Court of Appeal holds PAGA actions necessarily include individual claims subject to arbitration: Leeper v. Shipt, Inc.

In Leeper v. Shipt, Inc.,           Cal.App.5th           (Dec. 31, 2024), the Court of Appeal (Second Appellate District, Division One) held that PAGA actions necessarily include individual claims, which may be subject to arbitration.

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Plaintiff, a gig worker classified as an independent contractor, brought a collective PAGA action alleging misclassification. Defendant moved to compel arbitration of the individual portion of the action. The trial court denied the motion, finding no individual cause of action, and Defendant appealed.

On appeal, the Court of Appeal reversed the trial court’s order denying the motion to compel arbitration. Focusing on the statutory language of Lab. Code § 2699 (a), the Court of Appeal held that PAGA actions inherently include both individual and representative claims. It distinguished this case from Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, and Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, finding that they did not address whether a PAGA action can be brought without including an individual PAGA claim. The Court of Appeal ordered the trial court to compel arbitration of the individual claim and stay the representative PAGA claim.

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