought penalties under the Private Attorneys General Act (“PAGA”). The trial court denied class certification due to issues of numerosity, manageability, and typicality. The trial court’s order noted that Chavez’s PAGA claims were not subject to class certification and therefore were not subject to the order.

In September 2023, Chavez appealed the order denying class certification under the death knell doctrine. The doctrine allows for the immediate appeal of an order denying class certification if the order effectively terminates the action for all class members other than the individual plaintiff, rendering further proceedings impractical and unlikely. In November 2024, while the appeal was pending, Chavez voluntarily dismissed his PAGA claims without prejudice.

The California Court of Appeal affirmed the trial court’s order.

Death Knell Doctrine Inapplicable Where PAGA Claims Remain Pending

The death knell doctrine does not apply when representative PAGA claims remain pending after the trial court has denied class certification. A plaintiff seeking PAGA penalties does so as a representative of the state, so there is still a possibility of group recovery despite the termination of the class claims. Here, nothing in the trial court’s order undermined the viability of Chavez’s PAGA claims. Chavez also did not claim that the PAGA claims were derivative of or dependent upon the class claims. With viable PAGA claims intact, the death knell doctrine did not apply.

The Court addressed the “wrinkle” that, despite the remaining PAGA claims, the denial of class certification is the death knell for putative class members who were employed during the class period (four years before the filing of the Complaint), but not within the one-year PAGA statute of limitations. Nonetheless, the Court concluded that the death knell doctrine still did not apply because there was significant overlap between the putative class and the group entitled to PAGA penalties, such that a substantial portion of the putative class could still obtain relief.

Voluntary Dismissal of PAGA Claims Did Not Create Appellate Jurisdiction

The Court held that Chavez’s voluntary dismissal of his PAGA claims—over a year after the denial of class certification—did not retroactively make the trial court’s order appealable. Chavez also dismissed the claims without prejudice which, by definition, is not a final judgment. The Court sided with the employer’s argument that Chavez’s voluntary dismissal was an improper attempt to circumvent the death knell doctrine. “[A]llowing a putative class action plaintiff to sound the death knell of their own class or representative claims would undermine the finality principle underlying the one final judgment rule, ‘invite protracted litigation and piecemeal appeals,’ and condone the use of the ‘voluntary dismissal-tactic’ as an end-run around the rules against interlocutory appeals.” The Court also observed that the voluntary dismissal tactic would encourage plaintiffs to abandon PAGA claims in an effort to manufacture appellate jurisdiction.

The Chavez decision is a positive contribution to the growing judicial wariness of procedural gamesmanship in PAGA lawsuits. The Court also confirmed the death knell doctrine’s narrow parameters, even where some putative class members may not recover from the remaining PAGA claims.

If you have any questions about PAGA litigation strategy, please contact your favorite CDF attorney. We will continue to monitor the evolving PAGA legal landscape. To stay up to date, be sure to subscribe to CDF’s California Labor & Employment Law blog.

In 2004, California enacted the Private Attorneys General Act (PAGA), which allows employees to sue their employer on behalf of the state for certain Labor Code violations against all aggrieved employees. Prior to the much-needed 2024

By: PAGA Update: Cal. Court of Appeal Confirms PAGA Plaintiffs Must Have a Timely Individual PAGA Claim

In a decision with important implications for many pending Private Attorneys General Act (PAGA) lawsuits, a California Court of Appeal upheld the dismissal of a representative PAGA action as untimely because the plaintiff did not submit a PAGA notice letter within one year of their last day of employment. The court’s decision in Williams v. Alacrity Solutions Group, LLC, which was published on April 22, 2025, holds that PAGA plaintiffs “must, among other things, seek to recover civil penalties on [their] own behalf … and must establish that [their] so-called ‘individual claim’ is timely as to at least one Labor Code violation.”

While this decision is consistent with the presently operative PAGA provisions, effective July 1, 2024, the Williams v. Alacrity case is governed by the PAGA statutes in effect before the amendments. Nonetheless, the appellate court concluded that the amendments simply made “the already-existing timeliness requirement explicit within PAGA itself.” 

Notably, the appellate court adopted the reasoning in Leeper v. Shipt, Inc., which, as discussed in our recent blog post, was recently taken under review by the Cal. Supreme Court. Such reliance is unsurprising because both decisions, Williams v. Alacrity and Leeper v. Shipt, were decided by the California Court of Appeal for the Second Appellate District.

The Leeper v. Shipt decision held that a PAGA action necessarily includes both individual PAGA claims based on violations the plaintiff experienced and non-individual PAGA claims based on violations other allegedly  aggrieved employees experienced. Under Leeper, a PAGA plaintiff must seek to recover civil penalties on their own behalf; the so-called “headless” PAGA claims are not permitted. The Williams v. Alacrity decision is thus a logical extension of the Leeper v. Shipt decision. 

Employers can rely on both decisions while the Leeper v. Shipt case is under review. The decisions will be particularly impactful on PAGA actions in the Counties of Los Angeles, Ventura, Santa Barbara, and San Luis Obispo, which fall under California’s Second Appellate District. 

Employers litigating PAGA actions in other jurisdictions should anticipate the argument from PAGA plaintiffs that there is a split of authority between Williams v. Alacrity and Leeper v. Shipt, on the one hand, and Johnson v. Maxim Healthcare Services, Inc., Balderas v. Fresh Start Harvesting, Inc., and Rodriguez v. Packers Sanitation Services Ltd., LLC, on the other hand. That is especially true for employers litigating PAGA actions in California’s Fourth Appellate District, covering the Counties of San Diego, Orange and others, as that appellate court published the decisions in both Rodriguez v. Packers and Johnson v. Maxim Healthcare. 

Our prior posts on these cases generally explain how employers can distinguish them and demonstrate that there is no real split of authority. For example:

• “[T]he holding in Johnson should be constrained to its facts … specifically, the fact that Johnson was a current employee asserting a continuing violation theory,” and thus it does not stand for the proposition that PAGA plaintiff may be “allowed to maintain a purely representative PAGA claim on behalf of others.” (See prior post here.)
   
• “Balderas merely determined whether allegations were sufficient to overcome a motion to strike a complaint, and Balderas’ complaint alleged that she sought to recover civil penalties under PAGA ‘for all aggrieved employees, including herself and other aggrieved employees.’ Balderas’ PAGA action was not purely representative, limited to ‘non-individual PAGA claims’ brought solely on behalf of other aggrieved employees, and excluding claims on behalf of Balderas herself.” (See prior post here.)
   
• “The Rodriguez decision does not create a split of authority on the issue of whether every PAGA action includes an individual PAGA claim; the appellate court expressly declined to consider that issue. Instead, the Rodriguez decision concludes that trial courts resolving motions to compel arbitration must adopt the PAGA plaintiff’s representations about the scope of their PAGA claim.” (See prior post here.)

Overall, the Williams v. Alacrity decision is another positive development for California employers forced to defend predatory PAGA lawsuits. As the court observed, its decision is consistent with the Legislature’s recent “observation that PAGA’s goal of ‘bolster[ing] labor law enforcement’ had been ‘manipulated over its 20-year history by certain trial attorneys as a money-making scheme,’” and that the intent behind PAGA would be “thwarted” by allowing private individuals to sue under PAGA “10, 20 or 30 years after leaving the defendant-employer’s employ.” The decision adds to the growing judicial consensus preserving the statute’s intended role as a vehicle for timely and meaningful labor enforcement—not a vehicle for speculative and opportunistic litigation.

If you have any questions about this blog post or PAGA litigation strategy, please contact the author, Corey Cabral, Chair of CDF’s PAGA Litigation Practice Group, or your favorite CDF attorney. We will continue to monitor the evolving PAGA legal landscape, so if you haven’t already, subscribe to CDF’s California Labor & Employment Law Blog to ensure you don’t miss out on future posts. 

By: Cal. Supreme Court To Decide Headless PAGA Action Issue

By: Cal. Supreme Court To Decide Headless PAGA Action Issue

We have previously discussed the evolving Private Attorneys General Act (PAGA) case law regarding the issue of so-called ‘headless’ PAGA cases – where a PAGA plaintiff attempts to avoid arbitration by claiming to assert a purely representative PAGA claim on behalf of other allegedly aggrieved employees (read our prior coverage on this topic here and here).

In Leeper v. Shipt, Inc., the Second Appellate District confirmed that every PAGA claim includes an individual and representative claim and, therefore, a plaintiff cannot abandon their individual claim to avoid arbitration. 

A plaintiff’s side law firm recently made a request to the Cal. Supreme Court to de-publish the Leeper decision. Last week, the Cal. Supreme Court denied the request to de-publish the Leeper decision and instead ordered review of the decision even though neither party filed an appeal. The Court ordered a review to resolve a split of authority between appellate courts.

In ordering review, the Court instructed the parties to brief and argue the following two legal issues:

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? 

We will continue to track this case and other PAGA developments. To stay up to date, be sure to subscribe to CDF’s California Labor & Employment Law blog.

By: PAGA Update: Key Lessons for Defending and Settling PAGA Cases

By: PAGA Update: Key Lessons for Defending and Settling PAGA Cases

Two recent Private Attorney General Act (PAGA) cases underscore the importance of effectively using procedural motions in defending such cases.

1.  Rodriguez v. Packers Sanitation Services LTD., LLC

The first case, Rodriguez v. Packers Sanitation Services LTD., LLC, involved the question of arbitrability in a so-called “headless” PAGA action. In a headless PAGA action, the plaintiff seeks to avoid arbitration by filing a complaint that asserts a PAGA claim solely on behalf of others while the PAGA plaintiff disclaims any individual claim for relief that would be subject to an arbitration.

In Rodriguez the California’s Fourth District Court of Appeal held that, in such cases, trial courts cannot order arbitration of the unasserted individual PAGA claims even if it is true that an individual PAGA claim is a necessary component of every PAGA action.

This decision is odds with the Second District Court of Appeal’s recently published decision in Leeper v. Shipt. In Leeper the appellate court held that trial courts may compel arbitration of unasserted individual PAGA claims because the court concluded that every PAGA action necessarily includes an individual PAGA claim. (For further analysis on Leeper see our prior blog post.)

The Rodriguez decision does not create a split of authority on the issue of whether every PAGA action includes an individual PAGA claim; the appellate court expressly declined to consider that issue. Instead, the Rodriguez decision concludes that trial courts resolving motions to compel arbitration must adopt the PAGA plaintiff’s representations about the scope of their PAGA claim.

However, the Rodriguez case will not necessarily lead to bad outcomes for California employers. In Rodriguez, the plaintiff represented to the appellate court that “he has forgone individual PAGA relief and [they] accepted that representation.” “As a result,” the appellate court found that he “will be precluded from taking a contrary position in the future” and the “conclusion that the complaint does not assert individual PAGA claims will be the law of the case.” In other words, the Rodriguez complaint will next be subject to a motion to dismiss for lack of standing.

Although the Rodriguez case will not necessarily lead to bad outcomes for California employers, it incorrectly places form over substance and will create waste. The appellate court should have given no credence to the plaintiff’s assertion that he has forgone relief under PAGA. It is well established that aggrieved employees cannot opt out of a PAGA settlement or judgment, and that a portion of any civil penalty award must be distributed to each aggrieved employee, including the plaintiff. Thus, PAGA does not allow aggrieved employees to forgo their share of a civil penalty award.

The Rodriguez decision also fails to recognize that, under Viking River v. Moriana and Adolph v. Uber, the arbitrable portion of a PAGA action is the threshold issue of whether the plaintiff is an aggrieved employee, not the ultimate issue of whether the court should award a civil penalty. Accordingly, where a PAGA plaintiff signed an agreement requiring arbitration of any claim, dispute, or controversy concerning alleged Labor Code violations, trial courts should order arbitration so long as the plaintiff claims that they are an aggrieved employee under PAGA—that they suffered a Labor Code violation. It should not matter that the plaintiff may claim to have “purely representative” PAGA claims and to have disavowed any “individual relief.”

The Rodriguez decision indicates that it would be prudent for employers to seek dismissal of headless PAGA actions as deficiently pled. However, that may be a trap for the unwary. If an employer seeks dismissal based on representations in the complaint that the plaintiff has no individual PAGA claim and is not seeking individual relief, the plaintiff will oppose the motion by relying on allegations that they are an aggrieved employee, which is sufficient to establish standing under PAGA. The plaintiff will win on that argument, and then claim the employer waived their right to enforce the arbitration agreement by litigating that dispute. Do not fall into this trap. Instead, consider filing a motion for dismissal of the headless PAGA action and, in the alternative, to compel arbitration.

2.  Moniz v. Adecco USA, Inc.

The second case, Moniz v. Adecco USA, Inc., involved a PAGA settlement between one employee (Moniz) and the employer. A second employee, Correa, who had filed a separate PAGA action with overlapping claims challenged the settlement leading to a series of appeals. Ultimately, the trial court approved the settlement, over Correa’s objections, denied Correa’s request for a service award and largely denied her request for an award of attorney’s fees. Unsurprisingly, Correa again appealed. Following the California Supreme Court’s decision in Turrieta v. Lyft Inc. the Moniz court concluded that Correa did not have standing to intervene, move to vacate, or appeal the judgment and settlement in Moniz’s separate PAGA action.

The Moniz court also rejected Correa’s arguments that she had personal interest sufficient to provide her standing to intervene and object to Moniz’s settlement. The “personal interests” asserted by Correa included: (1) bringing a PAGA claim, (2) collecting her share of 25% of recovered penalties, (3) collecting attorneys’ fees and costs, (4) a prevailing party determination that would protect her from any claim to pay the employer’s costs, and (5) collecting a service award. The Moniz court concluded that these “personal interests” arise from PAGA and are mostly derivative of her status as a representative of the state as a PAGA plaintiff and therefore were not sufficient to grant her standing considering the Supreme Court’s reasoning in Turrieta.

In light of Moniz, employers should strenuously oppose attempts by PAGA plaintiffs and their counsel to intervene, object, or oppose settlements in other PAGA cases with overlapping claims made with different employees.

These cases provide valuable insights for employers on the complexities of PAGA actions and the importance of staying informed about legal developments in this area to effectively manage compliance and litigation strategies. CDF will continue to monitor and report on such developments.

“PAGA is a statute that’s not employer-friendly, but one of the benefits of this last year is that we had some amendments come through that did, for lack of a better phrase, throw employers a little bit of a bone when it came to dealing with PAGA cases. One benefit is an expanded ability to cure labor code violations. The other involves arbitration and our ability to fight these claims and not just have to wait to trial to do it.”

The Golden State had lost some of its luster among California employers due to its Private Attorneys General Act (PAGA), with some calling it “one of the least just and fair laws that employers are dealing with today in California.” Yet two recent PAGA amendments may help restore the state’s business shine in 2025 and beyond.

By: Last Ride For “Headless” PAGA Actions

By: Last Ride For “Headless” PAGA Actions

Yesterday, the California Court of Appeal in Leeper v. Shipt, Inc., held that because every PAGA action necessarily includes an “individual PAGA claim” a PAGA plaintiff cannot avoid arbitration by asserting purely representative PAGA claim on behalf of other allegedly aggrieved employees (i.e., a “headless” PAGA action). Accordingly, the Court of Appeal concluded that the trial court must order Leeper’s “individual PAGA claim to arbitration” and must stay the litigation in accordance with California Code of Civil Procedure section 1281.4. We previously posted about California Employers’ Fight Against “Headless” PAGA  Actions like the one at issue in Leeper. The Leeper decision should put an end to it. 

The underlying lawsuit involved a single PAGA cause of action, which Leeper purported to bring “on a representative, non-individual basis” and through which she sought to recover “non-individual civil penalties.” In her complaint, Leeper addressed her arbitration agreement by asserting, “Because [Leeper] alleges only non-individual PAGA claims on a representative basis, Shipt cannot compel them to arbitrat[ion].” Like many (if not all) other plaintiffs seeking to litigate a “headless” PAGA action, Leeper relied on the Court of Appeal’s decision in Balderas v. Fresh Start to support her argument PAGA plaintiffs may disclaim their “individual PAGA claim,” avoid arbitration, and proceed with litigating a purely “representative PAGA claim” in court. 

In Leeper, the Court of Appeal explained that the unambiguous text of the PAGA statute authorizes only claims for civil penalties brought by the employee plaintiff “and other current or former employees.” Further, the court explained that Balderas does not support the position that a plaintiff may properly maintain a purely representative PAGA claim because Balderas “did not have occasion to discuss, did not discuss, and its holding does not address, whether a plaintiff may carve out an individual PAGA claim from a PAGA action.” 

The distinction between Leeper and Balderas is critical, as both decisions were published by the California Court of Appeal, Second Appellate District. Undoubtedly, PAGA plaintiffs will argue Leeper is not binding because it creates a “split of authority” with Balderas. But trial courts will not likely take the bait. 

Leeper specifically addresses and rejects the argument that PAGA plaintiffs may properly disclaim the arbitrable, individual components of their PAGA action to avoid arbitration. Balderas held that trial courts may not dismiss a PAGA lawsuit brought by an allegedly “aggrieved employee” who does not specifically assert an individual claim. Both decisions can and do coexist within the post-Viking River framework of PAGA jurisprudence. Generally, an “aggrieved employee” has standing to maintain a PAGA action even if it does not specifically assert an individual claim (Balderas), but that PAGA action nonetheless includes an “individual PAGA claim” that may be subject to an arbitration agreement (Leeper). Because there is no actual split of authority on the issue, the Leeper decision should bind all California trial courts.

If you have any questions about this blog post, please contact the authors Corey Cabral and Sander van der Heide or your favorite CDF attorney. We will continue to monitor the evolving PAGA legal landscape, so if you haven’t already, subscribe to CDF’s California Labor & Employment Law Blog to ensure you don’t miss out on future posts. 

By: California Court of Appeal Supports Employers’ Fight Against “Headless” PAGA Actions

In 2022, the U.S. Supreme Court published its decision in Viking River Cruises v. Moriana (Viking River), which was hailed as a “Big Win for California Employers.” The decision allowed for partial enforcement of arbitration agreements in actions brought under California’s Private Attorneys General Act (PAGA). The celebration of the “Big Win” was short-lived as the fight over the enforceability of arbitration agreements in PAGA actions continued immediately after Viking River was decided.

Recently, PAGA plaintiffs began implementing a new anti-arbitration strategy wherein they attempted to bring a representative PAGA action that purportedly excluded the arbitrable portions of a PAGA action. Specifically, the PAGA plaintiffs assert that their representative PAGA action is solely based on alleged Labor Code violations against other, non-party employees. The PAGA plaintiff asserts that their PAGA action includes no arbitrable individual claim and that they seek no individual relief. Given the purported absence of claims by the plaintiff, these actions have been referred to as “headless” PAGA actions. And plaintiffs argue that these “headless” PAGA actions are immune from arbitration. 

Unfortunately, some trial courts have allowed PAGA plaintiffs to avoid arbitration and maintain “headless” PAGA actions in court. And the trend is gaining momentum. Bloomberg Law recently published an article about this anti-arbitration litigation tactic, titled “California Workers Try to Avoid Arbitration With ‘Headless PAGA,” [subscription required] explaining that over one-third of the PAGA actions filed in Los Angeles County over the past six months have been “headless” PAGA actions.

Plaintiffs purporting to have a “headless” PAGA action rely heavily on the Second District Court of Appeal decision in Balderas v. Fresh Start Harvesting, Inc. (Balderas). In Balderas, the plaintiff’s complaint asserted that she “is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees.” The appellate court held “that an employee who does not bring an individual claim against her employer may nevertheless bring a PAGA action for herself and other employees of the company.”

If the Balderas decision stopped there, it would have been rather ordinary. One would reasonably construe the holding as a recitation of the long-held rule that an aggrieved employee has standing to maintain a PAGA cause of action even if they have no valid individual Labor Code cause of action. 

However, in dicta, Balderas states that the legislature extended “broad standing to aggrieved employees who do not depend on the viability or strength of a plaintiff’s individual PAGA claim. The inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action.” The “headless” PAGA actions arose from these statements, which support the proposition that a plaintiff can maintain a representative PAGA action (i.e., a cause of action for civil penalties under PAGA) without asserting an arbitrable individual PAGA claim. 

Fortunately, though, the same Court of Appeal that decided Balderas recently published a decision with a holding that is entirely inconsistent with the dicta in Balderas. 

In Rodriguez v. Lawrence Equipment, Inc. (Rodriguez), the Second District Court of Appeal held that an arbitrator’s final adjudication of non-PAGA Labor Code claims has a preclusive effect on a related PAGA action. The plaintiff in the case, Rodriguez, unsuccessfully arbitrated his individual Labor Code causes of action, failing to establish that he suffered any Labor Code violations. After arbitration, Rodriguez sought to prosecute his representative PAGA action in court but the trial court dismissed Rodriguez’s PAGA action for lack of standing. The appellate court affirmed, concluding that “Rodriguez is precluded from relitigating the Labor Code violations in an attempt to establish he is an aggrieved employee,” and he “thus lacks standing to pursue the PAGA cause of action.”

The holding in Rodriguez is entirely inconsistent with the Balderas dicta that supports “headless” PAGA claims. Under Rodriguez, “the inability for an employee to pursue an individual PAGA claim” does eliminate that employee’s standing to maintain a PAGA action. Under Rodriguez, standing under PAGA does “depend on the viability or strength of a plaintiff’s individual PAGA claim.” 

Rodriguez will not stop PAGA plaintiffs from relying on Balderas to justify their “headless” PAGA actions. But their reliance is on shaky ground. The Rodriguez decision should help employers fight back against “headless” PAGA actions and successfully enforce their arbitration agreements under Viking River. It is also important that employers distinguish Balderas to ensure its holding is appropriately limited. Employers should also ensure that they use “PAGA claim” and “PAGA action” precisely and consistent with Viking River. And, further, they should be vigilant of how PAGA plaintiffs rely on pre-Viking River PAGA decisions to support their arguments to oppose arbitration pursuant to Viking River. Some of the focal points are set forth below.

• Balderas merely determined whether allegations were sufficient to overcome a motion to strike a complaint, and Balderas’ complaint alleged that she sought to recover civil penalties under PAGA “for all aggrieved employees, including herself and other aggrieved employees.” Balderas’ PAGA action was not purely representative, limited to “non-individual PAGA claims” brought solely on behalf of other aggrieved employees, and excluding claims on behalf of Balderas herself.
   
• Viking River “use[d] ‘individual PAGA claim’ to refer to claims based on [Labor C]ode violations suffered by the plaintiff.” In Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, the California Supreme Court “use[d] the terms ‘individual’ and ‘non-individual’ claims in accordance with the high court’s usage in Viking River.” Under both decisions, “individual PAGA claims” are subject to arbitration. A plaintiff’s claim that they are an “aggrieved employee” under PAGA is a claim that the plaintiff suffered Labor Code violations. Thus, all PAGA plaintiffs claiming to have standing as an “aggrieved employee” are asserting an “individual PAGA claim” that is arbitrable under Viking River.
   
• Before Viking River was decided, the California Supreme Court decided Kim v. Reins Int’l California, Inc. (2022) 9 Cal.5th 73, explaining that “[t]here is no individual component to a PAGA action” and thus California courts routinely “reject[] efforts to split PAGA claims into individual and representative components” through an arbitration agreement, or otherwise. Viking River held that “the FAA preempts the [California] rule [that] precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate.” No legal authority suggests that a PAGA plaintiff who agreed to arbitrate their individual PAGA claims may avoid such arbitration by filing a “headless” PAGA action. Absent the agreement to arbitrate under the FAA, PAGA actions may not be split in that manner. 
   
• PAGA plaintiffs cannot avoid arbitration by declining to seek any civil penalty for themselves because PAGA authorizes “a civil penalty to … be recovered through a civil action brought by an aggrieved employee on behalf of the employee and other current or former employees,” and PAGA requires that the court distribute the civil penalty “to the aggrieved employees.” PAGA plaintiffs have no say in the matter. Moreover, California law requires arbitration of “any question arising between parties to an agreement whether the question is one of law or of fact or both.” A PAGA plaintiff’s claim that they are an aggrieved employee is a question of fact which, under Viking River and Adolph, must be bifurcated and compelled to arbitration. That is so even if the PAGA plaintiff could feasibly disclaim any individual relief.

The fate of “headless” PAGA actions will likely be determined next year, as it is expected that California appellate courts will begin to decide PAGA cases that are currently on appeal following the denial of motions to compel arbitration of “individual PAGA claims.” 

For example, Garcia v. Omni Hotels Management Corporation (Garcia), Case No. D084151, arose from a trial court’s order denying an employer’s motion to compel arbitration in a PAGA action because, the trial court found, “there is nothing to order to arbitration if Plaintiff is not seeking any [civil penalties] based on violations that occurred as to them.” That appeal is fully briefed before the Fourth District Court of Appeal. 

By: LWDA Publishes PAGA Frequently Asked Questions

The California Labor & Workforce Development Agency (“LWDA”) recently published Frequently Asked Questions pertaining to the Private Attorneys General Act (“PAGA”) and the recent amendments that impact PAGA claims after June 19, 2024.

Previously, CDF provided guidance on the PAGA reforms introduced by Assembly Bill (AB) 2288 and Senate Bill (SB) 92.

The FAQs address one of the most significant reforms, the stricter standing requirement that a PAGA plaintiff represented by private counsel is limited to seeking PAGA penalties for alleged labor code violations the employee personally experienced. The stricter standing requirement does not apply to plaintiffs represented by non-profit legal organizations, who, like under prior law, may seek PAGA penalties based on alleged violations they did not personally experience, as long as the employee claims to have experienced at least one labor code violation.

The FAQs specify that for claims based on post-June 19, 2024 PAGA notices, 65 percent of recovered penalties go to the State and 35 percent go to the aggrieved employees (and Courts may award injunctive relief). And, as before, for PAGA notices pre-June 19, 2024, recovered penalties will continue to be distributed as 75 percent to the State and 25 percent to the aggrieved employees.

The FAQs also address limitations on recoverable penalties. With some exceptions, the maximum civil penalty will be capped at 15 percent of the maximum penalty if the employer took all reasonable steps to comply with the law prior to receiving the PAGA notice, or at 30 percent if the employer takes all reasonable steps to achieve compliance within 60 days of the PAGA notice. It remains to be seen how the courts will define the “all reasonable steps” standard.

The FAQs specify that employers may take new steps to cure certain violations. Within 33 days of the PAGA notice, the employer must give written notice to the aggrieved employee and to the LWDA that the alleged violations have been cured, with a description of the actions taken, including specific requirements for alleged wage statement violations and alleged violations involving unpaid wages. Effective October 1, 2024, employers with fewer than 100 employees may first, within 33 days of the PAGA notice, submit a cure proposal to the LWDA and then work with the LWDA to ensure the violations have been cured.

Also, employers of any size may request a stay of court proceedings and an early evaluation conference with a neutral evaluator, which is intended to facilitate early evaluation and resolution of the lawsuit. However, it is not clear how this will be carried out.

CDF will provide updates on further clarification, court decisions or additional guidance released by the LWDA. If you have any questions about this blog post, please contact your favorite CDF attorney.