Leeper v. Shipt, Inc., 2024 WL 5251619 (Cal. Ct. App. 2024)

Christina Leeper entered into an independent contractor agreement with Shipt, Inc. (“Shipt”), a subsidiary of Target Corporation (“Target”), as well as an arbitration agreement that required her to arbitrate any personal/individual claims. She subsequently filed a purported “representative” lawsuit against Shipt and Target, alleging a “representative” PAGA claim – i.e., exclusively seeking penalties incurred by others (but not herself) stemming from alleged violations of the statute. Leeper opposed Shipt’s motion to compel arbitration on the ground that she had not alleged any individual claims and, therefore, her PAGA claim could not be compelled to arbitration. The trial court agreed and denied the motion to compel. However, the Court of Appeal reversed, finding that “the unambiguous language in [Labor Code] section 2699, subdivision (a), [states that] any PAGA action necessarily includes both an individual PAGA claim and a representative PAGA claim” (emphasis added). Further supporting its holding, the Court looked to the statute’s legislative history, noting that the legislature deliberately chose the word “and” after rejecting a prior version of the bill that phrased the language in the disjunctive. Accordingly, the Court directed the trial court to grant Shipt’s motion to compel arbitration and to stay any representative component of the PAGA claim pending the outcome of the arbitration. See also Huff v. Interior Specialists, Inc., 2024 WL 5231468 (Cal. Ct. App. 2024) (trial court erroneously dismissed and failed to stay representative action pending outcome of arbitration).