If you are a California employer, there is a major unresolved issue in PAGA litigation that could significantly impact your exposure—and your ability to enforce your arbitration agreements.

It is called a “headless” PAGA claim, and right now, California courts are split on whether these claims are even allowed.

The result: uncertainty, inconsistent outcomes, and

In a July 2025 decision, the California Court of Appeal for the Fifth Appellate District ruled that so-called “headless PAGA” lawsuits are allowed—actions in which a plaintiff drops their own Labor Code claims but continues to pursue penalties on behalf of other employees under the Private Attorneys General Act (PAGA). This holding, in CRST Expedited