Key Points

  • The Fifth Appellate District held that an aggrieved employee may bring a PAGA action consisting only of nonindividual claims under the version of PAGA in effect since July 1, 2024.
  • The court held that the 2024 amendment requiring a plaintiff to have personally suffered each alleged violation sets a uniform standing requirement but does not dictate which types of PAGA claims an employee must pursue.
  • The court followed its own earlier decisions in CRST and Galarsa and rejected the Second District's contrary reasoning in Leeper and Williams, all of which are under California Supreme Court review.
  • Because nonindividual PAGA claims are not subject to arbitration, the court held that Belkorp's arbitration agreement and class or collective action waiver cannot be enforced against a plaintiff pursuing only those claims.
  • The court affirmed the denial of Belkorp's motion to compel arbitration and awarded Castillo his costs on appeal.

A California appeals court held on Oct. 23 that workers may still sue employers solely on behalf of their co-workers under the state's Private Attorneys General Act, or PAGA, after the Legislature's 2024 overhaul of the law. The ruling kept a former service technician's suit against his ex-employer, Belkorp AG, out of arbitration.

A unanimous three-justice panel of the Fifth Appellate District affirmed a Stanislaus County Superior Court order denying Belkorp's motion to compel arbitration. Justice Harrell wrote the published opinion, joined by Acting Presiding Justice Meehan and Justice Guerra.

PAGA lets an employee who suffered Labor Code violations sue for civil penalties as the agent of the state Labor and Workforce Development Agency, which receives 65 percent of any recovery. The U.S. Supreme Court's 2022 decision in Viking River Cruises v. Moriana allowed arbitration agreements to split those suits. The employee's "individual" claims, based on violations the employee personally experienced, go to arbitration, while "nonindividual" claims, based on violations against other workers, stay in court. A suit pleading only nonindividual claims, sometimes called a "headless" PAGA action, leaves nothing to arbitrate.

California's appellate courts have split over whether such suits are allowed under the version of PAGA in effect before July 1, 2024. The Fifth District extended its answer to the amended statute. "Because we detect no reason to depart from CRST, we conclude that an aggrieved employee may bring a PAGA action that consists only of nonindividual PAGA claims under the post-July 1, 2024 version of PAGA," Harrell wrote.

Steven Castillo worked for Belkorp as a service technician from May 2021 until his termination in late January 2024. His onboarding documents included an arbitration agreement requiring individual arbitration and waiving class and collective actions. In February 2025, after notifying the labor agency, Castillo sued "as an exclusively representative action on behalf of other current and former aggrieved employees." The complaint stated that he sought "only to prosecute his non-individual PAGA claims and does not seek to prosecute any individual PAGA claims."

Superior Court Judge John R. Mayne denied Belkorp's motion in September 2025. He found that Belkorp had breached its duty of candor by failing to disclose that the California Supreme Court had granted review in Leeper v. Shipt, the decision on which the company relied. Mayne also faulted Belkorp for ignoring the Fifth District's contrary 2025 ruling in CRST Expedited v. Superior Court. "This decision not to cite to controlling authority and not to address it appears to this Court to be a concession on the merits," Mayne wrote.

The dispute turns on one word. PAGA authorizes a suit by an employee on behalf of the employee "and" other current or former employees. Divisions One and Five of the Second District, in Leeper and Williams v. Alacrity Solutions Group, read "and" to require both kinds of claims. The Fifth District, in CRST and Galarsa v. Dolgen California, and the Second District's Division Six, in Balderas v. Fresh Start Harvesting, have allowed nonindividual claims alone. The Supreme Court has granted review in Leeper, Williams, CRST and Galarsa.

Belkorp argued that the 2024 amendments settled the question by redefining an "aggrieved employee" as a worker who "personally suffered each of the violations alleged" within a one-year limitations period. The panel held that the new language governs who may sue, not what the suit must contain. The amendment "clarified that PAGA standing is the same no matter what type of PAGA claim an aggrieved employee may choose to pursue," Harrell wrote, and "it does not determine which types of claims (individual, nonindividual, or both) an aggrieved employee must pursue."

Harrell rejected Leeper's reliance on a drafting change that substituted "and" for "or" in the original bill, writing that "Leeper's statutory analysis has significant omissions." He also pointed to the California Supreme Court's 2023 decision in Adolph v. Uber Technologies, which twice described its holding as applying "where a plaintiff has filed a PAGA action comprised of individual and nonindividual claims." If every PAGA action necessarily contained both, Harrell reasoned, that phrasing would be redundant. "It is doubtful that our Supreme Court would make two redundant statements regarding the PAGA actions to which its holding was intended to apply," he wrote.

The panel read the Legislature's silence against Belkorp. Balderas, published in March 2024, held that an employee may bring a PAGA action without an individual claim, and lawmakers did not amend the statute to counteract it months later. That omission "presumably means that the Legislature agreed that aggrieved employees can bring only nonindividual PAGA claims," the court wrote.

The court also rejected Belkorp's contention that dropping individual claims leaves a plaintiff without a personal stake, noting that the 2024 amendments made injunctive relief available to aggrieved employees. "We think the assurance of future Labor Code compliance that an injunction provides is a significant incentive and personal stake for any aggrieved employee," Harrell wrote.

The panel held that the Federal Arbitration Act does not reach claims an employee brings as the state's proxy. "Without any claims subject to arbitration, the FAA is not implicated," Harrell wrote. "Because Castillo is pursuing a PAGA action that consists of only nonindividual PAGA claims, Belkorp's arbitration agreement and class or collective action waiver provision cannot be enforced against him."

In a footnote, the court dismissed Belkorp's suggestion at oral argument that an arbitrator should decide a headless plaintiff's standing. "Such a procedure would create barriers and delays that in no way further the purpose of PAGA," Harrell wrote. The court called "meritless" Belkorp's argument that pleading only nonindividual claims amounts to an admission that Castillo suffered no violations.

Belkorp was represented by Alden J. Parker of Fisher & Phillips. Castillo was represented by Douglas Han of Justice Law Corporation.

The affirmance, which awards Castillo his costs on appeal, returns the case to Stanislaus County Superior Court, where the PAGA claims will proceed outside arbitration. The panel said any challenge to whether Castillo's complaint adequately alleges his standing belongs in a demurrer, a motion attacking the sufficiency of a pleading, and that "we express no opinion regarding the pleading adequacy of Castillo's complaint."