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On November 3, 2026, the California Supreme Court heard oral argument in Leeper v. Shipt, Inc., a case addressing whether an employee can bring a purely representative, non-individual action under California’s Private Attorneys General Act (“PAGA”) without asserting an individual claim (i.e., a claim premised on Labor Code violations actually sustained by the plaintiff). PAGA practitioners often refer to such claims as “headless” PAGA actions, and the California courts of appeal are split on their permissibility.[1]
The Supreme Court’s decision in Leeper will determine whether employers can use arbitration agreements to force a plaintiff to arbitrate their individual PAGA claim first, or whether plaintiffs can evade arbitration entirely by forgoing an individual claim.
Background
The case arises from a lawsuit filed by Christina Leeper (“Leeper”) against Shipt, Inc. and Target Corporation (together, “Shipt”). Leeper alleged that Shipt improperly classified workers as independent contractors. She filed a non-individual PAGA lawsuit seeking civil penalties on behalf of other allegedly aggrieved employees but strategically chose not to assert an individual PAGA claim to prevent Shipt from compelling her individual claim to arbitration through enforcement of an agreement between the parties.
Shipt argued that every PAGA action necessarily includes an individual claim, which could be compelled to arbitration. The trial court disagreed, but the Court of Appeal unanimously reversed in an opinion published on December 30, 2024, concluding that every PAGA action necessarily includes an individual component that can be compelled to arbitration.
On April 16, 2025, the California Supreme Court granted review sua sponte to resolve two issues: (1) whether every PAGA action necessarily includes both individual and non-individual PAGA claims, regardless of whether the complaint specifically alleges individual claims; and (2) whether a plaintiff can choose to bring only a non-individual PAGA action.
The Oral Argument
PAGA practitioners have waited nearly a year-and-half for the oral argument in Leeper, as the decision should resolve the split in authority.
The argument centered on the tension between PAGA’s enforcement objectives and the parties’ competing interpretations of the statutory text, with the Federal Arbitration Act (“FAA”), the United States Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana, and the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc. casting a large shadow over the discussion.
In Viking River Cruises, the U.S. Supreme Court held that a plaintiff who is bound by an arbitration agreement covered by the FAA may be compelled to pursue their individual PAGA claims in arbitration, which results in the dismissal of their court action due to the loss of statutory standing. A year later, the California Supreme Court rejected that ruling in Adolph v. Uber Technologies, Inc. The Adolph court held that a plaintiff compelled to arbitrate individual claims retains standing to pursue non-individual claims in court.
Leeper’s arguments were threefold. First, PAGA’s requirement that an action be brought on behalf of the plaintiff “and” other aggrieved employees is ambiguous because it is reasonably susceptible to being read as “and/or” based on other indicia of the Legislature’s intent and that ambiguity must be resolved in favor of a construction permitting a non-individual action. Second, a PAGA plaintiff bringing only a non-individual claim satisfies the statute’s requirement that the claim be on behalf of herself and others because the plaintiff receives a pro rata share of the recovered civil penalties and can obtain injunctive relief, among other benefits. Third, nothing prohibits private litigants from prosecuting their claims in a way designed to avoid arbitration and federal law is clear that, as the “master” of their complaint, a plaintiff can determine which substantive claims to bring for strategic purposes, such as escaping federal jurisdiction.
Shipt countered that the statutory language is unambiguous, requires an individual claim as well as a non-individual claim, and does not permit a plaintiff to avoid arbitration simply by disclaiming individualized remedies. Shipt further argued that PAGA standing is tied to the plaintiff having an individual PAGA claim and that the standing requirement is meant to ensure that the PAGA plaintiff has “skin in the game,” a phrase the justices echoed repeatedly during the argument.
The questioning suggested that several justices were skeptical of Leeper’s position. Justice Liu – who authored the Court’s opinion in Adolph – repeatedly questioned whether the statutory language governing penalties for each aggrieved employee necessarily includes the named plaintiff, whether it is actually possible to disentangle an individual claim from a non-individual claim, and what it means for a PAGA plaintiff to have “skin in the game.” However, Justice Liu also recognized that PAGA’s purpose is to maximize the enforcement of labor laws and allowing employees to avoid the hurdles created by arbitration through “headless” PAGA claims would lead to the more expedient recovery of non-individual penalties.
Meanwhile, Justice Kruger expressed difficulty reconciling Leeper’s position with the statutory requirement that a plaintiff allege violations sufficient to establish standing. And Justice Groban questioned whether permitting a plaintiff to disclaim individualized relief is consistent with the Legislature’s intent when enacting PAGA and raised concerns that Leeper’s proposed interpretation could be impermissibly hostile to arbitration and therefore preempted by the FAA.
The inquiries from the bench indicate that the Court may be reluctant to permit a purely non-individual PAGA claim. However, Justice Liu’s line of questioning suggests that the Court may be divided over the relationship between statutory interpretation, standing, and the practical consequences of arbitration.
On balance, the Court appeared to favor Shipt’s arguments, although the outcome remains uncertain. The Court’s focus on a PAGA plaintiff having “skin in the game” suggests a possible ruling affirming the Court of Appeal’s decision. Nevertheless, Justice Liu’s questions about maximizing enforcement and avoiding unnecessary delays in recovery, together with Leeper’s argument that PAGA plaintiffs are the “master” of their complaint, leave open the possibility of a narrower decision.
There is also an important statutory wrinkle. California amended PAGA in 2024, with the amendments applying to PAGA notices filed on or after June 19, 2024. Leeper’s lawsuit predates those amendments. Consequently, the Court’s ruling will address the pre-amendment statutory framework, and the ruling may ultimately be limited to pre-amendment lawsuits. At a minimum, the Court’s reasoning will likely influence how California courts interpret the amended statute, however.
What This Means for Employers
For California employers, the practical implications are significant. The Court’s decision could inform litigation costs, settlement leverage, arbitration strategies, and the overall defense of PAGA claims. If the Court affirms, every PAGA action will necessarily include an individual PAGA claim, even if the plaintiff expressly disclaims or omits that claim from the complaint. As a result, well-drafted arbitration agreements will become a stronger tool for managing PAGA exposure.
Employers should review their arbitration agreements, now, for compliance with California law.
A decision is expected no later than February 1, 2027. For questions about how this case may affect your arbitration agreements or pending PAGA matters, contact Jade T. White at jwhite@grove.law.
[1] For example, the Court of Appeal in Leeper held that “every PAGA action necessarily includes an individual PAGA claim.” Meanwhile, in Rodriguez v. Packers Sanitation Services LTD., LLC, the Fourth Appellate District explicitly rejected the Second Appellate District’s holding in Leeper and found that “Leeper does not persuade us that . . . all PAGA actions[] include an individual PAGA claim” where no individual claim is alleged. ↩