What’s at Stake for Workers in Leeper v. Shipt?

Meredith Dixon, Staff Attorney

California enacted its Private Attorneys General Act (PAGA) as a bulwark to protect the State’s millions of workers from increasingly powerful employers. PAGA does this by enabling workers to step into the “shoes” of the State and sue employers directly for widespread labor law violations.

Now, in Leeper v. Shipt, No. S289305, the California Supreme Court will decide whether employers can force workers to have to go through individual arbitration of PAGA claims before getting to have their day in court, effectively delaying litigation of most PAGA actions by a year and a half or more.

The Supreme Court’s decision could fundamentally alter employers' incentives to comply with labor laws, resulting in wage theft, unsafe workplaces, and other tangible consequences for millions of California workers.   

The question the California Supreme Court will decide in Leeper is whether every PAGA action necessarily includes an individual PAGA claim as well as a representative claim.  This issue is of crucial importance because almost 80% of California employment contracts include a clause mandating arbitration of individual legal claims. If the Court finds that every PAGA action necessarily includes an individual PAGA claim, this means that employers with a mandatory arbitration clause can compel arbitration of the individual claim and move to stay litigation of the representative claim until the arbitration is complete.   

The California Supreme Court granted review sua sponte after the Court of Appeal held that every PAGA action necessarily includes both an individual and representative component, even if the worker explicitly pleads only the representative claim. 

On January 7, 2026, Impact Fund, joined by National Employment Law Project, Asian Law Caucus, Bet Tzedek, Centro Legal de la Raza, Legal Aid at Work, Wage Justice Center, Western Center on Law and Poverty, and Worksafe, filed an amicus brief in support of Plaintiff-Appellant Christina Leeper.

Impact Fund’s brief emphasizes that the Legislature enacted PAGA as a response to pervasive labor code violations and chronic underenforcement of labor laws. At the time of enactment, abuses such as wage theft and violation of workplace safety rules were rampant, and the State lacked capacity to prosecute enforcement at the needed scale. PAGA was intended to increase the number of enforcement actions and to generate financial penalties substantial enough to deter these often-profitable violations. The statute does this by permitting a worker to bring claims on behalf of the State not just for the violation they personally suffered, but also for the violations their coworkers suffered, creating higher stakes for employers who violate workers’ rights.  

Amici argue that the appellate court’s ruling undermines the clear intent of the Legislature to create a labor enforcement scheme with real teeth. Under the appellate court’s ruling, employers can require workers to sign arbitration agreements and force any would-be PAGA plaintiff into an individual arbitration, delaying and deterring a possible representative PAGA action.  

For workers, the time and cost required for the individual arbitration often far exceeds the value of the individual PAGA claim, making them potentially unworkable for contingency fee attorneys.  Indeed, an individual private PAGA arbitration generally takes at least a year and a half, and, under the appellate court’s decision, this required first arbitration also potentially jeopardizes any eventual representative PAGA claim.  

The Supreme Court’s decision will have serious consequences for labor law enforcement strategies, employer behavior, and the real-world effectiveness of PAGA. Impact Fund is grateful to join with amici in urging the Supreme Court to reverse the appellate court’s decision and allow PAGA to remain a meaningful tool for California workers to enforce their rights.