In a recent decision issued on July 7, 2025, the California Court of Appeal for the Fifth Appellate District held that so-called “headless” PAGA claims, those PAGA cases brought solely on behalf of others without an active individual claim, may still proceed under current law. In CRST Expedited, Inc. v. Superior Court (June 2025), the court interpreted Labor Code section 2699(a) to allow representative-only actions. It rejected the argument that a plaintiff must maintain a viable individual claim to pursue broader penalties under the Private Attorneys General Act.
This ruling creates a significant shift for employers within the Fifth Appellate District, which includes counties like Fresno, Kern, Tulare, and Kings. Unless and until the California Supreme Court resolves the issue, CRST Expedited will be controlling in those jurisdictions. A split now exists among California appellate districts, with other courts rejecting the headless PAGA theory. The Supreme Court is reviewing multiple related cases, but until a uniform rule is issued, employers operating in affected counties should not rely on arbitration alone to manage PAGA exposure. Now is the time to reassess arbitration strategies and reinforce compliance around wage-and-hour practices to reduce risk from representative claims.
Take Away: Review your arbitration agreements and PAGA exposure now, especially if you operate in counties covered by the Fifth Appellate District. Employers should not assume existing agreements will prevent representative PAGA claims.
Contact EmployLaw Group LLP to assess your litigation risk and make targeted compliance adjustments.