While we are waiting for the CA Supreme Court in Leeper v. Shipt to address whether “headless” PAGA claims (i.e., where PAGA representative plaintiffs disavow the “individual” portion of a PAGA claim) are a permissible end run around mandatory arbitration - see our prior blog post - the Fifth Appellate District has weighed in concluding that headless PAGA cases are permissible. See CRST Expedited Inc. v. Superior Court of Fresno County.
The court’s decision in CRST Expedited focused on one subsection of PAGA which states:
- “…any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency … for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3. Former Lab. Code, § 2699(a) (eff. 6/27/2016 to 6/30/2024) (emphasis added)
In plain English, this provision provides that enforcement of the Labor Code for civil penalties can either be done by (1) the LWDA (the state agency charged with enforcement) or (2) an employee who experienced a Labor Code violation through a civil lawsuit on behalf of the employee “and other current or former employees”.
Under the general and common usage of “and,” this means that any PAGA lawsuit must seek penalties on behalf of the PAGA plaintiff as well as other employees. In other words, no headless PAGA cases should be permissible. California courts have previously held that PAGA claims may not be brought solely on behalf the employee-plaintiff, but must include other employees.
Nevertheless, the court’s decision in CRST Expedited includes 18 pages of discussion to support its conclusion that because the word “may” is permissive, the word “and” is ambiguous and should be read as “and/or” in order to further the purpose of PAGA (i.e., the enforcement of the Labor Code). In its attempt to justify rewriting the statute, the court ignores the fact when the legislature made changes to section 2699(a) in the July 2024 PAGA amendments it did not change “and other current or former employees” to “and/or other current or former employees.” If the legislature wanted to allow headless PAGA claims it could have done so. But it did not.
Key Limitations of CRST Expedited
- This decision is only binding precedent for cases in the 5th Appellate District which covers the following counties in the Central Valley (Stanislaus, Tuolumne, Merced, Mariposa, Madera, Fresno, Kings, Tulare, and Kern).
- This decision expressly only applies to the pre-July 2024 amendment version of PAGA.
- The split in authority between the 2nd Appellate District’s decisions in Leeper v. Shipt and Williams v. Alacrity Solutions Group and the 5th Appellate District in CRST Expedited will be resolved by the CA Supreme Court in its review of Leeper and Williams (which is on review pending the resolution of Leeper).
Stay tuned and subscribe to our blog – if you haven’t already – for more on the evolving PAGA landscape. Navigating PAGA litigation is complicated, but experienced CDF attorneys are ready to provide you with the most effective strategies.
